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Saturday, February 17, 2018

How Does ICO Work?

The boom in the cryptocurrencies market has led to the establishment of various coins by numerous companies. In one of my earlier posts, I talked about how to get free Bitcoin and other high paying cryptos without paying anybody, to get started click here

The latest and the most easiest way of making cool cash in the crypto world now is by investing in ICOs, which you will buy at a very low price and you can eventually sell off once such coin hits the Exchange Market. You can as well HODL such coin till it MOONS and sell at a very high price and BOOM, you are counting your money.

What is an ICO?
ICO is the abbreviation of Initial Coin Offering. It means that someone offers investors some units of a new cryptocurrency or crypto-token in exchange against cryptocurrencies like Bitcoin or Ethereum. Since 2013 ICOs are often used to fund the development of new cryptocurrencies.
ICOs can be considered to be like the regular shares one buys from a company with the hope of making huge profits in the future but in this regard, we are referring to digital assets.

An initial coin offering (ICO) according to Wikipedia is a controversial means of crowdfunding centered around cryptocurrency, which can be a source of capital for startup companies. In an ICO, a quantity of the crowdfunded cryptocurrency is preallocated to investors in the form of "tokens", in exchange for legal tender or other cryptocurrencies such as bitcoin or ethereum. These tokens supposedly become functional units of currency if or when the ICO's funding goal is met and the project launches.

The first token sale was Mastercoin in 2013 followed by Ethereum in 2014 which recorded raising 3,700 BTC within the first 12hours, click here to read the full article.

This year  there are over 100 ICOs in the market waiting to hit the exchange market which will make their investors rich, though you have to be very careful when investing in an ICO has there has been series of reports that scam ICOs are now in the market ready to run away with investors’ money. So, you have to be careful.

How Does ICO Work?
In order to get investors to partake in their ICO, most projects give out to free tokens to individuals who registers and also invite their friends to register. This is done in order to gain popularity and prominence. Before partaking in an ICO, I recommend you try and do the following so as to prepare you in making a better choice.


    Whitepaper: Check the Whitepaper of the ICO. The Whitepaper contains all the necessary information to be known about the coin. It is expected to explain in details what an investor tends to gain by investing. You can always read the Whitepaper from the official website of the coin.
        Values: The technological idea behind their projects. Some blockchains will be based on PoW or PoS. You need to know exactly what you will gain by supporting such project with your money. Will that particular technology will be able to stand the test of time? You need to know.

      Security: What are the security mechanisms put in place to ensure the tokens of investors are protected from conventional security challenges. They must be able to guarantee you a reasonable level of security to store your tokens
        Regular Updates:Try to check if such ICO has customer support and genuine social media channels such as Facebook, Twitter, BitcoinTalk, Telegram where they update their existing and potential investors.
Note: The above mentioned points (if a particular coin should meet all) do not mean such coin will be promising.

So the final decision lies with you to do more research before investing in an ICO.

What has been your experience with ICOs so far, kindly share in comment box to enlighten others.

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