Understand the basic concepts of ICO (initial coins offers) and tokens sales
The world of cryptocurrency has seen rapid growth in recent years, with millions of people around the world investing in new coins and tokens. Among these investments is the initial currency offer (ICO), a platform used to raise funds for cryptocurrency projects by issuing unique digital tokens to investors in exchange for their investment.
In this article, we will deepen the basic concepts of ICO and tokens sales, explaining what they are, how they work and the benefits and risks associated with the investment in them. We will also provide an overview of cryptocurrencies and popular tokens used in ICO, as well as a guide to find and evaluate legitimate ICO projects.
What is an initial (ICO) currency offer?
An initial currency offer is an process in which a company or individual issues a new digital currency, known as Token, to investors in exchange for their investment. The Token represents the property of the project and can be used to facilitate transactions in the Blockchain network. ICOs were first introduced in 2014 by Bitcoin, and since then, they have become increasingly popular among cryptocurrency enthusiasts.
The process generally implies the following steps:
- Project announcement : An new cryptocurrency or token is announced, often with clear vision and mission.
- Tokens creation : The project creates a unique digital token that represents the property of the project.
- SALE OF ICO : Investors can buy tokens at an initial price, which can be significantly lower than its market value.
- Tokens distribution : Tokens are distributed among investors in proportion to their investment size.
How do ICO work?
Here is a breakdown step by step of the ICO process:
- Preview : potential investors can buy tokens at an early stage, often with a higher price.
- Sales period : Investors can participate in the sales phase, where they can offer for their favorite token.
- Tokens list : The Token appears in cryptocurrency exchanges and wallets.
- Distribution : Tokens are distributed among investors according to their investment size.
Benefits of investing in ICO
- Potential for high yields
: Some ICO projects have been significantly worth it, with some tokens increasing in hundreds or even thousands of percentage.
- Early motor advantage : Investors participating early can benefit from the success of the project and obtain a part of the profits.
- Unique investment opportunity : Investing in an ICO offers a unique opportunity to have a piece of a new and innovative cryptocurrency or token.
Risks associated with investment in ICO
- High risk : Many ICO projects have failed, resulting in significant losses for investors.
- Lack of transparency : Some ICO may lack clear information about the project development team, the business model or the financial situation.
- Security risks : Investing in digital tokens entails safety risks, such as piracy and phishing attacks.
Cryptocurrencies and popular chips
- Bitcoin (BTC) : The first and well -known cryptocurrency.
- Ethereum (ETH) : A decentralized platform to build intelligent contracts and decentralized applications (DAPPS).
- Litecoin (LTC) : A payment system equal to the same as uses the Ethereum block chain.
- Monero (XMR) : A private and safe cryptocurrency known for its advanced encryption techniques.
How to find and evaluate legitimate ICO projects
- Research : Conduct an exhaustive investigation into the project, including your development team, business model and financial situation.
- Read the reviews : See the review websites and forums to have an idea of the reputation and community commitment of the project.
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