What’s the Definition of ICO?
First Coin Offering (ICO) is a crowdfunding method utilized by new cryptocurrency businesses to increase capitals. Back in ICO, some percentages of those newly issued cryptocurrencies are offered to folks who are interested in supporting the project. They are sold to swap for other established cryptocurrencies such as Bitcoin, Fiat and Ether.
It’s similar to the principle of people making a profit when the share they bought in the stock market rises in value. ICO is different than purchasing shares at a stock exchange because you don’t receive a share of the ownership right when you purchase the new tokens.
Short Background on ICOs
In the beginning stage, ICO was conducted by companies such as Mastercoin, Ethereum and Karmacoin. Ethereum Tokens conducted among the biggest ICO in 2014 by increasing a total of $18 millions in the first phase of 2014. They break the record by increasing 3,700 Bitcoins which is equivalent to $2.3 million dollars within the first 12 hours of the campaign. Kik conducted the initial mainstream ICO in September 2017 but the job was interrupted by a phishing scam via the circulation of a false URL from the social media. Ripple sold $1 billion value of XRP tokens to investors in exchange for bitcoins and fiats in 2013.
Now, ICO earnings have become increasingly popular with approximately 50 token earnings being conducted each month. Starting from 2017, ICO has been growing at a fast pace with $2 billion worth of token sales successfully ran. This demonstrates it isn’t going to become a temporary method used by new cryptocurrency business to raise funds but it is here to stay for extended term.
These days, ICO token sale is so popular at least a few ICO starts every day. It’s been predicted that over $4 billion value of token sales will be conducted this year. Genesis Vision, a Russian based firm, conducted an ICO effort that runs from the 15th October 2017 into the 15th November 2017. They figure out how to raise a total amount of $2.3 million in the token presale.
How Does ICOs Fundraising Work?
A cryptocurrency firm that wants to increase capitals via ICO must provide a couple of details including project description, project purpose, amount need to be increased, percentage of tokens the corporation will maintain, types of virtual currencies approved, and the period of the ICO campaign. Backers that are interested can email the seller and ask for more details of the project before doing a transaction. If they raise the sum for your campaign, they will carry out the scheme to finish the project. If not, they’ll return the money back to the backers.
How Scammers Use ICO to Take Out Fraud?
ICO can be performed to help raise capital for various types of companies and charity business. Additionally, it has been utilized as a tool by individuals to run frauds. Scammers would utilize means to grow the ICO value temporarily and abandon the job afterwards to earn a fast profit. Scams happen cause of the lack of regulation from the authorities. The same as any investment, there is a danger when coming to invest in the first coin supplying.
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What’s the Definition of ICO?
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