Home ICO - what is it?
ICO - what is it?
Nowadays, the term ICO is used in the slang of the cryptographic industry. A great number of people who have just started their adventure with digital assets do not have the foggiest idea what it exactly means. Therefore, we will analyze the issue in as simple way as it is possible to help you understand the concept of ICO projects better. The question "what is the ICO" which is constantly crossing your mind, will no longer concern you. In order to understand its entire concept better, let's start with the explanation of the abbreviation ICO. Initial Coin Offering are the activities of startups (that is newly formed companies) of which main aim is to collect capital from investors in order to develop their own project. To illustrate this in a more approachable way, we will use an example of the company X, that has a great idea for the business but at the same time, unfortunately, it lacks the capital to be able to develop it. This company starts issuing tokens to finance their own goal from those tokens’ sale. Since we already know what ICO is, let's think about why investors are willing to purchase tokens issued by this X company at all? It is a common knowledge, that nobody is doing it for charity. What benefits can we obtain from investing in ICO then? Well, this way we have an opportunity to get involved in a given project and often to get a quick return on investment as well. It is also worth adding that ICO is an investment available to any person who has cryptocurrency that can be used to support a given project. Do you think you know perfectly well what ICO is now? You are wrong, then! Consider the fact, that not everything is always as easy as it appears to us, because there is the other side of the coin which should be remembered. It is therefore worth knowing that ICO projects are not regulated, nor are they subject to any authorities. What does this involve? It is not difficult to guess at this point, that this is the reason why cryptographic crime grows around projects of this kind. Investors should be more cautious to not get tricked. Your financial resources may be stolen by hackers who may try to replace an address of the wallet as they want to. There were not many documented cases like that, though, but it is still better to be safe than sorry. Let's sum the whole thread up - we already know what ICO is and we are aware of its pros and cons. We are then left with the question of how you can differentiate between a valuable project and a scam. First and foremost, pay attention to details like - who is responsible for the project, what the project concerns, what are the chances for its development, how big is the interest around it, whether it is an original idea (not plagiarized), and, finally, what the structure of this ICO and the usefulness of the issued token look like. In this way, we went through a number of questions that doubtlessly crossed your mind more than once, not letting you get some rest. You can be proud of yourself because you have basic knowledge about ICO now.