Part 3
SECTION A | ICO 101 | QUICK INTRODUCTION TO ICOs |
- What is an ICO?
An Inital Coin Offering — in some cases also referred to as Initial Currency Offering — is a type of funding mechanism typically used by and for cryptocurrency projects.
The best way to look at it is actually by seeing it as some sort of a combination of:
The fundraising aspect of a crowdfunding or crowd sale (be it fiat money or crypto, but generally mostly the latter), including the fact that some sort of soft/hard cap has to be reached in order to be valid (i.e. a minimum amount should be raised)
The product maturity of an early stage VC investment or even business angel round (i.e. a very immature product, and in a lot of cases actually just the mere “idea” of that product)
The fact that in return for the funds, some sort of a “token” is received, the latter becoming “tradable” just as in the case of an IPO or Initial Public Offering (i.e. when a private company goes public and everyone can start buying — “trading” — shares)
The token sale runs on blockchain infrastructure and the tokens become available on a blockchain platform (such as e.g. the Ethereum blockchain for ERC20 tokens)
Read full guide: https://hackernoon.com/a-comprehensive-guide-to-icos-crypto-funding-the-rise-the-boom-the-bust-the-next-b159fdf38010
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