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Things You Should Know About ICO

ICO or Initial Coin Offering is essentially a type of crowdfunding that emerges in an alternative financial system. This financing model has assisted many successful companies and projects. In 2015, it is estimated that over $34 billion was raised through ICO. It is a cryptocurrency variant of crowdfunding, which is also among the most efficient and easiest ways for aspiring business owners to fund their projects. An ICO takes places for a specific period of time and people are encouraged to purchase tokens. In any ICO, there is usually a specific funding limit or goal. It means that each token has pre-designated price that won’t change during the period of ICO. Also, the supply of token is fixed. Although the supply of token is static, it is still appropriate for dynamic funding goals. The token distributions can be adjusted based on the received funds. In this case, the price of the token can be made higher, depending on the amount of funds needed.

It is also possible to see ICO as an alternative form of initial public offering or IPO, with a crypto twist. One good advantage of ICO is that business owners don’t need to deal with any hoop to jump through and acquiring fund is easier to do. In a simpler term, ICO is a type of fundraising that allows companies to attract more investors who are looking to have a participation in the cryptocurrency business. There are concerns that ICO is just a shortcut to raise fund in a fast and easy way. Investors and business owners are able to bypass typical fundraising processes that are usually required by venture capitalists and banks. This can sound like a dicey proposition for many investors who seek to assure the safety of their funds. When choosing an ICO, it is important to make sure that the transactions don’t exempt typical security factors and the trading platforms itself is still based on specific regulatory frameworks designed to protect the integrity of the market and investors.

It is important to be aware of the usual fraud signals that can harm typical investors. It is important to know that there’s no such thing as guarantee when it comes to high investment returns. You shouldn’t immediately trust people who say that you can receive huge return on your investment. Another common sign of fraudulent investment scheme is unsolicited sales pitch. It means that you don’t know the sender and you didn’t ask for the information about the so-called investment opportunity.