What are the initial currency support operations ( Initial Coin Offering)


Initial currency support (ICO) or Initial Coin Offering is
 a recent concept of collective finance projects in the area of ​​digital currencies and blockbuster industries. The term "ICO" refers to initial currency support, sometimes referred to as Crowdsale, when a company launches its own currency for the purpose of financing. They usually release a certain number of this digital currency and then sell it to their intended audience. It is most likely to be selling against the Betquin, but this may be against official currencies as well.
 
As a result, the company gets the capital to fund the process of developing its own products, while the public gets their own equity from the currency. In addition, the public owns the full ownership of these shares.
 
Were there many successful initial currency support operations?
Yes, there are many examples. The first project to launch the ICO process was Mastercoin . Where he secured $ 5 million from Pitcairn in 2013 through his initial currency support process. Many other companies for example, such as Atherom in 2014, or Waves in 2016, have also raised more than $ 18 million and $ 16 million in return. This indicates that initial currency support is a proven tool in emerging digital currency projects, provided that the product is in demand, as well as a strong working team.

 
 
 

 How different operations support currency initial " the ICO for the operations of the IPO " an IPO "?

The meaning of an IPO platform is "initial public offering". Here, there are some similarities between these two concepts. However, there are many major differences.
For one of them, the company issued during the IPO "shares of an IPO ", always refers to the ownership interest in the company concerned. But this is not explained in the same way in the case of digital currencies, as the digital currency is sold to the public in initial currency support operations. They can be used to transfer voting powers in some projects, but they are often just a currency that you can send to other users and trade against other currencies.
 
 
 
On the other hand, the other crucial difference is that the IPO is largely regulated by the government. This requires the participating company to prepare large amounts of worksheets before announcing their shares. It also has serious consequences for non-compliance. By contrast, the collective financing of the digital currency is new, largely unregulated by the government. This means that any project can launch the ICO process at any time with little preparation. And anyone can participate in it and contribute its money, regardless of the country in which it resides. As a result, this liberalized environment has more opportunities for new risks than a more conservative public offering.
 

What other goodies are initial currency support operations providing?

This depends on the project in question. Sometimes, they may have some additional features. A good example is the " Storjcoin " project It is a digital currency issued by Storj.io during its own ICO process. Where Storj.io is an emerging platform for decentralized cloud storage, and when the main product is announced users will be able to spend the Storjcoin currencyIn storage space. As well as the possibility of trading through other currencies. Another notable example is etherium, a platform for building decentralized applications of all kinds. Its currency, Ether, is actively used to keep running applications that have already been built on the platform. In theory, currencies of initial currency support operations can be used in anything, and the range of possible uses depends on the scope of the project.
 

What is the benefit of initial currency support operations for you?

There are many potential benefits when participating in initial currency support operations. The first is that you help the company launch their products. In addition, there is a chance to make a profit by selling the currency of the initial currency you bought. As with " Kickstarter"The primary objective of each participant in supporting the primary currency is to help finance a project they consider interesting and attractive. However, there is an additional opportunity to make a profit in the process. In most cases, the digital currency issued during initial currency support is sold at a fixed rate against the Betquin or against the US dollar. Where this price is not supported by anything other than the faith of the community in the development team to launch the final product at some point in the future, so it is usually very low price. However, after the project is developed and launched, the value of the currency becomes related to a real product of work. This always leads to an increase in prices. Hence, the supporters of this project earn huge profits when selling the currency at a high price.
 
 
For example, when the initial lithium currency subsidy for 2014 was made, the currency was sold at $ 0.3 to $ 0.4. Following the launch of the core program in July 2015, its price rose significantly to $ 19.42. This means that some of the more fortunate participants were able to claim an ROI of more than 6000 percent. However, keep in mind that these profits are not guaranteed, initial currency support may fail, in which case all contributions will be returned to the senders. Even if successful, there remains the possibility that developers will be unable to provide the final product, and therefore the price of the currency will not rise. This is a risk that all participants in initial currency support operations must consider when deciding to contribute to any of these transactions.
 
 

Where can be found on more of the projects that will launch operations  for ICO with?

There are dedicated platforms that make finding and joining ICO easy. These include " Waves ", " ICO Bazaar " and " ICO Calendar ". There are also a lot of Blockin projects whose ICO operations have been launched on their own sites. In these cases, however, exposure is limited to the campaign, it is not easy to attract a lot of people to your page yourself. That is why people have begun to build ICO platforms from various start-ups, such as Kickstarter and Indiegogo , for non-blockbuster projects.
 
 

You can be the owners of the project to escape with money supporters?

The guarantees provided by the Government in these operations are very few, depending on the country. However, most companies that have launched their own ICO operations impose restrictions on themselves to provide sufficient confidence and transparency to shareholders. Where ICO operations have few rules or restrictions. However, entrepreneurs soon realized that without government regulations, it was their duty to establish conditions that would ensure sufficient trust from the community and hence an adequate flow of contributions. This has led to a number of project constraints. Here are some of them:

  1. Store the contributions of community members in the portfolios of the guarantee. In order to access funds stored in the escrow account, owners need several special keys. So that one of the keys is usually owned by a trusted third party and is offline in project development.
  1. Establish a legal entity for the company and document a set of terms and conditions of the IIO.

How can detect fraudulent ICO operations  ? 

There are many signs of fraudulent ICO operations, the most obvious of which are: anonymous developers, lack of warranty portfolio, unclear objectives or being unrealistic. The digital currency community has been dealing with a number of fraudulent ICO operations over the past few years. There are also some common red signals for most of these campaigns, where you can avoid potentially dangerous companies. Such as:


  1. Project developers are either unknown or unknown to everyone in the community.
  1. Lack of guarantee portfolio for contributions. If all the keys to the shareholders' wallets are concentrated in the hands of the owners of the project, nothing prevents them from escaping these funds.
  1. Project objectives are unrealistic or unclear. When the project does not have a realistic plan of action, it means that the team behind it does not know what to do.
  1. Lack of transparency. The presentation of the progress of work in the project to the public is considered the standard of the digital currency industry. If developers do not offer demo versions of their products, or at least provide video or other types of progress reports on the project, they may have nothing to show at all.
Having identified these situations, you should avoid contributing your money to projects that have any of the above problems.
 


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