ICO-IPO-version-cryptocurrency ICO stands for "Initial Coin Offering",
an Anglo-Saxon term derived from the expression IPO, itself acronym for "Initial Public Offering" which designates an IPO. An ICO is also sometimes called a “crowdsale” (literally crowd selling), in reference to crowdfunding.
And indeed, an ICO is a bit like the mix between an IPO and a crowdfunding campaign. ICO: fundraising in virtual currency If there was just one thing to remember, it's this: an ICO is cryptocurrency fundraising.
The fundraising company issues digital assets (tokens or tokens) that are exchangeable for cryptocurrencies during the start-up phase of a project. The interested individual, as long as he owns cryptocurrency, can invest in a project initiating an ICO.
To invest, the internet user exchanges the amount of cryptocurrency they want for tokens, issued by the project carrying out their ICO. Be careful, where it gets complicated is that the tokens issued by the company initiating the ICO are intended to be usable in the project funded by the ICO in question. However, it should be clarified that a token does not represent a part of the company, unlike a share. In fact, buying tokens during an ICO is in fact pre-paying for the product or service to be developed.
They can therefore be considered as user rights for the services offered by the company that initiated the ICO. This principle is not new and already exists for a number of fundraisers using donation crowdfunding where the donation is rarely disinterested but obeys the logic of the counter-donation (a reduction on the future service, a free product when the first will have been produced, etc.).
As a long speech is often less telling than an example, let's go back to the case of PowerLedger, the first Australian company to have an ICO. It paid its investors in sparks, an original cryptocurrency, usable on its private blockchain and allowing the acquisition of megawatts of electricity. What is an ICO used for and what does it finance? Advertisementetoro virtual currency ICOs are intimately linked to blockchain technology. Indeed, most often, they are used to finance the launch of decentralized applications that work on a specific blockchain protocol, such as Ethereum or Bitcoin: ICOs can also be used to directly finance Blockchain protocols, such as the Tezos protocol for example. which in July 2017 raised the equivalent of over $ 232 million, making it the ICO that raised the most money that year.
This is also the case with DomRaider, which has sold 560 million DRT tokens (DomRaider Token) to finance the development of its Blockchain technology which is revolutionizing the auction sector. An ICO can also be used to launch a new cryptocurrency. In this case, the tokens or tokens issued are directly exchangeable on “marketplaces” specialized in cryptocurrencies, such as Poloniex, Kraken or Bittrex.
ICOs are indeed a privileged way to launch your own cryptocurrency and, very often, it pays! “Some investors will sell them back for a lot more than they bought them. This is purely speculative ", underlines in an interview with the Journal du Net Simon Polrot, lawyer and expert in blockchain which specifies:" Ethereum thus offers a return of 15,552% since its ICO in 2014! "
Telegram's ICO, one of the largest to date, with $ 1.7 billion raised, allowed the Russian group to launch its own cryptocurrency: the Gram. This is the first general public cryptocurrency backed by a blockchain technology based on a “new generation” protocol which notably allows the use of a micropayment service free of international taxes. The ICO is disrupting the digital economy through its modernity Like crowdfunding in its day, ICOs make it possible to bypass the historical and well-established players in financing. It is therefore a real upheaval of the traditional rules of the digital economy.