In some crypto articles, there is the word Initial Coin Offering (ICO). It sounds like sharing a similar concept like Initial Public Offering (IPO) but actually not.
An ICO in the crypto sector is actually an activity or a way to raise funds for a project developed by a party.
It was first introduced in 2014 when funds were needed for the growth of the Ethereum network. Since then, many cryptocurrencies have tried their luck with ICOs.
Not only practiced among new crypto firms but also long-established companies also run ICOs to attract more investors and increase capital for new blockchain-based products.
ICOs are usually run by technology firms that want to issue and distribute tokens. However, the ICO will fail if the funds raised do not reach the set amount and time. While the funds that were successfully raised will be used for project development.
ICOs also have risks. If crypto investors are interested in joining an ICO, a few things to consider:
Does the project require a blockchain / token, or can it proceed without any of it?
Does the project team have a high reputation? What skills do they have to make the project a success?
Investors need to know, it is very inappropriate to invest more than they can afford. Keep in mind that the crypto currency market is very high with uncertainty, so it is not impossible if you are also at risk of facing huge losses.
