In the world of cryptocurrencies, initial coins offerings (ICO) are used to raise money for business purposes. Here is a look at these offerings and how you, as an individual, can respond to them.
What is it?
If a blockchain technology platform start-up wants to raise money, it can do so through the usual process of getting funded by venture capital or angel investors.
However, many blockchain startups are using the ICO route. In ICO, the company creates digital tokens, which are in cryptocurrencies. The tokens are issued based on the amount that the company wants to raise. These tokens have a predetermined value. It then sells these cryptocurrencies in an initial offer. In a way, ICO is similar to an initial public offer (IPO). In an IPO, a company sells its shares for the first time in the market. It sets a price band in which the investors can bid. In case of an ICO, tokens are generated and a price is set…