What is an ICO?

Bitcoin continues to rise in value and it is rapidly heading for higher prices than ever. The impressive rise in value means that a lot of people are taking notice of it, as well as many other cryptocurrencies. While established cryptocurrencies like Bitcoin and Ethereum are getting plenty of limelight at the moment, other cryptocurrencies are in the early stages of development, no doubt spurred on by the success of others. The process of developing a cryptocurrency involves many different stages but one of the most important, and one which is attracting a lot of attention in the current wave of cryptocurrency popularity is the ICO.

ICO stands for initial coin offering and its name derives from the term initial public offering which is commonly used in the business world when shares in a company are sold to the public. While similar in a way, the two concepts also differ and it is important for cryptocurrency enthusiasts to be aware of what an ICO involves. While each entity preparing an ICO will have different rules about what it entails and how they can be accessed, generally, ICOs possess some of the following components: ICOs sell participation of some kind in the project they are proposing; ICOs usually have a pre-prepared digital asset to show to its investors; the value of the ICO is decided by the benefits the prospective project offers; the price is generally set by the project’s creators; and there can be several rounds of ICOs before the final product is actually released.

Another important thing to remember with ICOs is the difference between coin ICOs and token ICOs. Again, generally speaking, a coin ICO gives the buyer the possibility to collaborate in some shape or form in the project described while a token ICO gives the owner a share of the spoils as an owner or in the form of royalties earned from the project. However, depending on the company and the rules set out in the ICOs description, some token ICO purchases, while entitling you to a slice of the profits, will not allow you to have a say in the direction of the project so this is something any prospective investors will need to be aware of.

ICOs are the way for cryptocurrencies to be used in the development of new cryptocurrencies or for other projects. It is a digital form of crowdfunding and makes use of blockchain technology to proceed with the development. ICOs are currently used mostly for the launches of new cryptocurrencies.

There are plenty of ICOs currently underway and it is the latest way to get in on the ground level with the latest developments in digital currencies and technologies. If you are interested in getting involved in ICOs and being an early investor of the next big thing, it is worth taking the time to read more about ICOs and the specific terms offered for each particular one. Keep any eye out for the right idea and you could be investing in the Internet’s next success story.

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