Online businesses have experienced significant expansion and popularity as technology has advanced in the last few years. Investing in cryptocurrencies and dealing with virtual money, in general, has started to attract more and more public attention.
For that reason, it is not surprising at all why many people became interested in something like ICO – i.e. Initial Coin Offering. Whether you’ve just entered the ICO industry or you already have some experience, and you have not met this term so far, it is time to learn all the essences of this to provide yourself with another source of income.
So let’s find out more about that famous Initial Coin Offering, shall we?
What is Initial Coin Offering exactly?
Initial Coin Offering represents the crypto industry’s equivalent to an IPO, the Initial Public Offering. For example, if a particular company or corporation is looking to raise money to develop a new application, service, or a coin, launching an Initial Coin Offering is the best way to raise these funds.
ICO is the acronym of the Initial Coin Offering. Investors who are heavily interested in ICOs are able to buy them and receive a new crypto token that the company has issued. That particular token can have some utility that correlates with the service or product the company is offering. It can also represent a stake in the project or a company.
The ICO calendar refers to a handy tool that helps people stay on top of the newest digital currencies. With this particular calendar, anyone is able to stay ahead of the curve and increase their profits to unimaginable heights.
How do the ICOs work?
Now that you’ve familiarized yourself with the term “Initial Coin Offering”, it’s crucial to understand how they work. Once a crypto project is eager to raise money through ICO, those behind it need to determine how they’ll structure it. In other words, ICOs can be structured in a couple of different ways, such as:
- Static supply and dynamic price- The number of funds received in the ICO will determine the overall cost per single token.
- Static supply and fixed price – Each token sold in ICO has a current price. The total token supply is fixed since a company has set a particular funding limit or goal.
- Dynamic supply and a price that’s static: Some Initial Coin Offerings include an active token supply but the fixed price. It means that the amount of funding received determines the supply itself.
Two main ICO types you should be familiar with
There are two types of Initial Coin Offerings. The first one is Public, and the second one is Private ICO. As their name suggests, they’re open to everyone when it comes to Public ICOs. Developers use a crowdfunding method to launch new crypto projects and coins.
On the other hand, Private ICOs are the opposite of Public ones. They are only available to select members of investors of a specific community. Private ICOs target particular groups and individuals with considerable amounts of money. Generally, private ICOs are regarded as more secure than public ones since there’s always some eliminating factor.