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Initial Coin Offering (ICO)

In the sphere of cryptocurrencies, initial coins offerings or simply ICO are used to raise money for business purposes. It is mostly used by all businesses in order to bypass the raising of capital that is regulated as well as a meticulous process required by the banks and the venture capitalists.

Numerous Blockchain technology is now using ICO. In this system, the business sets up digital tokens, that is, cryptocurrencies. These tokens are issued based upon the amount the business wants to raise and they have a fixed value. They are then sold in an initial offer. ICO is very much alike to an Initial Public Offer. In an IPO, the business sells its shares for the first time in the market. A price band is set whereby the investors can bid.

Whereas an ICO, tokens are generated and a price is decided upon these tokens. These tokens are on a blockchain concept and determine their value based upon demand. The idea conceives on the philosophy that on blockchain, you can carry out without the need of a central authority, for example a central bank.

Everybody can invest in an ICO development. You can purchase it online on cryptocurrency exchanges that support it. The newly created tokens can be altered with existing famous cryptocurrencies like Bitcoin, Ethereum, or with a fiat currency such as rupee or dollar. Besides, they can be traded on cryptocurrencies exchanges. ICO is not standardized. This is why, businesses that issue it do not need to inform an exchange, or conform to any designated rules as they do have for IPO.

 

Benefits of ICO

Every business to start-up requires money. Initial Coin Offering is the best option to raise funds in order to give an advance to these developments. Developers look forward to digital currencies to settle new projects. They communicate far-reaching communities about the project and use white papers that have thorough information, thus people can make investments.

Since the creation of ICO in 2014, it has gained an immense popularity, and it has been very much successful. Ethereal was the first to start it, and numerous people were drawn to this technology. After this new concept was born, more ICO was created and its number boosted every year. Digital currency was the new star, and its popularity is turning it into a bright future. ICO can finance numerous projects at one time. There is a humongous demand of ICO. It is the newest and freshest way to raise money for a project.