What is ICO?

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What is ICO?

ICO means ‘’Initial Coin Offering’’ is said to be a fundraising mechanism whereby underlying crypto tokens by new projects are sold in exchange for bitcoin and Ether.it is also similar or like the INITIAL PUBLIC OFFERING (IPO) whereby investors buy shares of a company .

ICOs are  relatively new process but have rapidly grown to be a dominant topic of discussion in the community of blockchain. many view ICO projects  securities non-regulated which allow funder to raise capitals that are not justified while others argue that it is an innovation in traditional model of funding.

The US securities and commission for exchange (SEC) has reached recently a decision regarding the position of token issued in the infamous DAO ICO which has definitely forced many projects and investors to check the funding models of different and many ICOs.

The most important criteria to consider is whether the token passes the HOWEY TEST.If its does,it must be treated as a security and will be subject to certain ban imposed by the US security and exchange commission. ICOs are structured easily ,mainly because of technologies like the ERC20 token standard, which abstracts lot of development process required to create a new cryptographic asset.Most ICOs work by having investors send funds usually Bitcoin or Ether to a smart contract which majorly stores the funds and shares an equivalent value in the new token at a specified  or desired period.

                                                                                  HISTORY OF ICO

Different projects are used to crowd sale model to boosten  the fund for their development work in year 2013.Ripples pre-mined 1billion XRP tokens and sold them to willing investor in exchange for fiat currencies or bitcoin.Ethereum raised a little over $18 million in early 2014- Making it the ever completed ICOs.The DAO was the first attempt at fundraising for new token on ethereum.It promised majorly to create an organization which is decentralized and would fund other blockchain project,but it was special in that the decision of governance would be made by holders of token themselves,.while the DAO (decentralized autonomous organization) was successful in raising money over $150million-an unknown attackers was able to drain million from the organization because of technical vulnerabilities, the  ethereum foundation planned the best course of action to be,moving forward with a hard fork allowing them to claw back all the stolen and lost funds.

Although the first trial to fund a token safely,failed on ethereum platform.Blockchain developers discovered that using ethereum to lauch a token was much easier and preffered than pursuing seed rounds through the venture capital model.Specifically ERC20 standard makes it simple for developers to create their cryptographic tokens on ethereum blockchainS.many argues that crowd-funding projects might be ethereum’s killers application’ giving the share size and frequency of ICOs never before have pre-products start up being able to raise this much money in this little time. Aragon was opportuned to raised around $25million dollars in just 15minutes,basic attention token raised $35million dollars in 30seconds.This ICOs  has come under scrutiny from many in the community as well as various regulatory bodies around the globe.

                      Are ICOs Legal?

The short answer is maybe.Legally,ICOs have existed in an extremely gray areas because arguments can be made for and against that they are using just new,unregulated financial assets.The  SEC’s recent decision,however, as since managed to clear up some of that gray area.In some cases,the token is simply a utility token, meaning it gives the owner access to a specification protocol or network ;thus it may not be classified as a financial security.on the other hand,if the token is an equity token,meaning that its only purpose is to appreciate in value,then it looks a lot more like a security.

Why many individuals purchase token to access the underlined platform at some future point in  time is difficult to be refute the idea that most token purchases are for speculative investment purposes. this is easy to ascertain given the valuation figure for many projects that have yet to release a commercial product.

The SEC decision may have provided some clarity to the stats of utility versus security tokens;’however,there are still plenty of rooms for testing boundaries of legalities .for now, and until futher regulatory limit are imposed, entrepreneurs will continue to take advantage of this phenomenon.In 2017, ICOs collectively raised 3.88 billion USD. Whereas, only halfway into 2018, ICOs have not only surpassed but nearly tripled the total 2017 market with 10.18 billion USD. Another interesting fact is that in 2017, ICOs also surpassed the traby

On the other hand, even though ICOs raised so much money in 2017, more than half of them have already failed and reportedly shut down. Still, many new ICOs keep coming to the market — as many as 1,388 were published in the last three months alone.

Good investment decision: Cash, Bitcoin, or ICOs?

The next thing we’re going to check is which of the following would be the best investment decision: to keep your money in cash, to invest it in Bitcoin, or to invest it in ICOs in the last 15 months.

Cash, Bitcoin, or ICOs? | 2017 and first half of 2018

The best bet for 2017 was, of course, to invest in ICOs. ICOs were booming in 2017 and turned out to be the best investment for 10 out of 15 past months. For 2018, the In 2017, ICOs collectively raised 3.88 billion USD. Whereas, only halfway into 2018, ICOs have not only surpassed but nearly tripled the total 2017 market with 10.18 billion USD. Another interesting fact is that in 2017, ICOs also surpassed the traditional VC-style funding for the Internet companies.

The amount of money, raised in ICOs | both 2017 and 2018

On the other hand, even though ICOs raised so much money in 2017, more than half of them have already failed and reportedly shut down. Still, many new ICOs keep coming to the market — as many as 1,388 were published in the last three months alone.

Good investment decision: Cash, Bitcoin, or the ICOs?

 next thing we’re going to examine  is which of the following would be the best investment plan: to keep your money in cash, to invest it in Bitcoin, or to invest it in ICOs .

Cash, Bitcoin, or ICOs? | 2017

The best bet for 2017 was, of course, to invest in ICOs. ICOs were booming in 2017 and turned out to be the best investment for 10 out of 15 past months. For 2019, the picture has completely changed, observing the market in a persistent downtrend from the start of the year. So, the best bet for this particular period was to keep it in cash has completely changed, seeing the market in a persistent downtrend since the start of the year. So, the best bet for this period was to keep it in cash

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