An initial coin offering (ICO) is a fundraising event in a firm offers a new cryptocurrency. In exchange for their financial contributions, investors obtain bitcoin.
In many respects, an ICO is the bitcoin equivalent of a stock market initial public offering (IPO). While ICOs can provide substantial rewards, their lack of regulation makes them exceedingly dangerous. This tutorial will teach you all you need to know about initial coin offerings ICO s, including how they work and some prominent instances.
What Is an ICO (Initial Coin Offering)?
The cryptocurrency industry’s portrayal of an initial public offering (IPO) is an initial coin offering (ICO) (IPO). An ICO can – get used by a firm to acquire funding – the development of a new coin, app, or service.
Through an initial coin offering, interested investors may acquire a new cryptocurrency token created by the company. This token may have – some usefulness with the firm’s product or service, or it may simply represent a stake in the company or project.
An Initial Coin Offering’s Procedure (ICO)
The first stage for a cryptocurrency startup that wants to generate funds through an ICO is to figure out how it will be structured. ICOs can get set up in a variety of methods, including:
Supply and pricing are both static:
A firm can specify a specified financing goal or limit, implies each ICO token has a defined price – the overall token supply gets fixed.
Dynamic pricing and static supply:
An ICO can have a fixed supply of tokens and a dynamic financing goal, which implies that the overall price per token gets determined by the amount of money raised in the ICO.