ICO
Technology

Why ICO is Hotter than Jennifer Lawrence?8 min read

 

 

Ever heard about the ICO? What is this and how it really works? Why there are so many of you interested in it? Why the ICO coin’s going viral since its arrival in the market? These coins are getting unwanted huge attention from the investors like you? If I’m not wrong, then you must knew about what I’m about to tell you. And if not then you’ve landed in a right place. The wait is over and right now I’m going to usher you about the ICO(Initial Coin Offering)

The day when I encountered first with the ICOs is the day when I started to learn about the bitcoin thing somewhere  in the last year, 2017. These coins are released in a bulk to attract an investor to configure out the rules and regulations and invest a bundle of money on it. Don’t know how? Let me drive you to the exact figure of ICOs.


ICO meaning Initial Coin Offering or Initial Currency Offering is a source of crowdfunding cryptocurrency for their project in a pre-defined timeframe. In simple words, like project or some company XYX wanted to jump inside the market so they used a cryptocurrency to build the link offering an ICO that means a token whose value is say, $5. So if you wanted to have some token with you. You have to pay for it in lieu of a token (1token = $5{say}). For example, If you paid say, $150 and you get a 250 free token whose value you can estimate. The choice is up to you that you wanna hold it or release it and have some good amount of money with you. These are sometimes also known as “Token Sales”.

These tokens are exchanged via Ethereum or bitcoin mainly. The Most common is the Ethereum which uses ERC20 Ethereum based standard wallet to store tokens safely.

Important Terminology:

White Paper: A kind of informational document set for the investors including business rules and regulations, laws, tokens, platform, project. It helps convey the business ideas, plans or anything related to the XYX(say) company.

ERC20: A standard set of rules that is based on Ethereum based tokens. Mostly ICOs are based on ERC20 compliant.

Ether: A cryptocurrency known as Ethereum based on blockchain technology.

ACCREDITED INVESTOR: According to US Securities and Exchange Commission, anyone with an income has or exceed $200,000 or $300,000 (or together with a spouse) in each prior of 2 years OR has a net worth of $1millon either single handedly or including spouse(excluding the primary residency)

WALLET: It is a place to store your cryptocurrency either in a software(designed for online mode) or physically in a hardware(especially designed for storing crypto).

51% Attack: When more than half of hashing power is carried by a person or entity.

ALT coin: Generally refers to those other than bitocoin and ethereum. Others are called alt coins meaning alternative coins.

AIR DROP: Early stage project managers send some tokens randomly to public blockchain wallet address on meeting certain criteria.

AMl: Anti-Money Laundering helps regulate the rules and regulations in order – to send the criminals behind the bars who uses illicit money;  requires an institution to detect, protect and send the details of the malicious activities in detail.

CODE: Centrally Organized Distributed Entity; a legal organizations that is built in Switzerland to incorporate token sales.

COIN: Another term for coin is token

COIN MIXING(COIN TUMBLING): Usually done to avoid forensic check and send the coins to other wallet addresses to not to get caught by these communities.

BLOCKCHAIN: A distributed decentralized system that allows you to exchange peer-to-peer transactions without the involvement of a third party(like a government agency, authority, system)

DAO: Digital Autonomous Organization, which was hacked and lost $50million in cryptocurrency and gave us new cryptocurrency, Ethereum.

HASH: An algorithm or function that converts data into any fixed length; it generally helps write a new code for the fresh new transactions.

Liquidity: The opportunity to buy/sell once the token has been listed on exchange.


FIAT CURRENCY: A currency(paper or coin such as INR) used and circulated in the country with legal jurisdiction or government of issuance.

FUD: Fear, uncertainty and doubt.

How ICO(Initial Coin Offering) works?

Many startups are up on the sea to sail their business to the buyers. They do so by serving an Initial Coin Offering, attracting a lot of investors to their house of generating a revenue to uplift their company initially.

For the creator, they use various online platform that uses a variety of exchanges for different cryotocurrencies. The rising number of cryptocurrency investors leading to the rising number of exchange websites. This not only attracts a lot on investors but also makes the ICOs demand and price up.

