Cryptocurrencies are becoming more and more integrated into society and everyday life. Their Economic progress brings them closer to more relatives traditional monetary systems. The ICO, the cryptocurrency equivalent of Initial Public Offering (IPO), it already is operationbut what is an ICO?
What is an ICO?
An initial coin offering is a method by crypto companies a accumulate capital for your projects. And in return they receive a certain number of tokens. Investors are motivated by the possibility that the currency gaining valuethus guaranteeing an asset Return of investment.
How does an ICO work?
Coin launch campaigns organize ICO token sales in three different ways.
Static offer and static price
The company that issues the ICO for cryptocurrencies offers a set the amount of chips a Fixed price. As such, investors know the available number. They also know that the the price will remain unchanged During the operation. Finally, the company knows how much benefit will you get?.
Static offer and dynamic price
This method supports companies with open funding goals or unpredictable projected costs. releasing a set of numbers of tokens, the trend of the sale and the expected expenses affect ICO token price. Usually if it is He behavesthe price will grow to protect the as high as possible capital.
Dynamic offer and static price
It works very similar to the previous example. But instead of supply affecting price, the price affects the number of tokens which are released. If the company offering the initial token gets close to its goal, it can lower the offer to keep the token. high asking price.
If you are interested in learning more, check out our article on buying cryptocurrencies.
How to start an ICO?
Virtually anyone who has technology to produce cryptocurrencies can issue an ICO, as long as it is not in direct conflict with local legal regulations.
What is a White Paper?
Every project has to start somewhere. First, think about yours ideas, goals and aspirations. How will you transform them? in reality? Collect your thoughts and take notes. This White Paper will be base of your cryptocurrency ICO strategy.
Crowdfunding ICOs can often be considered unreliable businesses as there is a high probability that they are scams. If you want highlights and be more Convincing investors, you need to make sure your white paper is well written, correctly structured and rooted in reality. All the objectives described must be explained. how do you expect to reach them Y How long will it take. By doing so, you can convince investors of the integrity of your project and your competence to see it through.
Investigate potential legal issues
China bans ICOs. Therefore, it is better to find another way to raise capital for your business there. While in the United States and most of Europethe legitimacy of the public offering of coins is somehow Gray. So once you have your ideas on paper, contact a business law attorney. In this way, you can avoid any legal problems.
Check who’s who in your field
For your project to be successful, it must serve a unique niche in the market. Find a problem that no one has decided to solve and work on it. That way, you’ll be sure it’ll be there. no competitionespecially no great player who would enter direct rivalry with you.
In case your idea is not unique, do not hesitate. Watch like the competition decided to do it solve the problem. There are always something to improve, or you could even develop a radically different way of solving the same problem. Transporting buckets of water and irrigation canals solves the same problem. One solves it much more efficiently by thinking outside the box or bucket, in this case.
Launch your token to the world
Once prepared, create your ICO token and release it to the public. Although this topic deserves an article of its own, we will try to be brief. You must first choose an existing block chain technology or create your own.
So you should create a website or some other media to inform people from your ICO. Of course, you should have already set up a crypto wallet. You should also make sure you have the methodology to receive/send your currency and so on.
support your project
it doesn’t get better proof of a concept to watch it grow. It’s best to keep your ICO coin offering running at least a month. In this way, you will know that you have started to move towards the correct address.
To achieve this, share your White Paper with your audience. Constantly keep in contact with your current and potential investorsanswering your questions and clear up any ambiguity. With a little luck and a little work, you’ll get the ongoing project.
Release your token on cryptocurrency exchanges
After the project has run for a reasonable amount of time you should be able to insert some tokens circulation. Now you can drop them major cryptocurrency exchanges to make it gain value. Stay in touch with your investors. Continue post new information in your project. If all the stars align, you could launch the new Bitcoin.
Over the years, some extremely successful ICOs have emerged. Here is a short list of some of the most memorable examples.
- Ethereal – When it comes to successfully investing in ICOs, not many can boast of the success of this coin. First sold out by $0.31 and reached a price of more than $3,000.
- NXT – While not trending today, the company has successfully raised over $16,000 worth of Bitcoin.
- party – The Particl ICO was intended to fund an anonymous marketplace. trading initially by $1.50the token managed to reach prices of more than $50.
- stratis – Your coin offering was successful successful fundraising it was necessary that Finance a platform for development and maintenance of software products.
- NEO – Contrary to all expectations, this is a successful Chinese ICO project. Implemented before the China ban and supported by both Microsoft and the Chinese governmentwas one of the most successful ICO projects.
ICO versus IPO
Considering that the ICO practice originated from the Initial Public Offering practice, it is natural to compare the two.
An ICO is the sale of digital currency tokens in exchange of financing. These tokens may or may not increase in value throughout the scope of the project. In theory, the company is free to issue as many as it wishes, although this could negatively affect its price. Currently there is little to do no regulation when it comes to ICOs.
An IPO is a sale of Titles for the public. These could be stocks, bonds, warrants, or other people. Before issuing securities, a company Consult with investment banks in its value and possible returns. exist strict regulations govern IPOs, make them happen safer for investors
pros and cons
Let’s break down the good and the bad of this.
- Safety – Only security tokens offer any kind of protection for buyers. Y only professionals in the sector they can buy them, everyone else has to take the risk.
- Accessibility – Anyone can decide to buy tokens from a public coin offering. This is a problem for both the company and the investors, as inexperienced investors could have Difficulty meeting project expectations.
- Mostly unregulated – almost nobody you can start an ICO. This means that scammers have a good chance of reaching unsuspecting investors.
- Volatility – The price of a token can drastically change a couple of times in the same day. the window for sale can be relatively short.
- Accessibility – Although it appears as a scammer, it also has its advantages. Who with a little reserve money in your pocket they can try their luck financing the next big thing.
- fast returns – while a traditional stock can take years to develop, a successful cryptocurrency can multiply its worth repeatedly in a few days.
- Independence – exist no banks Y no mediator. your money is yoursreviewed by your, and no one else has access to it. This is unless you intentionally or unintentionally do so.
- Infallibility – the blockchain makes it almost impossible for a fake coin to enter the market. All origins and transactions are accounted for and are publicly accessible.
Crowdfunding ICOs are a good way to acquire new and established companies additional understandl They are also powerful investments for investors looking for a fast answer. You should be Watch out when investment planning. Research the company, the people behind it, and their ideas. If all goes well, why not give it a try?
If you are interested in learning more about cryptocurrencies, check out this article full of interesting cryptocurrency statistics.
FREQUENTLY ASKED QUESTIONS.
Is Bitcoin an ICO?
ICO is the practice of selling digital currencies to accumulate capital for a Bitcoin project is a cryptocurrency.
Is an ICO legal in the United States?
The legality of the ICO in the United States has yet to be determined. There are no specific laws that regulate it. However, the legislation is constantly evolving. Consult a legal specialist before deciding to participate in this activity.
How can I invest in a crypto ICO?
First, you need to familiarize yourself with the concepts of cryptocurrency. Find out what is an ICO, what is Blockchain, what are cryptocurrencies and how to use them. once you are sure In your familiarity with these concepts, identify and research the companies that are currently issuing ICOs. This can be done TOP ICO ListICO Checklistsmith and crown.
Is an ICO a stock?
No government or financial institution regulates the tokens issued through an ICO. For all intents and purposes, they are right. CRYPTOCURRENCIES sold to investors. they are owners no interest, no quarterly returnsor whatever else is expected of her securities issued in accordance with the law.
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