The Initial coin is same as IPO (initial public offerings). In IPO the companies raise shared by offering the public to buy them similarly ICO (initial public offering) offers the crypto coin to the users. These coins are token which is given in return of investment. In simple terms, ICO is the process where new coins or token is given to the investors in exchange of cryptocurrencies like bitcoins or Ethereum. ICO is the exchange of pre-created tokens or coins that can be bought and sold very easily when there is any requirement.
It is the very famous way to increase the funds for the projects which are related to Blockchain. It is crowd sale where the investors purchase the cryptocurrencies token in advance. In 2016, the Ethereum raised $18 million in ICO and touched the market cap of $1 billion.
History of ICO:
The first cryptocurrency which was offered by ICO was Ripple. Ripple has created the approx. 100 XRP token which is called payment system in 2013. The company exchanged these tokens to fund the development of the Ripple platform. Mastercoin also exchanged bitcoins to make effective smart contracts and tokenize the transactions. This developer sold mastercoin token against Bitcoin and get $1 mio.
There are other currencies also who have funded in cryptocurrencies like Lisk. Lisk has sold $5 mio in 2016. Ethereum holds the ICO crowdsale by offering more and more coins via ICO. In 2014 the Ethereum has sold the ETH against 0.0005 Bitcoin each. Through this, the Ethereum has earned $20 mio that has to be considered as one of the biggest crowd funding.
How ICO works?
The initial coin offering generally broadcasted on cryptocurrencies forums like Bitcointalk. Here the project team shows their plan with a whitepaper and other documentation, timelines, goals, and other data which is very helpful to the investors to cognize and assess the project. The process of the ICO happen before the finishing of the project and it should be transparent so that all the details would be clearly mentioned. This is very important to gain faith and gratitude. When the ICO is launched the cryptocurrencies token or coins would become available for sale and add value to the project of the investors. Bitcoin is the most desired cryptocurrency in ICO.
The offering will be available for few weeks to let the project to raise more and more funds or money. Placing a total cap on the total amount is the best practice to raise the money swiftly. When the offering period of ICO is completed and the project is considered as completely launched. After this, the ICO token became listed in cryptocurrency exchange and became available to trade against other cryptocurrencies. The price will automatically reflect in the cryptocurrency exchange market.
How to become the part of ICO?
The first necessary thing that you require to possess the ICO event ownership is having cryptocurrencies. Register yourself in any of the digital or cryptocurrency exchange markets. Then add the fiat currency in your accounts like USD, yen, or Euro and purchase the cryptocurrency such as Bitcoin, Ethereum, dash, etc. with this money. This is the way to own a cryptocurrency in your wallet or you can choose cryptocurrency hardware to store the coins.
If you want to go for an ICO then read the agreement carefully. The agreement includes the details of the target price, timeline, and other rules which are necessary to place an ICO. All the companies prefer the exclusive wallet for the transactions so download the specific wallet soon. It is very important to provide the wallet address on ICO webpage because people can send here contribution too.
Investors are stimulated to give any sum they are comfortable with on condition that it matches with the price per project token. Then the project team will transfer the purchased amount in investor’s wallet. The tokens or coins can be warehoused on any storage like web, mobile, or hardware cryptocurrency wallet. ICO watch list shows a list of ICOs and enables the investors to find out more about the project. Like ICO watch list there are several other platforms where the listing of ICO has taken place.
Benefits of investing in ICOs:
There are many advantages to invest in ICOs. Some are as follows:
• ICOs gives you a chance to invest in a very new currency. The in-depth analysis of ICO let the investors to gain more profit.
• Many ICOs price their tokens or coin discreetly, permitting even small investors to contribute in the sale. It is similar as IPOs where investors have a chance to invest small amount and get high return in future.
• ICOs is focusing on supply-demand norm, permitting their cryptocoins to increase rate in the future.
• This is the advanced and latest cryptocurrency environment which let the investors to use crypto-tokens to buy the services offered by the company.
How to transact the ICO?
The most famous option to trade the ICOs is by using the cryptocurrency exchange. There are certain rules and regulation to transact from these platforms. Be careful and study of their withdrawal limits, transaction and conversion fees, history and reputation of the platform or exchange. If it has numerous security breaches then find out how the exchange deal with them. Always choose the best alternate. Here is the list of some popular exchange names listed below:
ICOs are good for trading the cryptocurrency. It is same as the IPO. IPO is the initial public offering which is presented by the company who is new or offers the securities first time to the investors. ICO offers the cryptocurrency which can be bought by using fiat money. The wallet is very important to store the tokens online. There are many types of wallets available in the cryptocurrency world like webpage, and hardware designed to store the coins or tokens. You can invest with small to a large amount as per your preference but the amount should not be less than the token price.