Have you ever wondered what exactly the Initial Coin Offering is? What is the reason for its popularity in the digital world among blockchain enthusiasts? One of the main reasons ICO is very popular is that it represents a specific capital-raising activity in the blockchain and cryptocurrency environment.
It’s somehow the equivalent of the IPO, an Initial public offering that is using cryptocurrencies. When speaking of ICOs, it’s essential to mention the ICO calendar and explain its primary purpose.
The ICO calendar – to stay on top of the newest digital currencies.
The famous ICO calendar helps traders to stay on top of the newest digital currencies. In other words, it’s there to ease traders to maximize their profits and stay ahead of the curve. It’s great to know that the most critical coin growths are happening right after the Initial Coin Offering completes and launches.
Therefore, people who possess these particular coins have a chance to earn a lot of profit overnight. If anyone wishes to stay on top of the latest trends, he must follow ICO calendars daily.
Once we’ve made this clear, let’s see the types of initial coin offerings.
Different types of the Initial coin offerings
It’s essential to note that there are two main types of Initial coin offerings:
- The public IPO
- The private ICO
When we speak of the public initial coin offerings or the IPO, we refer to the specific form of crowdfunding that targets the public in general. On the other hand, the private coin offering is available only to a limited number of investors who can participate in this process.
Generally speaking, only the accredited investors that include high net worth individuals and financial institutions are eligible to participate in private initial coin offerings.
Now, let’s get straight to the points and explain how Initial coin offering works.
Initial Coin Offering – how exactly does it work?
Imagine a situation where a cryptocurrency startup wishes to raise money through the Initial coin offering. In that case, it will usually create a whitepaper. This whitepaper will outline the reason and need for that project, including the amount of money required, virtual tokens founders will keep for themselves, and of course, the time of the ICO campaign.
While the ICO campaign is happening, supporters of the project will buy some of the tokens of that project with digital currency or fiat. Coins are referred to the buyers since it’s no secret that passes are similar to shares of a firm or a company sold to investors during an initial public offering.
If the raised money doesn’t fulfill the minimum requirement funs by the company, the money is more likely to return to the backers. Therefore, the initial coin offering will not be successful. On the other hand, if the requirements are met on time, the money would be used to pursue the goals of that specific project.
The bottom line
In conclusion, it’s important to remember that the Initial coin offerings aren’t so different from the stocks. However, they may have utility for a product offered or a software service. They are a fundraising method used by startups in the first place to deliver services or products within the blockchain and cryptocurrency industry.