Initial coin offering is without a doubt the biggest upcoming trend in cryptocurrency. In simple words, an ICO is an initial coin offering made to the public. Simply put, an ICO is like crowdfunding with the added element of blockchain. This public offering is without interference of any regulatory bodies which is the crypto twist that these ICOs contain. So basically, a company looks for investors for its new cryptocurrency which other businesses pay for in shape of existing cryptocurrencies such as Bitcoin or Ethereum. Ever since the start of 2013, ICOs have been used to create new cryptocurrencies by getting funding for them in the form of preexisting cryptocurrencies.
Let’s take Ethereum for example. After its launch in 2014, Ethereum ICO raised up to $18 million in Bitcoin. Today, 5 years later, Ethereum is being traded for around $200.
So, it is significant that within a span of a few years the prices of Ethereum skyrocketed, which enabled its owners to bag huge amounts of profits. The projects started after the launch of Ethereum also show a lot of potential. An interesting example of this is Golem which was focused on creating a supercomputer to enable trading on it. This project launched 82 million tokens later sold for around 10,000 BTC. However, as of today the market value of Golem is 50,000.
Why ICOs work is because people want to become stakeholders of companies which have the potential of turning into the next tech giant out there. It is quite likely that by investing in ICOs you could become filthy rich in the blink of an eye granted that the startup gets the attention it needs.
You should obviously do your research before you invest all your money in an ICO. It is recommended that you figure out if the business idea makes sense or not, if there is demand for it and if the business can actually use cryptocurrency tokens to make it work.
Infograhic by: Pacsquare Technologies
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<strong>Infographic by- <a href=http://www.pacsquare.com/>Pacsquare Technologies – Blockchain service providers</a></strong>