Crypto Academy Week 9 - Homework Post for [@imagen]

ICO refer to as token sales. They come out a whitepaper explaining the business details. The paper talks about how much funding they need and the period they will use in raising it. It also contains the estimated value of the crypto currency after its release. It is limited to a predefined number of crypto tokens in exchange for higher currencies. Tokens are sold to develop the crypto currency ready for the future. Many who invested into it have made more profit while others resulted into scam. It’s important to note that unlike Initial Public Offering (IPO), you don’t own any shares in the company of ICO. You just buy a coin and hope that coin becomes important and valuable in the crypto market in future. In 2017 out of 435 ICO, each ICO made an average amount of 12.7 million USD. Accumulating all the money raised, they made 5.6 billion USD which showed how successful they were in 2017. One example of its success is considering the Ethereum. The initial price of Ethereum was 0.31 USD which raised to about 18 million USD in just 42 days. This made it the most valuable in the crypto currency ecosystem.

IEO meaning Initial Exchange Offering is a fundraiser in blockchain where by the whitepaper is analyzed and their crowdfunding will be made public. It can be seen that the two are obviously different and I will take time to go through some differences.

ICO	IEO
In ICO, its transparency is low. Whitepaper isn’t easily access and you only get to know what it is about from marketers. This might be suspicious and you might doubt you might get what you are expecting at the end of the day.	IEO is more transparent. The whitepaper is provided for analysis. The whitepaper contains everything about the business. When you access the whitepaper, you determine whether to do business with them or not. This makes it transparent and better for investment.
ICO does not depend on any medium in which it’s hosted. It’s just a platform where you buy a token of the ICO hoping for it to succeed. They do their business themselves and funds are being raised without a platform like exchange.	IEO deals with a middleman Crypto exchange makes sure to choose IEO’s with achievable projects. Crypto exchange does the funding by hosting the IEO. By so doing its outs its reputation on the line for choosing IEO for investors. Meaning the crypto exchange is the intermediary between investors and token users.
Anyone can buy tokens to be able to risk his or her chances. They don’t operate on any platform or exchange. They do market their business and when you think its okay for you as an investor then you then join them	Not anyone can invest into it. Since its controlled by an exchange. Investors on the exchange they are launching the IEO will be able to buy tokens to be part of the business. This shows the credibility and not just anyone but well-planned investors come into business with IEO.

That’s the three differences between ICO and IEO. But me as an investor, I will prefer being on an exchange platform t be able to invest into IEO then in ICO. Money is important and should be risked the right way not just gambling it into ICO.

Advantages of ICO

• It is decentralized. It gives every user the change to make and make sure his or her business grows.

• Its open to all. Any investor with money and willing to get into the market is free to invest. It doesn’t restrict those who can invest or demand any protocol before investing.

• Doing business is simple because there is no intermediary. When an investor is investing, he does not need anyone to facilitate anything for them. This makes investing into ICO business simple.

Disadvantages

• Prone to scam. Its simple to open an ICO business. This makes it easy for scammers to easier fraud people.

• There might be no accountability. The ICO is a probability which might not succeed. It is not guaranteed that they will get what they are expecting at the end of their said period. Investors can’t hold them accountable they were aware of the risk before investing.

In ICO, I will like to highlight more on Ethereum

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Ethereum was also funded through ICO in 2014. Buyers receive ether as an exchange for bitcoin. They were able to raise about 7 million USD in 12hours worth about 2.2 million USD. Ethereum had an open-minded smart contract which made it easy for calculating the funds raised. Majority of ICO’s has taken the network of the Ethereum. This has given many the opportunity to join the ERC-20 tokens. With the ERC-20, its what its being used for exchange in the Ethereum blockchain. its one of the most successful ICO and still developing in the crypto market. Its current value is 2,491.52 United States Dollar.

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