What is ICO and how does it work? How is it organized? How to buy an ICO token?
"Initial Coin Offering"
What is ICO?
Initial Coin Offering or ICO is a kind of fund raising method. It is also known as “token sale”.
There are many funding methods for companies to collect capital. Funding with crowdfunding, public offering, venture capitalists or angel investors are part of them. ICO, which became popular in 2017, where the crypto industry gained tremendous momentum, was created in 2013.
The first ICO in history was held in 2013 by the first known altcoin Mastercoin (OMNI). The first major ICO was made by ethereum in 2014 and a fund of 2.3 million dollars was collected in 12 hours. Blockchain and crypto companies managed to collect billions of dollars through ICO type funding, which grew 40 times in 2017 compared to the previous year.
How is an ICO Organized?
Venture companies operating in any field can collect funds by avoiding many problems through ICO. For this, the project should start with a good idea, introduce it to the right audience through a strong marketing process, and establish consensus that it can be valued in the future by gaining the trust of users. There are some issues that must be obeyed in order for these processes to be carried out correctly.
How does ICO Work?
First of all, “ICO” should not be seen as an ultimate goal. The main purpose of ICO is to provide the necessary financial resources while climbing the project success steps. For this reason, the first thing to focus on is to lay the foundations for a strong project that represents a good idea. This is possible by making a strong brainstorming with reliable and experienced directions and determining the steps to be taken.
The next step after the decision is made to implement the idea is to establish the project team. In a core ICO team, content writers, editors, designers, strategists, programmers, legal consultants, advertising and marketing are among the sine qua non. It is essential to make sure that these people have the knowledge and experience to contribute to your project. Because the success of a project is possible only with a good team.
Next comes a strong market research. Before presenting a product, it is necessary to analyze tremendously what is going on in the market. Considering that there are more than hundreds of thousands of ICOs in the market, operating in a very competitive area will decrease your chances of success at the same rate. You should also make sure that your company meets all legal requirements and document that there are no legal barriers to your ICO. Otherwise, all your work will go to waste.
After creating the entire infrastructure, it is necessary to write a technical document describing all the details of the project. This document is called whitepaper. It is vital at this point that you hire a specialist in the Whitepaper writing. Because this document forms the backbone of ICO projects. To find out if an ICO project is a scammer, it can be a good idea to check if a whitepaper document is available. After writing the whitepaper, you can prepare a good website and prepare for ICO. Draw your road map, prepare good campaigns that you will offer to users during the sales process, do a professional marketing and start your token. That’s it.
How to Buy an ICO Token?
You can purchase the tokens sold with ICO by completing the necessary conditions offered by the project that makes ICO.
It is recommended to buy tokens of ICOs that are known to be fraudulent, thought to have a bright future and built entirely on legitimate foundations with no legal obstacles. Otherwise, you may be defrauded, become guilty or lose all your assets for the sake of a hopeless project.
Nowadays projects use a type of funding called IEO to ensure users ‘trust and to be less caught in regulators’ inspection. IEO stands for Initial Exchange Offering. In IEOs, which can be described as a subform of ICO, cryptocurrency trading platforms operate as a trust agent.