Now the creator has to join the currency exchange websites to sell their so called tokens online. So they join to online websites and at the same time, the investor(user) also has to sign up to the similar websites to make a buy.

Now active and other events can be checked out via their official site to when and how they can be bought. Most popular ones are poloniex, bittrrex, livecoin and a lot more.

Be ready with the documentation cause that’s what defines your real ownership. Documents like your National id card, etc are required during registration. The document may vary from site to site.

What are the benefits of ICOs?

 

 

 

 

 

 

 

Transparency of the transactions that are made during ICO exchanges that can be used to verify the funds being spent.

●The early buyer of the ICO coins have an enlarged opportunity to buy/sell coins.

●Early access to the token that has a chance of growth

●An innovative way to deploy capital and in return you’ll get a huge benefit with time.

●The return of the capital invested will be 1000% higher than the actual investment.

An alternative to Fiat currency

●A high risk and a high return.

What are the RISKS of ICOs?

The growing crypto finance industries provides investors a lot of intriguing opportunities. So they can make a most out of it. But still there are investors who doubt about the new trading model – ICOs. So for them, they have to go through the community’s white paper to check out all the terms and condition of the token and their terms of use. The company will provide a complete list of guidance to make sure you’ll not get puzzled inside. So here are some of major risks that you may encounter with:

Frauds and Cyber Attack: The investors should keep in mind that where there is a good point lies a poltergeist. They’ll try to hack your wallet which is quite a difficult task for them as the crypto wallet are difficult to attack on because of high level security. Cyber criminals will surely find a way to steal all your tokens or crypto balance.

The most common attacks are phishing scams where an attacker will create a site similar to your wallet’s site and send it to your e-mail. And it looks similar to what your wallet site and when you enter your confidentials, your account will be in control of the hacker. And you’ll lost all your virtual currency. Since many attackers have access to all the tools and operate from outside US so they are not traced easily.

Finance: Again the investors should be ready to face the financial loss if they didn’t step ahead without having cognizance of that particular ICO. There are a lot of bogus ICOs who will ensure you a huge benefit as usual and if you don’t care of the offering, you’ll unfortunately lose your capital. So make sure that you check-list all your doubts and most importantly the White Paper and always go for the startup by investigating and unveil all the reports regarding that ICO. Only then make cogent business.

Business: While there’s chance of rise of ICO which provide a startup a boost but chances that the startup may collapse as most likely to happen. So keep a note with you that there’s equal risk factor. That’s why you should make report sheet of the ICO and consult those published by Strategic Coin –  prior  to investment.

Authority: The investors should take care of the authority as the Securities and Exchange Commission has not yet published a definitive rules and regulations about ICO tokens and investments. Later SEC doesn’t find compliance with any ICOs. Concluding which land on a safer place where accredited investors are investing having a legal White Paper and a syllogism reports of work.

You may also like to read:

1.Will Information Ever Rule the World

2.The Insider’s Guide to Bitcoin

3.How Internet Works? Who Owns the Internet?

4.Smartisan R1 | World’s 1st Mobiel Phone Which Comes With a 1TB of Storage | 2018


What are the futuristic view of ICOs?

You may have probably heard of ICOs that boomed the coin market cap with a billion dollar raise. The idea is to have a mechanic similar to ipo that uses blockchain that means a transparency to the investor and a peer-to-peer network, allowing crowdfunding and later a fund management (smart contract on Ethereum network, a second network after bitcoin). But due to lack of knowledge and poorly written White Paper the chances are high for misuse of crowdfunding.

Almost all the ICOs offers a complete set of manual to be used by the user and hardly there’s anything not publicized. That’s what the government or authority will not allow and may indulge in these activities. That’s how the China and South Korea has suffered from.

So make sure you invest that much which you could afford to lose that amount. Even after the loss that may not influence you and your capital. And use your wit and work diligently to have a lot more out of it.

 

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He is a passionate writer or you can say a blogger. He loves to share his views, opinions, knowledge about technological gadgets, products, etc. He has a keen interest in reading fictious, adventurous, thrilling, biographical books.