What is an ICO and how does it work?

ICO has proven to be a revolutionary way for many companies and projects to raise money. ICO can be said to be a mixture of conventional methods and advanced techniques. The main thing to keep in mind is that investors who invest in ICOs will be 100% risk free due to the technology used.

So far, most ICO funds have been raised through bitcoin (BTC) or ether (ETH). During the ICO, the project creates a Bitcoin or Ethereum address to receive funds and then displays it on the appropriate web page. The procedure is the same as opening a bank account and then demonstrating it on a specific web page to people so they can send money.

Initial coin placement (ICO) is largely an illegal way to raise crowdfunding through various cryptocurrencies (in some cases fiat currencies) and operates by cryptocurrency organizations to raise the capital needed to carry out the project. In the ICO, a certain portion of a recently issued cryptocurrency is sold to investors in exchange for any legalized tender or any other cryptocurrency. This can be said as selling tokens or crowd selling, which involves receiving the amount of investment from investors and providing them with some features related to the project to be launched.

IPO, i.e. the initial public offering of shares is a process, one way or another related to the ICO, in which investors receive shares in the company. During the ICO, investors acquire company coins, which can increase in value as the business expands.

The first token sale, i.e. ICO, was conducted by Mastercoin in July 2013. Ethereum raised money through the ICO in 2014. The ICO has adopted a whole new definition in recent years. In May 2017, there were approx. 20 offers as well as the recent ICO browser Brave brought in about $ 35 million in just 30 seconds. By the end of August 2017, since January 2017, there have been 89 sales of ICO coins worth $ 1.1 billion.

Investors send Bitcoin, Ethereum or any other cryptocurrency to a given address and then in exchange they receive new tokens that can bring them great benefits if the project gets hit.

  • ICO is mainly conducted for cryptocurrency projects that rely on decentralized technology. Therefore, naturally, such projects will force only those investors who are very interested in the concept of cryptocurrency and are friendly to the technology used.
  • The document owned by the investor does remain in the form of a web page, white paper or web post. Some of these documents show accurate information about the project, or literally falsify some of its other features to mislead those interested. Therefore, before relying on any white document or electronic document, it is best to pass a quality check.