A person always thinks about the future. To live and enjoy in present are hypothetical words. Everyone plans and dreams of their safe, secure, and luxurious future. So, to imply that people do investment. they invest in banks, properties, gold, business, and sometimes also in cryptocurrency. There are so many forms of investments but a wise person is one who chooses where to invest money correctly to get maximum profit. In cryptocurrency there exist a method by which people can raise fund. It is known as “initial coin offering”. It is also abbreviated as ICO and is equivalent to IPO, initial public offering.
Investment and funding in cryptocurrency
As we all know that cryptocurrency is a form of digital asset and works as a medium of exchange. Each individual has ownership of his currency and the records of transactions are stored digitally in a computerized database. There are numerous people worldwide who are ready to invest in cryptocurrency like bitcoin, Litecoin, etc. investment in cryptocurrency can be good and also risky at the same time as the market is highly volatile. On the other hand, the cryptocurrency agencies also raise funds. They can fund individual projects. A large sum of money is raised and is known as “initial coin offering”. It is a type of funding where cryptocurrency is used by private ICO’s and sold them in the form of token to investors in exchange for legal tender.
How ICO works
There exists a cryptocurrency startup that can raise money through ICO’s. a whitepaper is created outlining what the project is about, needs of a project, and time for the completion. Then a budget is prepared to state how much money is required and how many types of virtual tokens the investor will keep? During the campaign, the supporters and invertors decide what amount of token will be bought as a digital currency. In any case, if the fund raised is not enough for meeting the minimum requirement of the company then the money is returned to backers and ICO is declared as unsuccessful. And if the requirement is met then the money can be used to pursue the goals.
It can be concluded that as the size of “initial coin offering” increases, the sum raised by large projects also get bigger. On the evaluation of ICO’s both the amount of money raised and returned on investment is included. Some famous examples of ICO’s can be Ethereum’s ICO in 2014 and two-phase ICO in 2015. The largest of all ICO is is file coin and is a decentralized cloud project. About $257 million is raised for file coin.
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