Steemit Crypto Academy Week 1 | ICO (Initial Coin Offering)

Definition of ICO

ICO is a new coin whose funding is developed through a cryptocurrency service system, ICO developers carry out an introductory strategy before being marketed. The funds collected from these investors will be used to build blockchain-based applications. ICO products generally have 3 variants, including launching new cryptocurrencies, smart contracts, or smart ledgers.

Credit

Investors' interest in buying ICO is based on a white paper made by the developer, in this white paper the developer will explain in detail the concept of the project being carried out, usually the white paper will contain the rights and obligations of investors to the ICO they have purchased.

Investors will have a double profit if the token that is developed is successful and is released on the market in the form of official coins, investors can trade on a market that has cooperation with the coin.

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Difference between ICO and IEO

As explained above, ICO is a fundraising system by developers through tokens that are generated, in contrast to IEO, where the system for collecting funds from investors is managed by a trusted crypto exchange company.

ICO tokens cannot be directly registered with certain exchangers, but must first be registered with the desired exchange, in contrast to IEOs, because from the start collaborating with exchange companies, when cooperation between developers and exchange companies begins, these tokens are automatically listed on the exchange list. so that it can be traded by investors.

Pros of ICO

• Developers and investors have the same advantage, meaning that developers get capital from tokens that are sold to develop their business, while investors have the opportunity to double their income if the tokens purchased succeed in penetrating the crypto market. Usually the first time this token is launched, the price of this token is cheaper and the price will jump sharply when demand continues to increase.

Disadvantages of ICO

• Developers transfer the function of funds collected from investors, for example using investor funds not for token development, the results are not as expected, many of the developers are committing fraud so that the white paper created is only a slogan to attract investors, and other shortcomings in the form of decrease in token value from the first price released on the market.
• The lack of investors made developers not seriously carry out their original plans so that the coins released to the market did not match their initial values ​​when they were first launched.
• There is no authority governing ICO in general.

ICO example

Filecoin is one of the first electronic currencies launched on July 15, 2014, this token operates in the online-based data storage sector, Filecoin has a development team such as Friedel Ziegelmayer, Matt Zumwalt, Jeromy Johnson, Lars Gierth, Jakub Sztandera, etc.

Credit

Protocol Labs developed Filecoin using the IPFS protocol which has a function as data storage and sharing on a decentralized web. To be able to use this decentralized data storage service, users must have assets in the form of Filecoin tokens.
If you are interested in buying Filecoin, you can visit the mainnet exchange, Kraken.

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