Crypto Academy Week 1 - Homework Post for [@imagen]

Hello to everyone,
Its a great pleasure to go through prof @imagen's lecture. Understanding what his lecture covered, I was able to make reseach on my own and now I'm here to submit my homework task.

What is ICO?

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Initial Coin Offering is shortened as ICO. It clearly means that someone gives out to shareholder or investors some components of a brand new crypto-token or even cryptocurrency in trade hostile to crypto currencies like Ethereum(ETH) or Bitcoin(Btc). ICOs are mostly used to finance the upbringing of newer cryptocurrencies since the year 2013. The premade token can be comfortably sold and purchsed on all cryptocurrency trading platforms if there is the need for them. With the victory of Ethereum(ETH), ICOs are heavily used to finance the upbringing of a crypto project by delivering token which is in a way unified into the project.
With this revolution, ICO has emerged as a tool that could transform not only currency but the entire commercial system. ICO token is likely to become the shares and securities of the future.
Before we get into the differences between ICO and IEO, we should first get to know what an IEO is since we already elaborated much on what ICO is in the paragraph above.

What is IEO?

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IEO or Initial Exchange Offering is an issuing of coins administered and managed by a cryptocurrency exchange. Exchanges regularly do IEOs in the interests of the foundations to raise money for them. In respond in kind, the tokens are recorded in the exchange. The cryptocurrency exchange acknowledge a proportion or percentage of the number of tokens traded in return for aiding the publisher with the trading functioning. Now we can get in to the differences of the two.

Differences between ICO and IEO

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1. In Initial Exchange offering (IEO), developers reveal all details about their project, like all figures about the system, the project members and many more. More so, they have to certify their recognitions by finishing the KYC procedure. This makes it troubling for fraudsters to take virtue of fundraising process. On the other hand, in Initial Coin Offering (ICO), token publisher are not required to reveal all the company’s information. All they can do is simply develop a website and broadcast a whitepaper. Later on, they can phase out their ICO platform and trade tokens to people interested. At this moment, you’ll be able to see the complication. Anyone at all can develop and launch an ICO and raise funds.

2. Initial Exchange Offerings (IEOs) are really much easier than Initial coin offerings (ICOs). Rather than following complex steps that are inconsistent with all IEOs, ICOs are greater pleasing to put money into it since they go by an ordinary policy for purchasing and saving the tokens in the trade.

3. With an ICO, issuers supervise a trading crusade. In order to do so, they make use premium advertising, conference and social networks. On the other hand with an IEO, the trade takes over this role.

4. ICO is decentralized while IEO is centralized.

Advantages of ICOs

1. One of the major benefits of ICOs is that it generates volatility (liquidity) and development fairness without giving up equity in many situations. This implies that the volunteer creators don’t give up or water down existing possessions in their get going by hoisting funding. However, being an investor, this can turn out to be into a risk since investors have no voting rights.

2. ICO develop an all-round community of explorers, early supporters, and investors who are motivated to lay out the word about a specified project or platform and therefore enlarging the network. The more people connect to the network the more the platforms gain from a positive network worldliness.

3. The Initial Coin Offering (ICO) financing version is conceived in such a way that you do not have to be an exceedingly financial stabled investor in order to invest in a project.

4. The government intervention during case of ICO launch is lesser.

5. Setting-up of the ICO project is sufficiently easy as compared to other funding platforms

Disadvantages of ICOs

1. ICO’s security limitations is one of the greatest challenge one could face. The entire system is just prone to scams and frauds.

2. For all the certainty that ICOs have been obtaining grip over the utmost few months, investors should be extra cautious and execute their attention when investing in an ICO. The ICOs are frequently processed in an uncontrolled surroundings, stating clearly that Securities Exchange Commission (SEC) or any other security bodies don’t have the supervion over the ICO operations. The money that went off-track or lost due to a fraudulent process may never be recovered.

3. ICO might not be a good idea when one plans to make long term investments.

4. The growth of afair during ICOs leads of a huge congestion in the blockchain platform and may result to jam. During the Status ICO, when they were able to raise a 100 million USD, it resulted to so much pile in the network that a lot of investors, who was willing to invest in Status, watched their transactions fail.

5. ICOs also have a problem storing tokens. There’s a possibility that you’ll not be able to store some of the tokens in any of your crypto-wallets. You will be able to store any tokens created in Ethereum right in your ether wallet but tokens made outside of Ethereum can be very difficult to store in your wallet.

What is Spectercoin

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Spectrecoin is built on the ICO platform. It was released on August 9, 2017. It is also aimed at secrecy like real cash. Its algorithm gives a circle of signatures for privacy. Moreover, the algorithm promotes quicker transactions and IP conceal inside the wallet.
The Spectrecoin creators are still working tirelessly to develop it to the peak. They own a master plan listing in order of security, privacy, and decentralization of characteristics.
The developers will create secret addresses accessible in the impending Android wallet. They also plan on developing at mobile wallet.
With the aim of developing Spectrecoin, the team behind it is completely unknown. But there are a few of them known because of their popularity.

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Conclusion

Looking deeply and conducting more research about ICOs and IEOs, I personally think it will be safer investing into ICO than investing into IEO. Althogh due to so many recorded scamming activies in ICO, most ivestors have lost interest in it. One should try as much as he/she can to make researches about the two before investing.

Thank you!