What Is An Initial Coin Offering?

What is an Initial Coin Offering? What is it for and how do I make use of it? How safe is it for someone to get involved in the process? These are the kind of questions that people are asking themselves all the time and we are going to try to explain all of this in the simplest way possible. The most important thing is to understand the basics as this gets progressively complex as you continue to dig into the subject. It can be complex, but the core of the concept is simple enough to give you an initial idea and grasp on the subject.


Initial Coin Offering

What is an ICO?


The acronym that stands for Initial Coin Offering, that is to say, the initial offer of a new crypto currency to the public. The acronym ICO is still on that is not known by the average person who is starting to learn about cryptocurrency, but in simple terms the ICO is a funding system that is used by blockchain companies to obtain funds and give value to the digital coins they use in their services or applications. The investors buy tokens and then they can be used to interact and use the application of the Blockchain company.

You could see this as something similar to the process of public sales, companies organize a pre ICO system. The ICO begins at a certain date, and it is made available for a certain period of time. Each ICO is going to have a maximum and a minimum number of tokens to sell. The minimum is the contribution necessary for the project to be viable, and the maximum is going to be when all the tokens available end up being sold.

The process of financing a cryptocurrency


The ICO is meant to finance a new cryptocurrency, this process was also used for other coins such as Bitcoin or Ethereum. We have already mentioned these coins in the past quite a few times. Virtual tokens are scarce, protected by cryptography, and this gives them extra value due to their scarcity and demand. These virtual coins serve the purpose of being used for payment or for savings and this makes them extremely desirable.

Final thoughts


Now that you have the basic knowledge on what ICO is, you should remember that all of the current popular coins out there started out with this process. This is important because it will determine the initial value of a coin and this is going to have a huge impact on the future of said coin. It’s important to go deeper into the subject if you want to be able to understand why the initial coin offering is such a valuable and important part of the process. 

One of the most common problems is that people hear so many mixed reviews about cryptocurrency and networks related to these digital coins that they start to become fearful of what could happen because of this. That is the reason why it’s so important for people to take the time to learn as much as they can so they won’t take a blind dive into this process