Hello everyone!

Hope yo all are good and enjoying your lives in a good way.

Here is my homework task for professor @imagen.

What is ICO?

ICO is a different kind of cryptocurrency used by the businesses to raise the capital in which for there share of monetary investment businesses get a certain kind of crypto token. This means it’s a kind of public funding created through the creation and sale of digital token to fund the development of project just like customary buying and selling in which u get something in return for your money spent.

In ICO the token you get from the company in exchange of your investment (in shape of money or cryptocurrency ) carries certain features of the run project by issuing company. The main purpose of that it is serve to fund the projects that would normally not be funded by traditional manners. This kind of investment is gaining reverence among the people who are starting to take it as highly profitable investment for both medium and long period of times.

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Difference Between ICO and IEO

Following are the differences as apprehended by me between ICO and IEO.

ICO	IEO
It’s a direct investment	Exchange act as intermediary
Has low liquidity	Has high liquidity
No vetting process for the buyers	Proper vetting process
No initial due diligence of project	Proper due diligence of project
Prone to fraud	Fraud is highly unlikely
No launch requirements	Launch requirements
Level of transparency is low	High level of transparency
Low level of security	High level of security
Supports anonymity	Supports openness

Advantages and Disadvantages of ICO

ADVANTAGES OF ICO

• A Proper Manaegment team who work behind an ICO
• Provides better Investment chances
• We can expect to gain high profit inShort period of time
• Open for the public means anyone can invest
• ICO Supports anonymity
• We can buy or Invest in an ICO Instantly
• High liquidity
• There are no launch Requirements

DISADVANTAGES OF ICO

• High chances of Fraud
• Low Level of transparency
• Low level of security in terms of bogus projects
• No accountability or a lack of it
• limited project team
• Tokens do not lists on the exchanges immediately

Example of an ICO Project

Ethereum

One of the most famous and profitable ICO project of note was Ethereum ICO that was launched in 20th of July 2014 and ended in just 42 days on 2nd September 2014 and in just 42 days it collected a whopping $18.4 million dollars equitant to 31529 BTC at that time.

Interestingly, the only investment commodity allowed for investment was Bitcoins (BTC) and the ETH price for 1 BTC initially was set at 2000 ETH which was latter decreased to 1337 Eth for one BTC.

The project didn’t have any final or goal amount to raised initially so it was an open ended project. It is 6th most profitable project that is funded by crowd with the profits returns rising up to 3900% with respect to bitcoin (BTC ).

But as we all know that BTC or bitcoin is not pegged to USD like solid coins and that’s why it is prone to high fluctuations in its price. Due to this fact, the development team of the company though they made a very large amount of revenue lost a handsome amount of it due to flections in the price of BTC.