The world of finance has been going through big changes recently. One of the biggest changes in the past couple of years has been the introduction of Initial Coin Offerings. But not surprise that one of the most popular questions has been ‘what is an ICO?’
So, let’s get started!!
What is an ICO? The concept of an ICO
ICO is the abbreviation of Initial Coin Offering. It means that someone offers investors some units of a new cryptocurrency in exchange against cryptocurrencies like Bitcoin or Ethereum.The pre-created token can be easily sold and traded on all cryptocurrency exchanges if there is demand.
With the success of Ethereum ICO are more and more used to fund the development of a crypto project by releasing token. With this reason, ICO has become a tool that could revolutionize not just currency but the whole financial system.
How does ICO work? How to use ICO?
The ICO start process by establishing the blockchain and set up of protocols and rules, in which point an ICO data is announced. For the creator, the next step is to begin for coins that will sold during the ICO, by social media sites, and a number of cryptocurrency related website used as a marketing method to attract investors ahead of the ICO data.
ICOs can be found through various sites, with the purchase of cryptocurrencies being made through the selected exchange. Documentation requirements vary depending upon the investor domicile, with the requirements outlined.
Steps of an ICO and timing
CONCEPTUALIZATION: It usually lasts 3 months. In this part, it is necessary to create all the necessary documentation about the ICO, to organize and know what can be done and when to make a purchase.
PRE-ICO: It usually lasts 4 months. In this phase is where you must generate the necessary noise to succeed, it is a phase that is private. And the bounty is about 70%.
PRE-SALE: It usually lasts 2 months. In this phase, it is where the necessary noise must be generated to be successful, and this phase is already public. The percentage of the reward decreases as the weeks progress, until the phase ends.
ICO: Usually lasts 3 months. It is the time when everything is finished and it is time to start raising money.