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The ICO guide or Initial Coin Offering
Since the creation of bitcoin
, a whole blockchain
and startup finance industry has emerged and is evolving exponentially.
What is most fashionable at the moment is undoubtedly the investment in new crypto currencies and crowdfunding, also called crowdfunding, of new projects related to virtual currencies.
This participative financing is also called ICO: Initial Coin Offering, that is initial offers for the sale of crypto currencies.
What are the ICOs for?
They allow everyone to invest in startups related to cryptocurrency, by buying tokens.
The startup will thus be able thanks to your participation to develop its project.
For your part, you will see the value of your chips increase with the progress of the project and thanks to the speculative market.
Should I invest in ICO?
The environment of ICO is not regulated, hence a number of scams in the field.
But in recent years the popularity of this type of investment has increased enormously and therefore deserves our interest.
Differences between IPO and ICO
An IPO is an initial offer of crypto-currencies (Initial Public Offering).
In the case of an IPO you acquire a partial ownership of the capital of the company.
For an ICO, this is not the case, your acquisition is an acquisition of tokens at very low prices
Advantages of an ICO
For the startup, the benefits are obvious, it is to receive enough funds to develop their business project, and at a very early stage.
For the investors, it is a question of financing this commercial project and hoping to resell their chips with a good profit if the startup carries out its project and meets the expected success.
The principle of Crowdsale
Unlike IPOs, where the principle of crowdfunding is applied, ICOs operate on the principle of Crowdsale, ie the company sells its own cryptocurrency to increase its funding. The purchase of the virtual currency is usually made in dollars, Ethereum
Who launched the first ICO and which was the most successful?
The first company to launch an ICO in 2013 is Mastercoin, which raised $ 5 million in bitcoin by selling its virtual currency.
The one who probably broke all records is Bancor
, which allows the creation of smart tokens, and has raised the modest sum of 150 million dollars!
How do I start an ICO?
The company wishing to launch an ICO must publish a white paper explaining the project specifications: the concept, the expected commercial value, the amount needed to launch the company, the number of pieces offered, the duration of the ICO etc.
Can an ICO fail?
Of course, if the company does not manage to obtain the necessary amount in the time allotted for this purpose, the funds are returned to the investors, who can regroup, and relaunch a new ICO.
Regulation of ICO
There is no truly governmental regulation today.
This allows one side to create many opportunities that can be excellent investments.
But beware of crooks !!
We must of course be wary of scammers who can mount a pseudo project on the web and take advantage of the disbelief of an unsuspecting public.
How to avoid scams in ICO
First, before investing in an ICO, ensure that the project is viable, detailed, realistic, transparent, and supported by a large community.
Ethereum and ICO
As we said, Mastercoin was the first to launch an ICO and since their number has continued to grow.
But it was with Ethereum in 2014 that the framework of the ICO and blockchain changed.
At the time Ethereum was collecting $ 18 million which was then considered a huge amount.
The Ethereum has thus opened the door to a whole series of innovations and to ICO's campaigns.
Ethereum is since a distributed platform for crowdfunding and fundraising.
Increasing the value of chips.
The increase in value of some tokens has been totally spectacular.
At the beginning of its launch Ether was sold for 0.0005 bitcoin.
Three years later its price had increased by 10,000%!Securing funds
Of course, these spectacular increases are not the case for all currencies.
And as we have already said, this has given rise at the same time to a large number of fraudsters wanting to take advantage of the credulity of the novices.
But there is a clear improvement, because today a company that wants to launch an ICO will do everything to prove its credibility and potential.
They also invest in securing the funds of their investors through a set of private keys, one of which may belong to an independent and trusted third party.
How to invest?
Cryptocurrencies are usually sold at a very low price and at a fixed price.
There are nearly 1000 crypto currencies and everything suggests that they will not all be successful.
So you have to choose your ICO carefully and carefully and be prepared not to see some of the projects succeed.
Only risk money that can be lost, this is the advice we can give you.
If you want to invest in an ICO you can turn to very experienced cryptocurrency traders / brokers that you will find in our application.
You can also find very good information on our website and by subscribing to our newsletter.
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