ICO is short for the first coin supply. When launching a new encryption or encryption, the developers offer investors a limited number of components in exchange for other major cryptocurrencies such as Bitcoin or Ethereum.
ICOs are an amazing tool to accelerate development funding to support new secret sources. The tokens issued during the ICO may be sold and traded on the assumption that they are of sufficient interest to them.
Ethereum ICO is one of the most popular successes and we are talking about the growing popularity of the original coin offerings.
A Brief History of ICOs
Ripple may be the first source of funding distributed through the ICO. Linn At the beginning of 2013, Ripal Laboratories began developing Ripple payment system and estimated at approximately $ 100 billion. These were sold through the ICO to support the development of the Ripple platform.
Master Coin is another cryptocurrency that sold a few million tokens to Bitcoin during the ICO. In 2013. Master Coin was to demonstrate Bitcoin transactions and create new contracts at the top of the current Bitcoin code to perform advanced contracts.
Of course, there are other secret currencies that have been successfully funded by the ICO. Back in 2016, Liske raised an estimated $ 5 million to deliver its first coin.
However, The Ethereum ICO, held in 2014, can still be seen. During their tenure, the Ethereum Foundation sold ETH for $ 0.55 each, reaching $ 20 million. Using the power of smart contracts at Ethereum, it paved the way for future coin delivery.
Ethereum’s ICO, a recipe for success
Ethereum Smart Contracts has implemented the ERC20 protocol, which sets out the main rules for creating other compliant signals that can be transferred to the Ethereum blockchain. This allowed others to create their own tokens that complied with the ERC20 standard that could be traded directly for ETH on the Ethereum network.
DAO is a significant example of the successful use of Ethereum smart contracts. The investment company raised $ 100 million in ETH and received DAO tokens to enable investors to participate in the management of the forum. Unfortunately, the DAO failed after it was hijacked.
Ethereum’s ICO and their ERC20 protocol describe the latest generation of blockchain-based projects through public coin delivery.
It also makes it much easier to invest in other ERC20 tokens. You can easily transfer, paste the contract into your wallet and the new tokens will appear in your account so you can use them as you wish.
Obviously not all secret currencies have ERC20 tokens on the Ethereum network, but very well any new blockchain-based project can launch the first coin offer.
Legal status of ICOs
When it comes to the legitimacy of ICOs, there is a small forest there. In theory, tokens are sold as digital goods, not financial resources. Since most states have not yet mastered the ICO, the whole process should be out of paper considering that the founders have a current lawyer in their team.
However, some states are aware of ICOs and are already working to control them in a similar way to stock and sales.
Towards December Back in 2017, the US Securities and Exchange Commission (SEC) classified ICO tokens as securities. In other words, the sector was preparing to stop the ICOs it was trying to mislead investors.
There are some situations where the token can only be used as a token. This means that the owner can easily use it to access a specific network or protocol, which cannot be described as financial security. However, the purpose of appreciating value is that the signs of justice are very close to the concept of security. In fact, most brand purchases are for investment purposes only.
Despite the efforts of regulators, ICOs are still in the gray area and entrepreneurs will continue to benefit from the original coin offerings until a more clear rule is enacted.
Once the rules reach the final form, the cost and effort required to comply make ICOs more attractive compared to conventional financial options.
For the time being, ICOs remain an exciting way to fund new crypto projects, and many successes have come.
Note, however, that everyone is currently running ICOs and that most of these projects are fraudulent or lack the solid foundation to grow and value the investment. For this reason, you should definitely consider any crypto project and team and background that you would like to explore. There are many websites out there that list ICO, just search on Google and you will find some options.