What are ICO? Learn about projects to raise capital ICO
What are ICOs? What is ICO crowdfunding? The history of the birth of ICO will be analyzed in the article below
Last updated
What are ICOs? What is ICO crowdfunding? The history of the birth of ICO will be analyzed in the article below
Last updated
ICO (short for Initial coin offering) is a way of raising capital through the use of cryptocurrency, the same nature as IEO, IDO. In ICO a percentage of newly issued tokens will be sold to investors in exchange for legal money. or other tokens like Bitcoin.
The term can be similar to 'token sale' or crowdsale. ICOs can sell ownership or royalties to a project. According to Amy Wan, a partner at Trowbridge Sidoti LLP that enforces crowdfunding and syndication, “the coin in an ICO is a token of ownership of a business – a digital stock certificate if you will.” , where investors get shares in the ownership of the company, for ICOs investors buy the company's coins, the value can go up if the business is successful.
For example, Primexbt trading company, or exchanges want to sell management tokens, they will raise capital through ICO sales for users to buy to get shares represented by tokens.
The first token sale (aka ICO) was held by Mastercoin in July 2013. Ethereum raised capital with a token sale in 2014, raising the funds raised to 3,700 BTC in the first 12 hours, equivalent to with about 2.3 million dollars. ICOs and token sales are very popular right now. As of May 2017, there are about 20 offerings in a month, and a new web browser Brave's ICO generates about $35 million in 30 seconds. There are at least 18 websites that track ICOs. At the end of August 2017, $1.8 billion worth of ICO sales were made during the year, ten times more than all of 2016. At least 400 ICOs were conducted in 2017.
Ethereum is the leading blockchain platform for ICOs with over 50% market share. The Ethereum network of ICOs has also led to scams, Ponzi schemes, and other scams, accounting for around 10% of ICOs.
In July 2017, the US Securities and Exchange Commission (SEC) indicated that it may have the power to apply federal securities laws to ICOs. The SEC did not say that all credit cards (ICCs) would necessarily be considered securities, but that decision would be made on a case-by-case basis. The SEC's action may encourage more mature investors to invest in ICOs, although ICOs often discourage the participation of U.S. investors to fall outside the jurisdiction of the U.S. government.
On September 4, 2017, seven Chinese financial regulators officially banned all ICOs in the People's Republic of China, requiring earnings from all past ICOs to be refunded. to investors or face “severe penalties under the law.” This action by Chinese regulators has led to a sell-off of stocks for most of the token algorithms. Before China's ban, the ICO raised nearly $400 million from around 100,000 Chinese investors. However, a week later, a Chinese financial official announced on Chinese television that the ICO ban was only temporary until ICO policies were put in place. Investing in projects through ICO is quite risky, read the article "Reasons why investors lose money in the cryptocurrency market" to gain more experience in limiting losses in the cryptocurrency market.
Other jurisdictions, such as Canada and the Isle of Man, are regulating ICOs rather than banning it.
summary
At this point, hopefully you have understood the concept of ICO? History of ICO formation, advantages and disadvantages of ICO.
