What is an ICO and how does it work?

ICO has proven to be a revolutionary way to raise money for many companies and projects. It can be said that ICO is a mixture of conventional methods and advanced techniques. The main thing to keep in mind here is that investors who invest in ICOs will be 100% risk-free due to the technology used.
So far, most ICO funds have been raised through Bitcoins (BTC) or Ether (ETH). While the ICO is underway, the project creates a Bitcoin or Ethereum address to receive the funds and then displays it on the appropriate website. The procedure is like opening a bank account and then showing it to people on a particular website to send them money.
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Initial coin offering (ICO) is basically an illegal way to raise crowdfunding through various cryptocurrencies (in some cases fiat currency) and crypto-currency organizations operate to raise the funds needed to run the project. In an ICO, a certain portion of the newly issued cryptocurrency is sold to investors in exchange for any legalized bidding or any other cryptocurrency. It can be said as a token sale or crowd sale, it involves taking a number of investments from investors and offering certain features related to the project to be launched.
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IPO, which is an Initial Public Offering, is a process related to the ICO, where investors receive shares owned by the company. While in the ICO, investors buy the company’s coins, which can increase value if the business grows.
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The first token sale, which is an ICO, was made by Mastercoin in July 2013. Ethereum raised money through an ICO in 2014. The ICO has taken on a whole new definition in recent years. In May 2017, approximately. 20 bids, and Brave’s latest ICO web browser generated about $ 35 million in 30 seconds. As of the end of August 2017, a total of $ 89 billion in ICO coins had been sold since January 2017.
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Investors send Bitcoin, Ethereum or any other cryptocurrency to the given address and then in return get new tokens that can be of great benefit if the project is successful.

  • The ICO is essentially made for cryptocurrency-based projects based on a decentralized technique. So, naturally, such projects would only force investors who are very interested in the concept of cryptocurrency and respect the technology used.
  • An investor’s document remains in the form of a website, white paper, or web publication. Some of these documents show specific details of the project, while others deceive stakeholders who are literally falsifying its features. So before relying on any white paper or electronic documents, it is best to do a quality check.