An initial coin offering or ICO is essentially a new type of Crowdfunding. ICOs are used to raise funds for a new cryptocurrency project, to become a decentralized form of Crowdfunding in the future. This process usually starts by creating an idea for a cryptocurrency and how it will work before developing a white paper that outlines the details. The press release is then introduced on trading websites, Bitcoin Magazine, and other mainstream media that help promote awareness to potential investors.
The core concept behind ICOs is to raise a certain amount of money in exchange for the new cryptocurrency issued by the company. In other words, it is a new way to create a decentralized form of Crowdfunding, which has been made famous in recent years. The value of each initial coin offering is generally not very high, and investors only buy into the project on speculation and long term potential rather than short term gains. However, the initial coin offering market has grown dramatically since it was first introduced in 2013 with Mastercoin, which raised $600,000 in Bitcoin during its first ICO.
What is ICO Crowdfunding?
Crowdfunding is when companies create and sell stock shares to investors in exchange for funding. The term Crowdfunding was first introduced in 2006 by the industry website Kickstarter, which allowed people to invest in various projects using an investment model previously only used by the wealthy. This has changed the way startups are funded and helped more people access investment opportunities they would not usually have access to. With the arrival of Blockchain in this context, it has a new horizon for Crowdfunding and ICOs.
The ICO Crowdfunding is a new way to Crowdfunding without the need for a company to create a new ICO. Instead, companies can become a part of the ICO platform and run an ICO through the website. This enables investors to purchase the tokens and as a way to promote awareness of the project and gain early access to tokens. The website itself is owned by the company running its own ICO, and it would then promote it on various websites and platforms.
ICO Crowdfunding Vs Investing in CryptoCurrency
Investing in cryptocurrency is entirely different to investing in tokens. When you invest in the tokens, you will be buying into the currency or utility of that coin, either to use it as a means of payment or store of value. When you invest in an ICO, however, you are buying into the brand and future success of that company and their new projects as well. Of course, this is a very high-level comparison, but it shows how different these two methods are for obtaining funding for your project. If you’re thinking of getting involved in ICOs or other cryptocurrency projects, we recommend checking out our review of the best Bitcoin exchanges.
Why Should You Invest In ICOs?
It would help if you considered investing in an ICO for several reasons, one being that it could be an excellent way to get involved and get exposure to the new blockchain technology before you invest. In addition, many excellent websites can give you more information on the company behind the token sale and what they achieve with their project. The other huge benefit of investing in an ICO is that it gives you early access to the tokens before they hit exchange platforms.
ICO Crowdfunding – Is It Legitimate?
In both investing in cryptocurrency or an ICO, there is still a lot of uncertainty surrounding both methods. Investing in cryptocurrencies often leads to massive gains and losses and substantial price fluctuations. With ICOs, however, it is often more secure not just because of the crowdfunding model but also because they are a lot more transparent than an Initial Public Offering (IPO). To find more about investing in ICOs, you should know how to earn money with Bitcoin
When investing in an ICO, investors often base their decisions on statistics such as their size and how successful they produce the tokens. The ICO may also take place on the Ethereum network, which has already seen its fair share of scams, but the project may be legitimate.