What is an ICO?
ICO (Initial Coin Offering) is a means through which funds are raised for a new cryptocurrency or crypto-token venture that is unregulated. When startups or budding entrepreneurs want to raise money for funding their business ideas, without going through the rigorous and regulated processes of raising initial capital offered by banks and venture capitalists, they use ICO’s. In an Initial Public Coin Offering campaign, a certain percentage of the cryptocurrency is sold to the early backers of the startup, in exchange for other cryptocurrencies like Bitcoin or legal tender.
The pioneers of a startup project or business idea have to include the following items on their whitepaper plan for raising funds through an ICO:
• The mission and vision of the startup
• The solutions the project will provide
• The amount of money required to finish the project
• The number of virtual tokens to be retained by the pioneers of the startup
• The type of money accepted in the project
• The duration the ICO is expected to run
During the period of the ICO, the supporters and enthusiasts of the startup’s idea will buy some of the cryptocurrencies with virtual currency. Hence, the coins that these supporters and enthusiasts buy are called tokens and are similar to the shares that investors buy during an Initial Public Offering (IPO) of a company that is selling its shares.
If the money raised through an ICO campaign, within the stipulated timeframe, meets the requirements of the project, then the money will be used to either initiate the startup or complete it. On the other hand, if the funds raised through an ICO campaign are not enough to finance the implementation of the project, then the ICO campaign will be deemed unsuccessful and the money is consequently returned to the backers.
Early investors in the ICO campaign buy the crypto-coins in the hope that the operation will be successful, and thus they can benefit from the relatively higher value of the crypto-coins if the campaign is deemed successful before the project is initiated.
Just like an IPO, a company’s stake is sold to fund the operations of the business during the ICO operation. However, ICO’s deal with supporters, (just as is the case with crowdfunding) who are interested in investing in a startup, while IPO’s deal with investors. But ICO’s are different from crowdfunding campaigns because the funds raised in crowdfunding are purely donations, while those raised in ICO’s are motivated by the perspective of getting returns on investment.
The future predictions of the Cryptocurrencies
Some of the notable past successful ICO campaigns include Ripple Labs, Neo, Ethereum, and Lisk. Today, Blockchain capital seems to be the most interesting because it’s a conventional investment company that funds companies in the virtual currency ecosystem such as Ripple, Ethcore, BitGo, BitFury, and BTCC, among others. You can also opt for Humaniq that brands itself as a wallet for the unbanked across the world.
The future for Ethereum community looks hot as it focuses on the start of Gnosis ICO like the anticipated Augur Gnosis. Stakes are quite high as it’s developed by the reputable Ethereum. Another eagerly awaited launch is the EtheEx, which is basically a decentralized cryptocurrency. Although it’s not as popular as the Gnosis, EtherEx intends to become a truly decentralized ecosystem on Ethereum. Akasha is another decentralized network on the Ethereum blockchain that is expected to launch an ICO.
USI Tech Coin – New Bitcoin Cryptocurrency ICO
The organization’s corporate team made the announcement of their new ICO, the USI Tech Coin, in October alongside many other different announcements, such as Global Bitcoin ATM project, the transformation of its website to focus on cryptocurrencies, the launch of a new Back-Office system and a new customer service team with a support system. The Tech Coin is only available to its Members at this time, so in order to buy yourself some sweet Tech Coin, you will have to create a free account on the USI Tech Website. Right now the current Price is at $0.50 per coin and this coin may very well go into the $200 in a few months time! The announcement gave investors critical information that they have been waiting for regarding the organization’s stand on the cryptocurrency market trends. USI-Tech is already a big organization from internal buys alone and is likely going to drive the price of Tech Coin up.
Not all ICO’s are worth your money because some platforms throw in heavy words like Blockchains and Smart Contracts to win your heart, without strategizing on how to use the important keywords and investing in the right talents to realize the goals of their respective projects. Pay very close attention; A viable ICO should have presented months ahead and gives the community of investors from all over the world credible predictions or platforms for participating in their endeavors.