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All you have to know about the Initial Coin Offering

There is almost no tech enthusiast in the world who has not invested or wanted to invest in cryptocurrencies. Since the inception of cryptos, the cryptocurrency market has been flourishing and is attracting a growing number of interested people.

What’s been in the spotlight lately and attracts individuals to find out what it’s all about is Initial Coin Offering, better known by its acronym “ICO”. Regardless of whether you are meeting the term ICO for the first time or know what it is about, you will find out all the essential information about it and explanations in the following text.

So, let’s begin with the basic ICO definition, shall we?

ICO definition and explanation 

ICO is an abbreviation for Initial Coin Offering, a form of capital-raising activity in the blockchain and cryptocurrency environment. It’s easiest to consider them as an Initial Public Offering, or IPO, that uses cryptocurrencies in general. 

There’s little to not-at-all government regulation of Initial Coin Offerings to this day. Thus, anyone in the world can launch their own ICO, provided they get the technology established well.ICO is an abbreviation for Initial Coin Offering, a form of capital-raising activity in the blockchain and cryptocurrency environment.

It’s essential to understand that there are two different types of Initial Coin Offerings:

  1. Private ICO means where a limited number of investors can participate in the process. In general, only accredited investors, such as high-net-worth individuals and financial institutions, can participate in private ICOs and set a minimum investment amount.
  2. Public ICO represents a form of crowdfunding that’s open to the public in general, meaning that anyone can become an investor. However, it’s known for ICOs to be a more risky and viable option than IPOs due to regulatory concerns. 

ICO vs. IPO – what’s essential to know

Comparing ICO vs. IPO is very common nowadays. The majority of crypto enthusiasts are eager to find out the main differences between these two. First of all, it’s essential to comprehend that startup companies primarily use an ICO in order to raise capital. 

Initial Coin Offerings are known to be removing intermediaries from the capital-raising process. They also create direct connections between all the company investors, and the interests of both parties are aligned. On the other hand, Initial Public Offering represents a process of offering shares of a private corporation to the general public in new stock issuance. 

However, what happens to be the main difference between ICOs and IPOs is that investing in an initial coin offering doesn’t guarantee you an ownership stake in the crypto project. It means that all the participants of the Initial Coin Offering are gambling that a currently worthless currency will increase in value over time. 

Regulations of the Initial Coin Offering

It’s evident that ICOs represent a whole new phenomenon in both the technology and finance industries. Ever since Initial Coin Offerings appeared in the market, we’ve witnessed them significantly impact capital-raising processes. 

What’s been in the spotlight lately and attracts individuals to find out what it’s all about is Initial Coin Offering, better known by its acronym “ICO”. Regardless of whether you are meeting the term ICO for the first time or know what it is about, you will find out all the essential information about it and explanations in the following text.

Nonetheless, the regulatory authorities worldwide haven’t seemed to be prepared for this new type of fundraising in the financial sector. There are entirely different approaches to the regulation of ICOs across the world. 

For instance, South Korea and China prohibit ICos, while the USA, Canada and numerous European countries are heavily working on developing regulations to govern the conduct of Initial Coin Offerings.The majority of crypto enthusiasts are eager to find out the main differences between these two. First of all, it’s essential to comprehend that startup companies primarily use an ICO in order to raise capital. 

In the meantime, Australia, New Zealand, Hong Kong, UAE, and some other countries have already published guidelines governing ICOs. 

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