What Is ICO (Initial Coin Offering)? How It’s Works – 2020 | Complete Details
Friends What we will talk today is ICO? What is the full form of ICO (Initial Coin Offering) and how does it work for Crypto Currency Coins?
In the first step, through the company, offering a coin as a token to the people in the first step and raising the money so that the company can grow further and earn money from ICO.
Today its trend is also very much in India. What are your many questions related to ICO like what it is Initial Coin Offering? How Initial Coin Offering Works? How to earn money from this ?How did it come in the trend etc. For this information, please read this post.
1. What is ICO? (Full form of ICO)
ICO’s full form is “Initial Coin Offering”. As it is known only by its name before offering coin offer.
Crypto brings money through launch, startup company or firm ICO, this money is invested by the common people.
Companies take out some token markets before launching the crypto coin, these are the token coins. The company’s company keeps its plans in its whitepaper.
People buy these coins at the time of ICO, so that the company gets fund for growth. Here people are free to sell their coin anytime or they can hold them well and sell them at a good price. They can also exchange them in bitcoin, ethereum etc. in cryptocurrency.
These token are free for use anyhow.
2. How the Trend of ICO runs (History):
After all, the question of how the trend of ICO will come in your mind. Talking about its history, the Master coin sold in july 2013 first token.
After that, in 2014, selling Ethereum token collected about 3,700 BTC in 12 hours, which was worth 2.3 million dollars. From here the trend of ICO started.
When people began to take interest in bitcoin, its prices started to rise. Where its rate was $ 1 in 2011, the book reached $ 13,000 till the last of 2017.
Seeing enthusiasm for bitcoin in the logo, many companies are launching the crypto coin in the market through ICO. That’s what started the trend of ICO.
3. How does ICO work?
When a company, startup or a firm brings its crypto currency coin market, then they need an initial fund. Companies collect this fund through public from ICO. Here people buy money from the tokens and give firm money, so that the firm works further.
Prior to mobilizing this fund, companies write their own plan on a whitepaper, it says that how many funds are needed by the company. How Many Tokens Are Selling First. How long does the ICO offer run? And if there is no fund raising in a given time then what to do etc.
What is their purpose behind all this? It is all written. This is a very important part of the whitepaper company. There are also all legal documents along with the whole plan.
Before putting money in any crypto coin ICO, it is important to read the company’s whitepaper properly. When the coin is launched in ICO, they are offered very little price. Meaning you buy them in very little money.
There are no equity in most cases of ICO, which is very much interested in the people because they get very little money. But when the company gradually grows, then the price of this coin and demand in the market increases and it gets on the exchange.
In this way, investors get more profits, so people take so much interest in ICO.
4. Why is Initial Coin Offering Used?
The ICO is a way of crowdfunding but today the online market is changing rapidly. Now grow on all the business online internet platform. Along with this, online innovations are also being seen.
Check out based crypto coin on blockchain technology today. It has changed the online world.
ICO is used because it is the best option for collecting funds from the launch of crypto coin. This is very helpful in showing the way to advance in the initial step.
Some reasons for using ICO –
1. Its trend online is growing very fast, especially in the coin market. By looking at the more profit you get into it, everybody wants to invest in them by joining the crypto coin. So these coin companies easily get the fund.
2. Talk about the share market, then the first company has to be listed here. But for this the firm must have more in the legal value market and it is not possible in crypto market right now.
3. With loans, these companies can cause huge losses. First, they will be given the interest of the bank and after the second coin launch, the company did not grow or the people did not show interest in it, then the company could be completely damaged.
4. One of the biggest reasons for using ICO is that the company clears in the white paper at the time of ICO. If you buy a coin, you will be responsible for the benefits or losses incurred due to the rise or fall of a company’s coin. .
By giving this rule, this company escapes damage. Just because of the trend of coin trend, these companies raise good money through ICO.
5. Types of Initial Coin Offering:
1. Time: This ICO has a fixed period of time, which means it is run till a fixed time. This period is not changed. In this time, how many can get into the coin market and how much fund is collected. They just work in their time frame.
2. Coin (Token): The main purpose of this type of ICO is to sell coins (token) to a fixed number in the market. Their main focus is to sell the coin more and more. They want to reach more people by not focusing more on the time frame and fund.
3. Fund: These ICOs have to raise the focus fund. They start the fixation of the token in the market and start loading in the market. When these tokens are sold in excess quantity then their prices are increased, which helps in generating more funds.
6. Profit And Loss
Friends, there is some good and bad pairing with everything. The same thing happens in this case so let’s see –
In the Crypto currency coin market, the trend of ICO is going very fast. At present, many companies are crowdfunding people through ICO due to not getting the investor to launch their own coin.
This way, when the price of coin coincides with coin value, people benefit. Therefore, these companies easily get money through ICO. It is becoming so popular among the people even in the absence of liquidity in the ICO token.
There are some disadvantages of ICO when a token is launched and you buy it, but if it does not get popular then in this situation it does not reach much of the people and its rate increases. You may also be at a loss at this time. Some of the reasons for the loss can also be –
– 90% of the ICO does not get much success.
– Due to the trend of ICO, fraud is also going on here, which escapes your money.
7. Invest in Initial Coin Offering or Not?
Investing in ICO can give you both profit and loss. Before investing, read the information about that ICO and its whitepaper as well as the legal document so that you understand the purpose behind launching their coin.
Keep these meditations carefully before investing in them –
Firstly, you must check the whitepaper and legal document of the company related to that ICO. So that you will know their purpose.
You can search all the way on google and type ‘ICO company name – scam or legit or fraud’ legal, which will give you all the information.
Never invest a lot of money in the same company’s ICO token. Even though she is trustworthy and getting a positive news in her market as price is high today, tomorrow may be even less.
If you have token, then buy a different ICO token by doing market research so that some of these coins do not give good results, then the remaining coins can be useful to you.
Apply as much money as you can afford as the market daily keeps going up and down.
You can learn about them online with the help of some websites –
8. Difference between ICO and IPO?
If seen, business is forwarded through crowdfunding in both ICO and IPO. But there are some differences with similarities, so let’s know them one by one –
- Full form of ICO (Initial Coin Offering).
- It is used in special crypto coin market.
- Here is invested by the people.
- Profit and loss are entitled only.
- On investment here, the token is given as a coin.
- It is trading on online exchange.
- Investing here is the choice of people.
- Funding is done through crowdfunding.
- It is not completely legal.
- ICO does not give you any part of the company.
- Can not interfere in the affairs of the company, only the right to use token.
- These companies are completely new startup.
- They do not have any product but only have a whitepaper in which the entire plan is written.
- In the ICO market, it is done before the product is brought.
- Full form of IPO (initial public offer).
- It can be used for any business.
- It is here also invested by the people.
- Here also people of profit and loss are entitled.
- Investing in the company gives you some of your share.
- It has to be listed in the share market.
- Investing here depends on the logo.
- In this also fund is collected from crowdfunding.
- It happens in the care of the government, it is completely legal.
- The company gives some of its share in the form of share.
- In the internal matters, the right to vote is given.
- These companies have been working from time to time.
- They already have a product.
- IPO is done after the company’s establishment.
The last word about Initial Coin Offering is that ICO is getting very fast by looking at today’s crypto trend but its advantages and disadvantages are both. You should invest with proper market research. Many coins fail after some time or run away by scam.
So you should not invest too much in a coin. Investing in these for long time can be beneficial. You can earn money by following the rules of crypto trading.
I hope you know this information ICO (Initial Coin Offering) Work has got to know a lot more. If you like this post, please comment on it and yes, share it with your friends on social media also.