What is an ICO? Commentary for Beginners in Cryptocurrency
What is an ICO
ICO stands for Initial Coin Offering, which is the cryptocurrency version of an IPO (Initial Public Offering). It is a mechanism to raise necessary funds for a cryptocurrency business. Investors can take tokens and profit if their tokens are listed on an exchange and when prices rise.
Pros and cons of an ICO
Pros of an ICO
* Funds can be raise quickly
* There is no repayment obligation
* Funds can be gathered globally
Cons of an ICO
* Hurdles can be high such as with white lists
Pros for Investors
* If the project succeeds profits will be made
* Start-ups can be invested in globally
* Benefits from early round/seed investing can be obtained
Cons for Investors
* Risk of cost collapsing
* Failure of projects
* Risk of fraud
Past ICO fund raising rankings
Let’s look at past ICOs. “Telegram ICO” ranked number one in the largest scale successfully raised $1.7 billion in funding. Also ICO “COMSA” from Japan is ranked 7th. Expected as a means of raising new funds, there are projects that are not moving at all after ICO whereby the development environment of these projects being the most important issue.
How to participate in ICOs
IICO information can be obtained through ICO calendars, SNS, etc.
ICO Calendar (COINTELEGRAPH)
Companies conducting ICOs issue “white papers” that contain the contents of projects and ICO information. Investors will read this and judge whether to invest. Participation methods are also listed in “white papers” and website homepages.
ICOs are gaining considerable attention as a means of financing for the next generation. Many projects will be born through ICOs in the future. On the other hand, there are no regulations, so there are currently fraudulent ICOs. Please do your due diligence and invest at your own risk.