Anyone who has a minimum of financial knowledge certainly knows what an IPO is (it’s a lottery ticket, right), but how about an ICO? No, not a Powerball ticket, it’s an Initial Coin Offering. Don’t know about you, but here at FintekNews we found this very insightful.
An Initial Coin offering has become a way to raise capital for technology projects that are based on blockchain and cryptocurrencies. It’s a crowdsale that allows anyone who wants to support a project help in the development and pay for expenses that always come with startups. Here are the particulars (advantages, pitfalls, the how’s and why’s, etc) that explain the ICO markets. Excellent educational read. (Bill Taylor/CEO)
“Just as blockchain, the technology that underlies bitcoin and other cryptocurrencies, continues to show potential in transforming many industries, it is also showing its potential in the crowdfunding and investment space.
Initial Coin Offering (ICO) has become a popular way to raise funds for projects that are based on blockchain and cryptocurrencies. An ICO is a cryptocoin crowdsale, where a blockchain-based project allows enthusiasts and supporters to invest in the project by purchasing part of its cryptocurrency tokens in advance. ICOs usually take place in the early phases of a project, and the raised funds are then used to pay development and launch expenses.
One of the most successful examples was the famous cryptocurrency project Ethereum, which raised $18 million in ICO and reached an approx. $1 billion market cap in 2016.
ICOs are often compared to crowdfunding and IPOs. But while they have common traits with all of those, they are unique in their own way and bring innovations to the investment landscape that weren’t possible before.
They resemble IPOs (Initial Public Offering) in that they are used to sell a stake and raise money, and they offer investors potential profit in exchange for a risk and possible failure to deliver on the promise.”
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