What is ICO? How does it work?
In past few years the digital world has seen
many extensive changes that have completely turned the business scene upside
down. With blockchain working as a digital financial forum and cryptocurrency
altering the way we look at money, wider opportunities of business and profit
making have spread out. Such a thing has happened with the way we traditionally
used to look at collecting funds for a new project or idea - as it has been
transformed by the advent of Initial
Coin Offering (ICO). It is an originative decentralized process of
exchanging tokens for funds in form of cryptocurrency or fiat to support a new
business idea that the investors entrust, and that has a potential to gain
possibly humongous profits.
In simpler words, certain companies (generally
startups) that have limited resources to work upon a ground-breaking idea or
project use blockchain technology to collect funds from interested investors
without having to involve any third parties. Basically, it is relatively
different from Initial
Public Offering (IPO), as they are not required to give a share of
their equity in return of funds. Does that mean anyone can launch an ICO? Yes
it does!
How
does ICO work?
First of all, anyone can launch an ICO
regardless of the fact whether they are involved in blockchain affairs, or they
are an established company or a startup. The main requirement here is that you
must have a good knowledge about the blockchain market and dealing in cryptocurrency.
It starts with an idea for a project that you
want to work upon. Always begin with mapping out all the details of every nook
and corner of that project so that no blank spaces are left out. Once all is
compassed, be sure to start creating a hype about it in your community. If you
are not part of a community, then begin there! Reason being, if you have no
identification or contacts in a community, barely will anyone trust you enough
to invest in your ICO. Many startups take the help of communities on Reddit and several social
media.
As the publicity is continuing, it is
mandatory to create a whitepaper. It is a document that contains every single
detail about the project including ideation, aims, future expectations and
technical information. A whitepaper plays a significant part in this whole
operation since it poses as the face of the project. Any investor will make
their decision based upon how convincing and authentic this document is.
Then you get the tokens ready, which basically
are your own cryptocurrency that presently has no value. After releasing the
whitepaper officially you will collect funds in exchange of these tokens.
Decide carefully on the amount of tokens because you are required to create a
demand for them in the market. The whitepaper should clearly state what role do
tokens play in this exchange as they should be of some value in upcoming
future. They can either be used in the services you provide or will give some
sort of financial return to the investor.
It is based upon a trust that the value of
tokens will shoot up in future so that everyone involved can avail profits from
it.
ICO is a gamble and there is no surety whether
it will achieve profits or losses for you. Yet this is a window of opportunity
for the ambitious startups to produce an innovative project and preferably make
it a success. If you are one of those ambitious folks, contact Webcom System for ICO Development Solutions.
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