I first knew about ico when I was given an article to write by a client on a freelance website, though I never had anything form of experience about icos, I decide to give it a shot; I jumped on the search engine and that was how I started expanding my knowledge onicos.
ICO is an acronym which means initial coin offering.
Ico is a way to raise funds by for a new project (or cryptocurrency venture) just like crowdfunding, this project is always a new one, icos are not regulated by any particular body, that’s why new ico springs up every day.
Ico is used by startups to escape the tough and regulated means to raise capital through capitalist ventures or banks. In an ico campaign, a given percentage is offered for sale to early backers of the project in exchange for a higher valued cryptocurrency, especially bitcoin.
When an initial coin offering is about to begin, the firm put up some important things such as the white paper and a website.
The white paper gives a full insight into how the ico will be run, the white paper is the most important document in icos , it states details of the ico project
· How much capital is needed for the project?
· The problem the ico will be solving
· The amount of token or coins to be sold out
· The kind of cryptocurrency that will be accepted from backer
· The duration of the ico
During the ico those in support of the project are allowed to by some coins with other cryptocurrencies like bitcoin. This is similar to Ipo (initial public offering) where companies sell shares to investors.
The money raised from the ico is used to complete the project but if the ico fails in some cases the money is returned to the ico backers.
Participants of ico normally believe in the progress of the ico so they acquire the crypto coins at a very reduced rate hoping that the coin will be listed on coin exchange market where they can trade with it, some can decide to keep their coin for a long time before deciding to sell it off for higher profit.
People can easily become millionaires with ico, and those with little capitals can be allowed to invest as ico do not restrict investors, it gives everybody the chance to invest and rip its benefit but to also endure its consequences in case the ico fails.