You have found yourself here by way of a wave, and you likely have some serious questions about who or what an ICO is, why everyone is losing sleep diving into blog and Twitter posts, and how to get on a rocket to the moon.
Let’s start off by clearing the muddy waters. ICO stands for Initial Coin Offering. Stripped of the bells and whistles, an ICO is a method of raising funds for a project. These funds can be in a fiat currency, but are typically raised in Bitcoin.
So how do I get on a moon launch?
Not so fast. It would be irresponsible of me to let you go out there throwing yourself [your money] at ICO’s armed only with a base definition.
Like it sounds, an ICO offers coins or ‘tokens’ in exchange for financial backing, be it fiat currency or other cryptocurrenies to fund their proposed project. This allows circumventing the rigorous and regulated process surrounding startups and other venture capital activities.
When it comes to ICO’s it is important to note that not all are created equal.
The cryptocurrency space has some dodgy movers When I say ‘proposed project’ this literally means the project may exist only in terms of its whitepaper or concept. This makes it VITAL to pay close attention to who is behind the ICO, & what stage of development it is at current. Research into the individuals working on the project as well as who they have chosen to advise them throughout the process is key!
- If someone’s name is attached to a project:
- Are they actually backing it?
- Have they spoken about it?
- Is it just their picture posted with a speculative phrase?
Beyond that an assessment of the ICO’s practicality should be done as this is an unregulated market. And we all know how some folks love to disappear with other people’s money.
This is not to say that some amazing projects don’t exist. One of the first and most successful of these to date is the Ethereum project. Yes, Ethereum began by selling a portion of its total tokens to those interested in supporting the project. This worked in an almost crowd funding like manner, the only difference is those who donated expected to see returns by way of increased value of received tokens.
Clearly those who early on saw value in what the Ethereum network might become have benefited tremendously. This has since brought on a slew of new projects as people race to take new ideas to the moon, and millions like yourself hoping to catch a ride on one!