Understanding ICO (Initial Coin Offering) in the World of Cryptocurrency
The cryptocurrency business world is increasingly sophisticated, of course, the devotees, this can be proven by the increasing number of new coins. If we pay attention to its development, now there are so many new coins that use the ICO system.
Then what is the meaning of ICO?
I want to help you in understanding more about ICO, I will give an explanation about ICO in the world of cryptocurrency, especially for new users who want to wrestle in the crypto world. ICO is actually not a new thing anymore, because ICO has existed since 2013. However, it is only recently being talked about by cryptocurrency business people.
ICO which stands for Initial Coin Offering, which means a new coin offering method undertaken by the developer as a form of raising capital before the coin is launched.
The coin offering is still in the form of tokens which are sold at cheap prices. Providing low prices by developers in an effort to attract investors to buy tokens. Before being issued, the token cannot be used for anything.
When the issue period arrives, the token that the investor has bought will be converted into a coin that can be traded freely in the cryptocurrency market that supports the coin. And of course it can be used for sending and receiving coins in full, or it can also be used to buy products through merchants.
ICO Objectives for Developers
Choosing the ICO method by the developer does not mean that there is no purpose, but rather this is a valuable opportunity for the developer to further develop the coin he created.
Here are 3 ICO objectives that you need to know about:
As a Form of Fundraising
The token sold by the developer is a way to collect funds from buyers or investors. Developers themselves must have a target of how much funding they need for the project.
For Internal and External Development
Funds that have been collected are used by developers for further development both internally and externally. Internal development is usually more to infrastructures such as website requirements that include domain and hosting, the convenience of sending and receiving coins, and the use of transaction system technologies such as blockchain and others.
To invite More Users
The ICO method also aims to invite more users. This is indeed proven, with the presence of ICO, new coins are already known to people before they are launched. So when the coin enters the market, the transaction volume will be high. This is clearly beneficial to improve ranking or ranking on Coinmarketcap.
That is an explanation of the ICO understanding that I have given in detail. Hopefully useful for those of you who are learning more about ICO.