INITIAL COIN OFFERING (ICO)
Initial Coin Offering is sometimes also called a token sale and this is the practice of crowdfunding in blockchain projects. Initial Coin Offering (ICO) is a cryptocurrency it’s just equivalent to the Initial Public Offering (IPO). This is the type of capital-raising activity in the cryptocurrency and the environment of blockchain.ICO is also called token sale or token launch. An ICO creates a new coin, app, and services this is the way to create funds.
Types of Coin Offering:
2.IEO-Initial Exchange Offering
3.IDO-Initial Dex Offering
4.STO-Security Token Offering
ICO PROCESSING AND WORKING:
In 2017 and 2018 there was a massive hype around them and however fast forward to 2021 likely to find heavily governed ICO’s, this is due to the lack of trust from investors.
In 2017 I like to compare an ICO with a start-up company using cryptocurrency as an ecosystem. Instead of finding funds from a bank, the companies are relying on investors to pump money into their ecosystem.
Cryptocurrency may one day go up in value and it delivers an ROI (Return On Investment) ICO are also very easy things to create that takes three things they are,
You could be easily investing in any company that is also mentioned in IEO’s, IDO’s and ESTIO’s.
Here the ICO is also known as IPO is used to describe the launch of a new company on a stock exchange here the purpose is to sell stock in the company.
On the other hand, ICO’s sell coins also known as tokens. The general idea if you believe the projects will succeed you can buy the tokens and you will be able to sell them later on for a profit.
When a cryptocurrency company wants to launch new projects through an ICO it creates a whitepaper, Here whitepaper is a document that states that what is the project about, what was the projects needed, how much money that they needed for the project, and how long the ICO project will run.
The public invests the money in the ICO project and receiving the project into tokens or coins in return. In 2014, one ether token also known as ETH sold around 40 us cents.
One hundred dollars worth of the ETH back then would have the equivalent of 75000 dollars in 2017 here the ICO is conducted over the ethereum platform.