What is an ICO?
If you’re wondering what an ICO is, we’ve put together a short guide for you to read below.
What is an ICO?
An ICO refers to Initial Coin Offerings and is a form of an Initial Public Offering, otherwise known as IPO. When coming up with a new cryptocurrency, and trying to launch it successfully, this is an alternative form of investment.
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An ICO is used to entice investors into buying your new form of cryptocurrency to boost its value and its circulation. A person using an ICO would hope that more and more people would buy into their cryptocurrency. The best way to encourage this would be to create a ‘white paper’ and a website detailing the usefulness of the cryptocurrency.
Are ICOs a Typical Form of Investment?
The answer is “no,” investing in an ICO would not guarantee any profits. Unlike more traditional forms of investment, an ICO does not offer a portion of the company involved in making the cryptocurrency to the investor. Instead, the investor would hold a portion of a cryptocurrency with no value in hopes that one day the value of this new currency would rise.
Who Can Start an ICO?
Anyone who has access to the right technology, such as a regular computer, would be able to set out an ICO and come up with their own cryptocurrency. There is little to no regulation over them in most countries, which can lead to a lot of scams and easy ways to raise money.
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