What is an ICO?

An Initial Coin Offering (ICO) or Initial Token Offering (ITO) is a new, unregulated method of means by which funds are raised for a new startup based on blockchain technology, using a form of value called ‘cryptocurrency’. Cryptocurrencies are split into coins and tokens, both of which are either considered securities or utilities (utility token).

All interested parties can invest or purchase the newly issued cryptocurrency using Bitcoin or Ethereum. Fiat currencies such as USD, GBP, EUR are typically offered with the more developed ICO / ITO projects.

This method of fundraising became popular since it removes the borders of trade, and enables startups not to limit themselves to a jurisdiction typically requested by regulated forms of fundraising, such as venture capitalists or banks. Furthermore, it also enables unaccredited investors to become a part of a project, something which they would not be able to do in restricted societies. Regulations for accredited investors change from country to country, with the list being available on Wikipedia.

Teuta Franjkovic

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