Crypto Academy Season 2 Week 1 Homework Post for @imagen- ICO (Initial Coin Offering)

Introduction

Hello steemian, wherever you are, hopefully you will always be healthy, on this occasion I would like to complete a homework from professor @imagen about ICO.

I will discuss a little about ICOs, and IEOs, and the differences between the two.

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ICO is

An ICO, or initial coin offering, sometimes also called a token sale or initial token offering, is a crowdfunding practice for blockchain projects, where a cryptocurrency or token is offered to early investors, before it is listed on a broader market, such as an exchange.

ICOs are high risk investments, so be careful when investing, which is why the most important aspect of participating in any ICO is doing extensive research around the project, this includes reading the whitepaper, finding out if the ICO provides real world value and researching the team in detail.

To participate in the ICO, you need to have the relevant cryptocurrency that the ICO accepts as an investment, make sure the cryptocurrency wallet where you are sending funds is compatible with the ICO token, triple check the deposit address from official sources, any mistakes will result in investment losses.

ICOs have achieved their goals after their soft cap is achieved, Soft cap is the minimum amount needed for the project to move forward, most ICOs will also have a hard cap, which is the maximum amount they will receive in investment, If the ICO fails to achieve its soft cap , most ICOs will return funds to investors.

Additionally, some ICOs require investors to provide personal details as part of the KYC (Know Your Customer) or Know Your Customer process and whitelist, while others are only available to private investors.

ICOs allow for funding of some of the most innovative blockchain projects in the world, but it is always important to do as much research as possible before investing and invest only what you want to lose.

ICO itself is published by ICO company's own website, in contrast to IEO, IEO is handled by the market or exchange itself, token sale and exchange is trusted in IEO as opposed to companies when it comes to ICO.

KYC or AML (Know Your Customer, using KTP or PASSPORT on users, the responsibility to verify and validate investors does not drop the company, and IEO has advantages in verification and proof is not SCAM and has the potential.

The Exchange will validate the company, and significantly reduce the possibility of fraud and fraud when issuing IEOs.

ICO advantages

When a developer opens an ICO it means that the investor has the advantage of getting a discount for buying a pre-release coin, so the investor can sell this coin for a relatively higher price.

ICO disadvantages

ICO also has disadvantages, but keep in mind that every profit has its disadvantages, developers who commit fraud or SCAM, the funds raised are for coin development but not to develop your coins, but instead your coins are taken away.

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Difference between ICO and IEO

ICO (Initial Coin Offering) is a funding mechanism that is trending in developing business entities, however, IEO (Initial Exchange Offering) is positioned as the successor to ICO. IEOs are also token sales, like ICOs, but are fully moderated by crypto exchanges.

IEO, how to buy it, investors must be part of the exchange and can buy or sell using a registered account, whereas ICO, you can directly buy and pay to owners through their wallet address, IEO basically serves as a safe medium between crypto projects and investors, IEO has many benefits.

Advantages of IEOs over ICOs

1. Investor Confidence

IEO is a trust of users or Investors, cryptocurrency exchange platforms carefully analyze each project before listing their token on the market or exchange, lowering the risk of fraud and dubious projects on each exchange, which ensures credibility and reliability for investors and helps them with safe business processes.

2. Security

On the one hand, it is the interests of investors that are protected by IEOs to ensure no malicious companies are listed, on the other hand, because the exchange handles the KYC / AML process, companies can rest assured that their tokens are bought only by genuine investors.

And the IEO is accompanied by the necessary regulations and KYC or AML verification, which provides top-class security for verified users.

3. Reducing the risk

Startups that issue tokens will benefit from the process of launching an IEO on an exchange platform that is easier, sleek and flawless, it is relatively straightforward than the classic ICO model where they have to do everything themselves, it might hurt the fundraising organizations they have to pay to exchange.

However, because exchanges can market it for them, the marketing budget is relatively lower, besides, because the exchange already has an existing customer base, they don't have to start over on the first day, hence, there is no chance of fraud occurring, unlike ICOs.

4. Strategy

ICO companies have to go through the task of listing their tokens on the exchange, when it comes to IEO, the exchange itself manages the listing of coins after the crowdsale ends.

There have been instances where the registration fee is 20 bitcoin and exchanges have asked for a 10% discount on the token, in all of these, the relative ease of the whole process wins a lot of profit points in strategy for the IEO, IEO opens up more market exposure, credibility and drives more users to the project by gaining trust and interest.

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IOTA

IOTA is a distributed ledger designed to record and carry out transactions between machines and devices in the Internet Of Things (IOT) ecosystem, using a crypto currency called mIOTA to account for transactions within its network.

The IOTA Foundation, the not-for-profit foundation responsible for ledgers, has signed agreements with leading companies, such as Bosch and Volkswagen, to expand platform utility between connected devices.

Understanding IOTA

According to research firm Gartner, there will be 20.4 billion devices connected to the Internet by 2020. In the IOTA ecosystem, each device will exchange data and payment information with several other devices in transactions carried out throughout the day, this means that transactions between devices will be possible. that is connected, and anyone will be able to access it.

Claim

IOTA claims it will solve many of the problems plaguing cryptocurrencies developed on standard blockchains, ranging from centralized mining to certain clusters, to low network speeds to scalability.

History

Sergey Ivancheglo, Serguei Popov, David Sonstebo, and Dominik Schiener, have joined forces and together founded IOTA, their blockchain was announced in October 2015 through a post announcing a token sale on an online bitcoin forum.

Conclusion

The conclusion is that ICOs have advantages and disadvantages, therefore you should always be careful when choosing an ICO to invest in, you must understand the makers behind the ICO and the market that the ICO enters.