If a cryptocurrency opstart runs, regardless of the offered offer (ICO), one white paper plan can be made that will be designed over the garage, as this project will be done free of charge.
2. An unregulated means by which funds are
raised for a new cryptocurrency venture. An
Initial Coin Offering (ICO) is used by
startups to bypass the rigorous and
regulated capital-raising process required by
venture capitalists or banks.
3. In an ICO campaign, a percentage of the
cryptocurrency is sold to early backers of
the project in exchange for legal tender or
other cryptocurrencies, but usually for
Bitcoin.
4. When a cryptocurrency startup firm wants to raise money through an Initial
Coin Offering (ICO), it usually creates a plan on a whitepaper which states
what the project is about, what need(s) the project will fulfill upon completion,
how much money is needed to undertake the venture, how much of the virtual
tokens the pioneers of the project will keep for themselves, what type of
money is accepted, and how long the ICO campaign will run for.
5.
6. During the ICO campaign, enthusiasts and
supporters of the firm’s initiative buy some of
the distributed crypto coins with fiat or virtual
currency. These coins are referred to as tokens
and are similar to shares of a company sold to
investors in an Initial Public Offering (IPO)
transaction.
7. If the money raised does not meet the
minimum funds required by the firm, the
money is returned to the backers and the
ICO is deemed to be unsuccessful. If the
funds requirements are met within the
specified timeframe, the money raised is
used to either initiate the new scheme or to
complete it.
8. Early investors in the operation are usually motivated to buy the crypto coins in the hope that
the plan becomes successful after it launches which could translate to a higher crypto coin
value than what they purchased it for before the project was initiated.
9. An example of a successful ICO project that was profitable to early investors is the
smart contracts platform called Ethereum which has Ethers as its coin tokens.
10.
11. In 2014, the Ethereum project was
announced and its ICO raised $18
million in Bitcoins or $0.40 per Ether.
The project went live in 2015 and in
2016 had an ether value that went up as
high as $14 with a market capitalization
of over $1 billion.
12.
13. ICOs are similar to IPOs and
crowdfunding. Like IPOs, a stake of the
startup or company is sold to raise money
for the entity’s operations during an ICO
operation. However, while IPOs deal with
investors, ICOs deal with supporters that
are keen to invest in a new project much
like a crowdfunding event.
14. But ICOs differ from crowdfunding in that the backers of the former are
motivated by a prospective return in their investments, while the funds raised
in the latter campaign are basically donations. For these reasons, ICOs are
referred to as crowd sales.
