How does an ICO work?

The rise in Digital currency and Cryptocurrency has changed the conventional financial and banking sectors. Initial Coin offerings come into the picture with the increase in cryptocurrency usage in the actual real world. ICO is basically a method of raising fundings for companies working on blockchain technology. Nowadays, all the technical sectors, mostly related to blockchain, rely on ICO to raise capital for their startups. A rapid increase is always observed in the adaptability of initial coin offerings when any new blockchain project like an App or any other technology using blockchain is out in the open market. Therefore, people supporting that particular project can invest their digital currency or Fiat money by buying its “token.”

You can also start your project and get funding through ICO, but first, you need to have some technical perspective to build your startup. For that, you need to check courses on the blockchain. You can either be an expert blockchain developer or Crypto auditor, or maybe both. There is no limit to knowledge. To know more about the Blockchain certifications and courses, do have a look at the Blockchain Council.

What is Initial Coin Offerings (ICO)?

Back then, in July 2013, Mastercoin held its first token sale called ICO. ICO termed as Initial Coin Offerings is also a type of Cryptocurrency used to initiate the fundings for the blockchain projects. In addition, it is utilized to increase the service and product functioning as investors will invest in the project. So, Basically, it is like an IPO in the share market. However, the functionality of ICO’s is quite different from IPO.

Using their cryptocurrency like Bitcoin, Etherium, Binance coin, etc., an investor can buy an ICO token that will provide service and gain to them once the project is live. ICO is a means of crowdfunding that the Token issuing company performs to raising the capital for their project.

How Does an ICO Work?

ICO tokens are unique as they allow the open-source software projects a trading platform. As a result, investors can start funding blockchain projects. In contrast, it is not feasible to invest traditionally if you are keen to learn the concepts and working behind ICOcheck ICO’s working.

To begin with, one must have a basic knowledge of the ICO process, which includes information regarding technology, finance, and legal knowledge. The primary purpose of the ICO is to leveraging the decentralized platform of blockchain technology. To successful plot the ICOs, the following work has to be covered-

Identification of investment targets

When starting ICO, the company’s intention must be clear. They identify the target for running the campaigns. Also, they publish whitepapers for convincing investors. Relevant material about the company must be introduced for opening an ICO.

Creation of tokens

Now, as initial coin offering works on tokens, it is required to create tokens. For every company, the tokens will be different, and this is because they are represented as assets in blockchain technology. In addition, the token is genuinely different from Cruprocurrency as they are fungible and tradable.

For creating a token, a specified blockchain platform is required. For instance, Etherium provided a platform for the creation of ICO tokens.

Promotion campaign

While token creation is in process companies, run online campaigns to reach the maximum audience, resulting in getting pronounced investors for the company.

Initial Offerings

Lastly, they offer the token to the investors through proper rounding. Then with the finding company can reach the stage for launching the ICO and process further for the opening of the product. Investors can only hope to get benefit out of it if the technology and the projects get hit. Then you know, it’s a win-win game!

Final Thoughts

As discussed above, ICO is taking the place of IPO, as technology is overtaking every sector. Nevertheless, it is essential to know all the exact scenario of the blockchain platform and the cryptocurrency before taking you money out there. Know all the woking behind These technologically driven currencies by getting certification in the blockchain. Now you can create a token, but you must aim for the role of Crypto Auditor. Get extensive technical Blockchain courses online at Blockchain council for understanding these concepts better.




Hey, This is Pallav Raj an independentTechnology writer by Passion. Worked at Microsoft, Puma, Nike as a Copywriter and Content manager.

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Hey, This is Pallav Raj an independentTechnology writer by Passion. Worked at Microsoft, Puma, Nike as a Copywriter and Content manager.

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