What is an ICO?
An ICO is a recently emerged concept of crowdfunding projects in the cryptocurrency and Blockchain industries.ICO stands for Initial Coin Offering. It’s an event, sometimes referred to as ‘crowdsale’, when a company releases its own cryptocurrency with a purpose of funding. It usually releases a certain number of crypto-tokens and then sells those tokens to its intended audience, most commonly in exchange for Bitcoins, but it can be fiat money as well.
As a result, the company gets the capital to fund the product development and the audience members get their crypto tokens’ shares. Plus, they have complete ownership of these shares.
2. Have there been many successful ICO’s?
Yes, there are plenty of examples.The first project to ever launch an ICO was Mastercoin. It managed to secure $5 mln worth of Bitcoins in 2013 selling their own tokens. Many other companies followed the example, like Ethereum in 2014, or Waves in 2016, raising over $18 mln and $16 mln correspondingly.ICO is a proven and efficient way of kickstarting crypto projects, provided that the product is in demand and there’s a solid team working on it.
3. How is ICO different from IPO?
There are indeed some parallels between the concepts of Initial Public Offering and ICO. However, there are several key differences.For one, a company’s shares, released during an IPO, always denote a share of ownership in the respective company. This is not, by default, a case with crypto-tokens that are sold to the public in an ICO.
Crypto-tokens can be used to transfer voting powers - a larger share of tokens giving more voting power - in some projects, but more often those tokens are just that - units of currency that you can send to other users and exchange for other currencies.
The other crucial difference is that IPO’s are heavily regulated by the government. This requires a partaking company to prepare large amounts of paperwork before releasing its shares. It also implies severe consequences in the case of non-compliance. Conversely, cryptocurrency crowdfunding is a new scene, largely untouched by government regulation.
That means that any project can launch an ICO at any time with little preparation and any person can take part in it and contribute their money, no matter what country they are from. This liberal environment carries both new opportunities and risks when compared to the more conservative IPO’s... continue reading: https://cointelegraph.com/explained/ico-explained
An ICO is a recently emerged concept of crowdfunding projects in the cryptocurrency and Blockchain industries.ICO stands for Initial Coin Offering. It’s an event, sometimes referred to as ‘crowdsale’, when a company releases its own cryptocurrency with a purpose of funding. It usually releases a certain number of crypto-tokens and then sells those tokens to its intended audience, most commonly in exchange for Bitcoins, but it can be fiat money as well.
As a result, the company gets the capital to fund the product development and the audience members get their crypto tokens’ shares. Plus, they have complete ownership of these shares.
2. Have there been many successful ICO’s?
Yes, there are plenty of examples.The first project to ever launch an ICO was Mastercoin. It managed to secure $5 mln worth of Bitcoins in 2013 selling their own tokens. Many other companies followed the example, like Ethereum in 2014, or Waves in 2016, raising over $18 mln and $16 mln correspondingly.ICO is a proven and efficient way of kickstarting crypto projects, provided that the product is in demand and there’s a solid team working on it.
3. How is ICO different from IPO?
There are indeed some parallels between the concepts of Initial Public Offering and ICO. However, there are several key differences.For one, a company’s shares, released during an IPO, always denote a share of ownership in the respective company. This is not, by default, a case with crypto-tokens that are sold to the public in an ICO.
Crypto-tokens can be used to transfer voting powers - a larger share of tokens giving more voting power - in some projects, but more often those tokens are just that - units of currency that you can send to other users and exchange for other currencies.
The other crucial difference is that IPO’s are heavily regulated by the government. This requires a partaking company to prepare large amounts of paperwork before releasing its shares. It also implies severe consequences in the case of non-compliance. Conversely, cryptocurrency crowdfunding is a new scene, largely untouched by government regulation.
That means that any project can launch an ICO at any time with little preparation and any person can take part in it and contribute their money, no matter what country they are from. This liberal environment carries both new opportunities and risks when compared to the more conservative IPO’s... continue reading: https://cointelegraph.com/explained/ico-explained
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