Initial Coin Offering (also known as ICO) is the release of coupons, or tokens, by a project for future site services in the form of a cryptocurrency.
In contrast to the IPO, currency buyers do not get a stake in the company and have no influence on the internal management decisions. In fact, ICO is another implementation of the crowdfunding model, where members are financing the company’s development in order to benefit from it in the future.
For example, the Storj-Storjcoin X tokens can buy a certain amount of disk space in Storj or increase the bandwidth of the channel. Tokens can also be earned by leasing space on your own hard disk drive.
By issuing its own «money» and exchanging it for one of the common cryptocurrencies (such as Bitcoin or Ethereum) or even for real currencies (dollars, euros), the project can secure the financing needed for launching or development. Moreover, by issuing a currency for the project, it is possible to accelerate its development (as the introduction of money in antiquity increased trade turnover) and automatically solve the problem of future monetization.
In 2017, according to Smith + Crown, ICO had already raised $180 million — more than in 2016 ($101 million). The attraction is constantly increasing.
Some people talk about the transition to a new economy. The state and central banks, as always, only worry about the issues of control and anonymity, and some directly point out that many projects that passed through ICO have turned out to be fraudulent schemes.
The author of the article at CNBC compares the boom of the cryptocurrency markets and the growth of the ICO fashion with the boom in the Internet industry in 1999 and the accompanying IPO dotcom. This comparison is partly correct. Just like the Internet, cryptocurrencies are a tool. As with the Internet companies, many of the projects that go to ICO are simply trying to make money off the hype. However, other projects offer interesting solutions that may change the face of some markets.
By buying tokens released by the project, investors expect:
|Name||Symbol||Category||Start Date||Ends In||Funds Raised||Completed|
|Electronic Energy||E2C||Finance||Dec 20, 2017||387 days||N/A||N/A|
|GrounderCoin||CRCN||Finance||Jan 31, 2020||13 days||N/A||N/A|