What is an ICO? Is it worth investing in?
The full form of the ICO is Initial Coin Offering. Anyone who understands the concept of an IPO should be able to easily figure out an ICO. A simple IPO is an initial public offering of a company. Which investors think the company is likely to grow? Will buy that stock and hold it when the company’s share price rebounded to a satisfactory level then sell that stock to make a profit
The ICO concepts are very different
Nowadays, anyone can create their investment in cryptocurrency. Much of it will be built on the basis of Ethereum, and we can develop the cryptocurrency in any direction we want. For example, BuyUcoin wants to simplify the transactions of cryptocurrencies and cryptocurrencies without intermediaries.
What are ICOs made of?
In the past, if we needed a source of funds we had to borrow from the bank. When it comes to the world of startups we go to venture capital and must write a business plan for someone to analyze and it depends on what pile he wants to post about at that time. And what kind of industry are we in and what country? When it comes to the world we have Cryptocurrency and Blockchain when people start to trust Let’s start to look at what else Blockchain technology can be used for. It appears that there is a Smart Contract, which is agreed upon accordingly. There is a clear contract between them. Not on paper, but in the program at all.
So how is the ICO special? Why are people so interested?
ICO is a new form of fundraising that does not require a stock market mechanism. No tricky conditions and fundraising from all over the world. Coupled with this era where digital money is booming. And Bitcoin is now very expensive. So people are looking for new cryptocurrencies that have the potential to grow in the future to invest. Some currencies are successful because they grow up to 100-1000%, or some are extinct until they have no value at all.
OK, is the ICO worth investing in?
The question of what to invest in not just stocks, bitcoins, or ICOs, but other things as well it depends on the investor’s to understand and understand Investing in ICOs is more complicated than Bitcoin exchanges, because you need to analyze the the currency of that particular currency (similar to the 56-1 model that investors have to analyze) whether this coin has a bright future or not, as well as many factors that must be considered carefully.
Are ICOs legal now?
For all over the world, there is no guarantee that ICOs are legal. But it’s not illegal at all. I guess you can invest in ICOs, but what if something happened? There is no law to protect you. The Securities and Exchange Commission (SEC) is also considering ICOs and may help in the future, but until then you need to bear the risk by yourself.
Cautions about ICOs
- Beware of fraud or deception from quirky websites, ICOs are online investments therefore making it easy to cheat
- If the invested coin cannot go as popular as it should be it may result in a loss of the entire investment.
- ICO is a new business with high risk; don’t be fooled by the type of “guaranteed growth” propaganda.
How to buy ICO
Most ICO purchases are made through money. The buyer has to transfer funds to the wallet specified by the ICO seller, and most of them will be wallets that are tied to a smart contract that will transfer the money and do something next, for example, if it’s a fixed ICO. The price per coin is fixed; the coin will be transferred to the buyer immediately.
There are various forms of fundraising and coin delivery models that is often found
1.) Selling with fixed price and limited quantity. Capped First-Come First-Served is a sale on a per-coin basis and determines the number of coins to be sold. This will determine the money to be raised in the body. Whoever comes to buy first can go first until the coins run out. This is the most common form.
2.) Selling at a fixed price But there is no limit on the number (Uncapped). This ICO will set the selling price per coin, but will not determine how many coins will be sold.
3.) Capped Auction, this type will allow investors to specify the price they want to buy. and the total amount of money you want to invest and when the money has been reached as specified Then it will divide the proportion of who gets how many % from the highest bid price down until the number or percentage of the coin that is determined to be sold, and then sell the coin at the price of the person who got the coin with the lowest bid (called lowest successful bid price, similar to IPO (Dutch Auction)
4.) Auction without a funding amount (Uncapped Auction) will be like an ICO maker. Investors then buy by specifying the price and amount of coins they want to buy. Keep selling until they run out. Did not specify how much money was received and then stopped selling.
ICO cryptocurrencies provide a good option for investors as they are offered at low prices to attract interest before they can start trading on the market. Therefore, most tokens are in high demand when they are listed, and early investors can sell them at a profit.