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What does ICO stand for in the cryptocurrency world?

Source

In the cryptocurrency world, the abbreviation ICO stands for Initial Coin Offering. ICO is a method of raising funds to support a new crypto project that Is yet to be launched.

Simply put it is a fundraising method whereby a new crypto project sells a portion of its newly issued asset to early investors, in exchange for already established cryptocurrencies such as Bitcoin, Ethereum, BNB, or fiat currency at a cheaper price. It is usually used to raise capital to support the development of a new project in the crypto world. I CO is similar to IPOs which are used to raise funds in the stock market.

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What is the main purpose of conducting an ICO?

Based on the little we have discussed we can point out the main purpose of conducting an ICO. To this, the main purpose of conducting an ICO is to raise capital (funds) for blockchain-based projects or cryptocurrency. By selling newly created coins or tokens to early investors, the project developers can secure the necessary funding that is needed to build, develop, and market their projects.

However, the objectives behind ICO are:

• Fundraising
• Token distribution
• Decentralization
• Building community
• Early access

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Are there any risks for investors participating in an ICO?

Yes, there are so many risks for investors participating in an ICO. While initial coin offerings offer significant rewards, they also come with risks which are:

Regulatory Uncertainty: It operates in a legal gray in which the regulation in one country differs from that of another country, The government should impose its regulations investors will be affected.

Fraud and Scam Since it is unregulated, it attracts bad investors and fraudulent projects whose aim is to steal people's funds, which once funds have been raised will vanish.

Lack of transparency: Some ICO projects are misleading investors with information about their goals, team members, and progress which makes it hard for investors to know the legitimacy of the project.

Token Utility: Tokens that are purchased during an ICO may have no practical use, or limited value which makes it hard for investors to derive value from the usage of the token.

Based on the risks of ICO it is advisable for investors to thoroughly research an ICO project before participating.

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Have you ever participated in an ICO? If so, describe your experience.

Yes, I have never participated in an ICO before. It was an ugly experience for me as I ended up getting worthless tokens that had no value in it. It was a project called Cakecore that I participated in which went away with investors' funds.

I bought the coin, and still stake some Core in the platform but I didn't receive anything at the end of the day. I lost more than $10 in the fraudulent ICO project.

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I am inviting my friends; @dave-hanny, @woka-happiness, and @vickyson to also join me.

Cc:-
@waqarahmadshah