What Is Initial Coin Offering ?

An Initial Coin Offering , also often known as ICO, is a crowdfunding centered around cryptocurrency in which new projects sell their crypto tokens in exchange for bitcoin. This is very similar to an Initial Public Offering (IPO) in which investors purchase shares of a company.

ICOs are a relatively new phenomenon but have quickly become a major topic of discussion within the blockchain community.

In ICO, the quantity of funded cryptocurrency is “return” to investors in the form of tokens. In this way, the investors have a “shares” in the startup. ICOs are often out of any jurisdiction and complex regulatory compliance and intermediaries, such as stock exchanges, banks and venture capitalists.

The first official ICO was held by Mastercoin In July 2013. The total funds raised were about 4740 BTC which resulted in the creation of about 563,162 MSC. Their vision is to “Accelerate innovation throughout the world by building a global value exchange platform in an decentralized, open, transparent way”.

One of the most famous ICOs is Etherium in the mid 2014. One ETH was 0.0005 BTC, or approximately 0.25$ at that time. So, for 100$ you got about 400 ETH. You can calculate the value today.  They became more popular in the 2017 at about 50 ICOs per month. Yes, that is very big number.

We can see that ICOs are everywhere. Every day we see new ICOs. Some of them have great projects. However, we have to be very careful, because scammers can use this to scam you and steal your money. So, you have to be very careful and read all the whitepapers, see the team behind the project before you invest your money.

Are ICOs Legal?

Well, we have to say that they are not illegal. They are in gray zone. However, maybe ICOs were not regulated in the past, but now many countries are discussing about regulating this matter.