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What is an ICO? Get to know all details.

What is an ICO? Get to know all details.

ICO stands for Initial Coin Offering. We can draw a parallel with IPO, Initial Public Offering though it is strictly not similar.

An initial coin offering is one form of crowdsourcing to raise funds using cryptocurrencies or crypto-coins or tokens, generally sold at a discounted price. The price of tokens/coins appreciates based on, one a speculation and second the technologies backed by ICO. 

In short, what it means is that startups or companies can raise funds from the public using crypto-tokens rather than going through VCs.

However, unlike IPO, where investors buy or invest in company shares, ICO offers tokens that are not shared but are a utility tokens. They do not give voting rights or decision-making rights to buyers of tokens. Rules which govern IPOs, require assets to back the firms selling equity. This is not the case for ICO. The ICO market is almost self-regulated without any government backing at the time of writing this article. ICO are generally backed by detailed white-papers and technical documents. We can see them as a red herring prospectus in case of IPO.

For payment in a currency, which is a cryptocurrency, firm exchange their created cryptocurrencies - called tokens - during ICOs.  The most popular crypto-currencies to buy tokens from ICO are Bitcoin and Etherium. 

Read side-by-side differences BitCoin Vs Ethereum

ICO investors gain when their profit in value at a faster speed than the currency they used to cover them. Capital profits of these tokens that were appreciated or the value can only be accomplished if they're exchangeable for tender, or for services or goods. These fundraising ICOs are conducted online and are typically announced on a cryptocurrency forum. 

Karmacoin held the first ICO of cryptocurrencies, with its Apr 2014 sale of karmashares. Ethereum sold US$18 million of ether components in July-August of 2014, valuing each ether at less compared to US$1. The biggest ICO happened in May 2016 is D. A.O., Decentralized Autonomous Organization—aka, the DAO—which was a decentralized venture fund built on Ethereum. Ripple XRP is another crypto-tokens backed by successful ICO.
Read side-by-side differences BitCoin Vs Ripple

Practically it is difficult to list all ICOs here. But following resources can help you to find a lot of information about past, current and future ICO:
  1. https://icotracker.net/
  2. https://www.coindesk.com/ico-tracker/
  3. https://www.icoalert.com/
  4. https://www.coinschedule.com/
  5. https://coinmarketcap.com
  6. https://tokenmarket.net/ico-calendar
  7. https://ico-list.com
Though an unregulated market, it would be a matter of time that state governments will start regulating these ICO on similar lines of IPO.

Do you invest in ICOs?
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By Mandar Pise

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