Find out what Initial Coin Offering is and how it works
Have you ever heard of the acronym “ICO,” but you are still unfamiliar with its true meaning? If that’s the case, we are at your service to discover you all there is to know about it and how it works.
ICO is an initial coin offering that refers to the cryptocurrency industry’s equivalent of the IPO, the initial public offering. It means that a particular company is eager to raise money to make a new app, coin, or service that launches the initial coin offering as a way of raising funds.
Numerous investors interested in this kind of business are allowed to buy into the offering and get a new cryptocurrency token that the company will issue. What is interesting is that this particular token can have utility in using the service or a product of a company. Also, it can just represent a specific stake in the project or a firm.
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What is an ICO calendar, and why is it so important?
An ICO calendar provides investors with a pretty clear picture of the tokens that are for sale. Investors gather information from these calendars like the name of the token, the time of opening and closing the deal.
This type of calendar can also provide descriptions of tokens in general. Thanks to ICO calendars, all investors can make plans and make the right decisions in advance.
How exactly does ICO work in reality?
In order to understand how ICO works, it’s essential to understand the basics of an ICO campaign. For example, one crypto startup is eager to raise money through an initial coin offering. Therefore, this startup needs to create a whitepaper with the following:
- Information about the project
- the amount of money is needed
- virtual tokens that founders will keep
- The type of money which will be accepted
- The exact period of how long will the ICO campaign run for
What is important to know during the ICO campaign?
During the initial coin offering campaign, all the supporters and enthusiasts of that project can buy some of its tokens with digital currency. Keep in mind that these coins are similar to shares of a company sold to investors during the initial public offering (IPO).
If the amount of money raised isn’t able to meet the firm’s requirements of minimum funds, it can be returned to the backers. Speaking of that, the initial coin offering would definitely be deemed unsuccessful.
On the other hand, if the funding requirements are met within the agreed period, the raised money will be used to pursue the project goals.
As a conclusion to this brief explanation of the initial coin offering, it’s important to remember the following key points:
- ICO – initial coin offerings are mainly being used as a fundraising method of numerous startups worldwide. They are usually related to blockchain technology and cryptocurrency.
- They are very similar to stocks. However, they may have the utility for an offered product or a software service.
- To get into an initial coin offering, you have to buy a digital currency in the first place and know how to use exchanges and cryptocurrency wallets.
- Be aware of the fraudulent and unregulated ICO’s since the internet is filled with them.