S4B Crypto Contest - Season 20

Hello everyone hope you all are doing great today I'm happy to participate in this contest that @waqarahmadshah organized.

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What does ICO stand for in the cryptocurrency world?

ICO stands for Initial Coin Offering and it is popular in the context of cryptocurrencies and also it is an innovative capital procurement model whereby new cryptocurrency initiatives offer a part of the new cryptotokens in exchange to funds so such tokens are usually cheaper at the time when the core concept of the project and its cryptocurrency is not yet released. Initially they became popular regarding their application from the startups to attract funds quickly without using traditional funding models. So there have been a lot of complaints and restrictions on ICOs over the years, making it a less common form of fundraising today and replaced by new forms such as, Security Token Offerings and Initial Exchange Offerings.

What is the main purpose of conducting an ICO?

The initial concept of ICO in crypto-currency is to acquire capital for a new project or start up by offering a token in the crypto-currency. It enables the project not to rely on local investments and to attract investors around the world interested in the application of blockchain. ICO also allow an early entrant to invest in what might potentially become a valuable venture in the near future. ICO also assist in developing a foundation which investors feel obligated to contribute towards the success of the project.

Are there any risks for investors participating in an ICO?

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Of course there are risks for investors willing to invest through an ICO in cryptocurrency. The major concerns are such that there are high instances of frauds and scams since the market of cryptocurrency is not well controlled. Also, the tokens bought during the ICO can be tremendously unpredictable, which makes investors prone to lose their money. One also runs the danger of facing project failure or even an inability to deliver on the promises made leading to loss of the funding which might have been contributed. Moreover, uncertainty in the legal requirements as well as possible legal restrictions can be the threats for investors engaging in ICOs. Prevention of these risks is possible provided there is detailed and proper research and study is made.

Have you ever participated in an ICO? If so, describe your experience.

Well, I have experienced an ICO in the process of using cryptocurrency and it was for me thrilling yet they had my nails bitten most of the times the notion of participating in an interesting project which could be financially quite rewarding was interesting, yet the fact that there is always high risk in the dealing escalated it up a notch. Although the prices move up and down and there are some problems which are sometimes met during ICO, being a part of a new and upcoming technology, and seeing the process of project’s evolution and further successful development was rather interesting and enlightening experience for me, as it let me be a participant and observer of the new digital era of technologies’ creation.

Thanks for reading my post I'm inviting @ability20, @emmy01 and @roselove to participate.