ICO: What Is And How The Initial Currency Offer Works In Criptovalute.

Funding by start-ups once followed the logic of venture capital and crowdfunding , but in recent times there has been an increase in fundraising through the so-called ICOs. This procedure takes place entirely in the world of cryptocurrencies and its advantages are numerous, although recently there have been numerous cases of fraud .

One of the most appreciated features of ” deals Rate Initial ” (Initial Offering Coin, ICO) is their liquidity : investors can release the funds invested in relatively short periods of time, contrary to what happens with venture capital. This is just one of the factors contributing to their success: but what is an ICO (United Bitcoin Trezor Electrum) technically and how does it work?

What is an ICO?

ICO stands for ” Initial Coin Offering “, or “initial money offer” . The concept is similar to that of the IPO , a well-known operation on the stock market with which listed companies enter or increase their capital.

An ICO is a transaction through which a start-up provides encryption to investors, more commonly known as tokens , with a view to investing: it is a case quite different from the issue of shares, which takes place through the IPO operation.

Tokens are coins offered during an ICO and can be considered equivalent to the shares purchased under an IPO. The vast majority of ICOs issue tokens in exchange for real money (dollars, euros or other “traditional” currency), which allows investors to access the functionality of a particular project. ICOs tend to remain open for a period of a few weeks , up to a maximum of one month.

For those companies that raise capital through ICOs (United Bitcoin Trezor Electrum), the benefits are multiple. First of all, the fact of not being subject to taxation , which is the case with IPOs. The second advantage is that the sales of tokens are direct and investors base their decisions on the content of the projects prepared by the same company.

The ICO, the launch of a new cryptocurrency

ICOs are mainly used as a collection of startup capital for start-ups , but not only. For example, they are also used as a sales basis for a service to be launched on the market or for a new cryptocurrency . In most cases it is the investors themselves who become consumers of the service offered by the company; this allows investors to buy coins at a discounted price, even if their value will be dictated by the bid-offer mechanism once they are placed on the market.

In controlling ICOs there is no guarantee that we can safely distinguish good from bad investments or recognize fraudulent investors. Right now there is a lot of investor interest, especially because of the considerable returns this procedure has enjoyed to date and the ability to determine prices.