What is Initial Coin Offering (ICO)? FAQs, advantages and disadvantages

Even now that the dust surrounding it has settled a bit and initial coin offering (ICO) funding has become part of our daily lexicon, digital crowdfunding is still something to scare most businesses, especially those with particular niches that have nothing to do with the exciting world of cryptocurrency exchanges and blockchain.

This raises a fairly justified question: why? ICOs have proven their worth time and time again, and there seems to be a general consensus that initial coin offerings carry about the same level of investment risk as venture capital. Investors are constantly keeping an eye on the ICO space for the next big opportunity that comes closest to the top performing ICOs.

What is an ICO?

The Initial Coin Offering (ICO) is a fundraising feature similar to an Initial Public Offering (IPO) where companies sell shares to raise funds. The only difference is that in the case of ICOs, the company sells digital tokens which gain real value once the project is launched.

So why the skepticism? Why are companies so reluctant to dive into the waters of ICOs, despite the long list of benefits they offer, like the chance to build an audience before launching a product or receive valuable user instructions when created?

We will discuss whether the current reputation surrounding initial coin offerings is well justified and whether companies reluctant to invest or launch an ICO should reconsider. In addition, we will try to answer a rather convoluted question: are we currently at the end of fundraising via ICOs, or is this only the beginning of a buoyant market?

ICO FAQs

Before we can determine whether ICOs have a sustainable future and whether businesses should rely on them, we first need to make sure we are on the same page about initial coin offerings. With that goal in mind, let's cover the most frequently asked questions about ICOs and cryptocurrencies:

What is ICO and how does it work? ICOs are a form of cryptocurrency used by businesses to raise capital. It is a means of crowdfunding by creating and selling a digital token. Through ICO trading, investors receive unique cryptocurrency “tokens” in exchange for their monetary investment in the business. What is ICO funding? ICO funding is a method of raising funds through an initial coin offering, which is digital crowdfunding that, instead of fiat currency, raises Bitcoin or Ethereum. What is ICO marketing? ICO marketing is a service provided mainly by digital marketing agencies that aim to develop a strategy for promoting an ICO-based project and raising funds. What is a Bitcoin Token? Cryptocurrency is the superset, while altcoins and crypto tokens are its two subcategories. A bitcoin is nothing but a crypto token because technically all crypto assets can also be described as tokens. What is an ICO token? An ICO token is what you receive when you invest in an ICO - a cryptocurrency that has no present value but will be worth something in the project's system once launched - if the ICO turns out to be a success, that is. What is ICO Cryptography? A crypto ICO is the currency that should have value once the project leaves its pre-launch phase. Until this time, the crypto ICO exists in the form of a token. What is ICO investment? An ICO investment is what startups use to bypass the rigorous and strictly regulated capital raising process required by venture capitalists or banks. What is the Ethereum network? Ethereum is a decentralized blockchain platform that establishes a peer-to-peer network capable of securely executing and verifying application code. These application codes are called smart contracts, which allow participants to transact without a central authority. Transaction records can be verified and distributed securely over the network. It gives participants full ownership and visibility over transaction data. What is the ICO market? The ICO market is the current state of affairs in the ICO field, which carries its standards, prices and rules. What is the difference between...