ICO (Initial Coin Offering)

ICO, or Initial Coin Offering, is an unregulated means of crowdfunding for cryptocurrency projects through the issuance of tokens.

An ICO is when a new cryptocurrency project sells a set amount of its digital currency in exchange for legal tender (fiat currency) or other cryptocurrency. This is done to raise capital to fund the team’s operations and development of the project. It is similar to an initial public offering (IPO) on the stock market but in the world of cryptocurrency.

Unlike an IPO, ICOs do not require the company to follow extensive disclosure standards as regulations for them are much more relaxed. This allows for anyone to invest on an ICO without proper disclosure and limited due diligence. It is important for investors to still research the project thoroughly as it is possible to still experience fraudulent activity.

The digital currency in question is called a ‘token’. These tokens, depending on the project’s type, may have utility and offer several advantages for its users (e.g. discounts, in-app rewards, etc.). Investments into these tokens can be made either through cryptocurrencies or fiat currencies. Investors receive a portion of the project’s tokens following the completion of the ICO.

A new cryptocurrency project is releasing an ICO for their digital currency called EcoCoin. The property will be used to enable micro-transactions and inter-country payments. Investors will be able to exchange cryptocurrency or fiat currency in order to purchase EcoCoin tokens.

The token’s utility will allow for users to use EcoCoin for discounted services and rewards within the platform. Moreover, within the country, EcoCoin will offer low fee payments. Following the completion of the ICO, investors will receive their respective portion of the project’s tokens. They can then store and use the tokens within the platform or exchange them among other cryptocurrencies.