ICO – Initial Coin Offering

ICO – Initial Coin Offering – digital crowdfunding. The digitisation and democratisation of banking is constantly evolving. There are some terms that keep falling in connection with bitcoins. One of them is the Initial Coin Offering or ICO.

Let’s be clear: What is an Initial Coin Offering (ICO)?
Are ICO’s the same as IPO’s with shares?
How does an ICO work?
Opportunities with an ICO
Risks of an ICO
What things should you be aware of before investing in an ICO?
How to participate in an Initial Coin Offering?
ICO History
Connoisseurs of the American stock exchange immediately notice the conceptual similarity with IPO, the Initial Public Offering, i.e. the American term for an IPO. But the exciting question remains: What are ICO?
Are they related to the American stock exchange? How do I as a user have to imagine the overall interrelationships?

Let’s be clear: What is an Initial Coin Offering (ICO)?

To put it straight: ICO has no connection with the American stock exchange. To make this clear, many of the initial coin offerings are increasingly referred to as token sales. On the one hand, this calms the stock exchange supervisory authority and, on the other hand, creates clarity for the user. However, there remains a similarity between an ICO and an IPO. An ICO is an opportunity to become part of a company operating in the field of digital currencies through an investment. An initial coin offering is a kind of crowdfunding, but in a hermetically sealed digital world. The companies are basically always working on the further development of digital currencies and their environment, such as the development of smart contracts. The investment supports this development and gives the company the opportunity to advance its research. Critics of the Initial Coin Offering complain that it is not quite clear what exactly the investors would legally acquire. This is clearly defined for common investments, such as an IPO. The ICOs lack such a definition. However, such a definition is difficult to maintain with regard to the investment object. To protect oneself from lawsuits, the legal definition of companies that work with ICOs is: from a legal point of view, nothing is acquired.
What is an ICO?

This is a very similar concept to an initial public offering. The term is often used in connection with token sales and is a form of crowdfunding. Both terms refer to a financing option that gives investors access to a future feature of the financed project; however, the project will not start until the future. ICO Initial Coin offering – Definition Wikipedia

Are ICO’s the same as IPO’s with shares?

This point is the decisive difference between an ICO and an IPO. An IPO clearly defines what the investor acquires and what rights he has. An ICO remains spongy in this area. It is an investment in an industry that is still too early to say clearly what it will bring. For the investor, a token sale is basically a kind of digital token.
These are made more attractive by the current development within the crypto currencies and the hopes associated with these developments. Bitcoin are called Blockchain 1.0, the further development Ethereum as Blockchain 2.0 and currently there is speculation for a revised version, which makes the ICO even more attractive. In it the experiences made from the other blockchain should have been used and some of the usual problems, like the vulnerability and the speed of the processing, should have been eliminated. These are all steps towards a blockchain that opens up further possibilities.
However, the majority of ICOs are concerned with developments within the existing block chain. They often build on the Ethereum blockchain and are called Dapps. The goals of the companies can be very different, such as the development of an Internet browser based on the block chain called Brave and its ICO Basic Attention Token. In summary, an ICO is therefore an investment based on a belief in a digital future without a clearly calculable outcome.