An ICO (Initial Coin Offering by its acronym) is an initial offer made to finance cryptocurrency projects. It consists of a type of financing that is usually carried out through crowdfunding or collective financing. Currently, private ICOs are becoming increasingly common, so it is common to hear this term in the cryptocurrency environment.
In an ICO, digital currencies are sold through Tokens to investors in exchange for traditional money or also for other cryptocurrencies, such as Ethereum or Bitcoin itself. These tokens, in turn, are sold as future units of the currency when the ICO reaches its goal, and finally the project is launched. Next, we will know some of its most outstanding features.
A big difference between ICO and an IPO (Initial Public Offering by its acronym), is the little regulation of this one in the world, reason why the protection to the investor is almost null or nonexistent. For its part, the regulation of the IPO, obliges the promoter of the IPO, to disclose initially and then periodically, a set of important business information, about its commercial operations, its financial situation, risk factors and management and also the operational results.
It is a simple tool to use for investors, so they can directly agree with the platform without the need for brokers or stockbrokers as intermediary agents, at any time, during the implementation of the ICO until the cryptocurrency is launched which is intended to be financed and that is when they will be able to see the benefits of having invested in that initial offer.
Since the Internet is the means of access for mass sales, anyone and from anywhere in the world can invest without more limitations than those established by the ICO itself. In the previous article entitled What are Cryptocurrency ICOs? We speak more deeply about the issue of the globality of ICOs and the ease of participating in them regardless of where in the world the investor is.
They provide solutions
An ICO project that does not aim to find a solution to a problem in real life, simply will not be useful, will not give good results and will not be successful, because of this it is recommended to investigate what is the “real” objective of the project and if It is properly supported (it has a team of professionals that support it, develop a specific technology and focus on finding solutions to real problems). This does not mean that an ICO is designed to finance any startup, but is intended to support projects that innovate and benefit society, an example are cryptocurrencies, specifically the case of Ethereum that managed to raise approximately 18 million dollars for the Start of your operations.
Investors have no limits at the time of purchasing the offered Tokens, they are only limited by the conditions imposed by the ICO owners. There are cases in which large investors, for example, can buy in a pre – ICO, which ensures better discounts and promotions for the real initial offer (which is where the investment process for the cryptocurrency launch will really begin) .
What do you think about this topic? Did you already know these characteristics of ICOs?
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