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The article discusses the meaning and gives the importances of ICO under cryptocurrency. Then the involvement in ICO and lastly the advantages and disadvantages of the ICO.
ICO in Brief
The ICO is a cryptocurrency Company launches Initial coin offering to increase the funds. The interested investors who buy the coins have new crypto tokens also this provides the utility of the product by the company. It is the same as IPO initial Public Offering but ICO is for the software product.
To work with the ICO type investor should have the excellent knowledge of cryptocurrency and the basic understanding of wallets and exchanges. It took high research before investing.
Also this is very risky due to the fraud and the poor performance of the company. The ICO plays a very important role for the company as they raise their funds from the coins and do their businesses with that funds but the risk lies on the investors because it is not possible everytime the company performs good and well. The performance of the company put the investor into traboule.
Participation of ICO & its Working
When the crypto project need money organizers offers the coins to investors but before offering the structure of the coin is really important there are ways of structuring the coins :-
Static supply and static price:- under this the total token supply is fixed and they have preset price for coins and for all this company set the goals to achieve.
Static supply and Dynamic Price :- the supply is fixed but the price can be changed according to the need which means the per token price is determined according to the funds received by ICO.
Dynamic supply and static price:- this simply means the supply is according to the funds received.
Along with this the crypto project usually makes the pitchbook known as whitepaper. The organizers give full information of the project in the whitepaper for the ICO investors.
It is released as a campaign to encourage the investors and support them to invest in the project. Also the investors have other ways of payment like bitcoin and ethereum. For unsuccessful funds or funds received are less than expectation then the amount will be given back to the investors and the project will be declared as unsuccessful projects.
Anyone can launch the project with free technology and introduce their project for funding. Due to lack of regulations the scam and fraud is easy so if you are planning to buy the ICO then do a proper research and work on the project read all the details on whitepaper and then invest your money in any project. From 2019 the ICO project will decrease due to the new regulations that are made to prevent the risk, scam and fraud.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
