All You Need To Know About ICO

Cryptocurrency has been a hot topic of discussion for some years now. Initial Coin Offerings (ICOs) is possibly the biggest and most popular trend in cryptocurrency today. An initial coin offering is a pre-product process which involves raising capital to bankroll a startup by offering interested investors units of a new cryptocurrency in lieu of well-established cryptocurrencies like Bitcoin or Ethereum. Usually, interested investors buy units of new tokens hoping that their value will increase considerably after a successful launch.

Two Kinds of ICOs

Two kinds of ICOs are active in the current market. One type of initial coin offering raises capital to fund an upcoming virtual currency or blockchain project that aims to create value through solving a problem. To potential investors, these ICOs claim their tokens can be exchanged for a fiat currency after a successful launch.

The other kind of ICOs raises money to fund tech startups. Here, traditional capital sources, like angel funding, crowdfunding, venture capital funding, or IPOs, are replaced by token sales in the expectation that their value will appreciate with the underlying business.

Benefits of Initial Coin Offering

Quick and Efficient Process for Fundraising

ICO is an unregulated process which does not require an approval from regulators or provide information pertaining to ongoing disclosures to potential investors. It is just a sketching out of a business plan on a white paper. Just about anyone can start an ICO, and the costs of promoting and marketing an ICO is quite affordable and lower when compared to other fundraising platforms.

ICOs Can Boost Decentralized Applications

ICOs can provide a significant boost to decentralized applications which allows them to gain a massive increase in their user base.

International Reach

An ICO provides a golden opportunity to a company to expand their outreach beyond their domestic boundaries in order to gain access to international investment markets, in an easy and uncomplicated manner, as opposed to an IPO where companies can issue their trading stocks in a registered country.

Retail Investors

An ICO provides opportunities to retail investors who seek to invest in new startups in their development stage, thus expecting a higher return on investment.

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