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What is ICO, How to Do it and What Does It Do?

While crypto markets take place in our lives, just like traditional or normal markets, transactions in traditional markets also take place in crypto exchanges. ICO is one of them and the question of what is an ICO is one of the most asked questions in crypto markets.

With this content, we will try to convey all the details about the ICO, especially the question of what is ICO.

What is ICO?

ICO; It is the initial public offering of a cryptocurrency before it takes place in the markets.

The ICO transaction has the same logic as the IPO transaction in the traditional markets and is a crypto market-specific transaction. It tries to collect investment capital by selling crypto assets called tokens in order to receive investment support for a new crypto currency.

The term ICO stands for Initial Coin Offering.

ICO transactions can be developed or initiated not only for cryptocurrencies but also for crypto-specific projects. Only if the crypto project in question is a crypto exchange project, then the transaction is referred to as IEO or Initial Exchange Offering, not ICO (Initial Coin Offering). For more information about the IEO (Initial Exchange Offering) process, you can review our content below.

What is ICO, How to Do it and What Does It Do?

ICO transactions, which have been mainly used for the development and financing of cryptocurrencies since 2013, started to be discovered by investors in 2018, while proceeding in a standard course until 2018. Ethereum, which started an ICO token project during this discovery period, increased its market value to $ 18.4 million.

After 2018, the period called the ICO era started and many tokens were produced. While some of these tokens remained as projects and could not reach their goal, some of them took their place as the most invested token or crypto money project today.

While some ICO transactions are only invested through their own systems, others can also be traded on crypto exchanges if there is demand.

How is ICO Made?

A company that initiates an ICO process sells token units, the Turkish equivalent of a crypto money project, in the form of an initial public offering, and interested investors buy these token units.

Before an ICO project is started, the project is defined in all its details and presented to investors by making a presentation. These presentations, usually made through a website, qualify as White Papers. The White Paper, whose Turkish equivalent is the White Paper, is logically the same as the prospectus that companies should have in IPO transactions in traditional markets.

If investors want to invest in an ICO transaction, they usually make their investments by sending a crypto currency such as Bitcoin (BTC) or Ethereum (ETH) to the smart contract defined specifically for the ICO transaction to be invested.

If the required capital investment is not recovered at the end of the ICO transaction, the recovered amount is distributed back to the investors and the ICO transaction fails. On the other hand, if the required investment capital is successfully collected, the project is implemented and investment earnings are distributed to the investors according to the share share as much as the project value and value.

What Does ICO Do?

ICO benefits both investors and companies or project owners.

From the investor perspective, an investor will be able to turn his investment into profit by applying to an ICO transaction that he/she has discovered and researched in the future, when the project or crypto money comes to life.

If we look at it from the point of view of the company or the project owner, if there is a crypto currency project or a different crypto project and this project is worth implementing, the project can be supported by winning investors and recovering capital investment.

What are the Advantages and Disadvantages of ICO?

Although ICO transactions are a kind of investment opportunity or an investor opportunity by ICO owners, there are also advantages and disadvantages. To talk about these advantages and disadvantages, we can compare the ICO process with the IPO process in the traditional markets.

The advantages of ICO transactions for investors and project owners are as follows:

  • While there are some conditions and procedures for being an investor in IPO transactions in traditional markets, these conditions and procedures are almost non-existent in ICO transactions.
  • It is difficult or impossible to invest in IPO transactions if the IPO transaction is abroad, but in ICO transactions, it is possible to invest in any country the project is in.
  • There are no legal procedures or control mechanisms to initiate an ICO transaction, as in IPO transactions. So starting an ICO is pretty easy.
  • IPO processes take a very long time, while ICO processes take much less time.
  • Projects invested in ICO transactions have a much higher potential to gain value compared to IPO transactions.
  • There is no requirement to own a company or have a certain activity to initiate an ICO transaction.

The disadvantages of ICO transactions for investors and project owners are as follows:

  • It is very difficult to say that every ICO transaction is reliable, since either a company or a person can initiate ICO transactions.
  • Since there is no control mechanism and legal process in ICO processes, malicious people can initiate the ICO process and process.
  • There is a possibility that the investments made in IPO transactions can be recovered if the required capital cannot be collected, but in the ICO transaction, this possibility is almost impossible if the ICO holders are malicious.
  • White Papers, which are the crypto world equivalent of the prospectus in IPO transactions, can be nothing but a dream and money can be collected by dream trading.

In general, investments made in ICO transactions involve high risks due to their disadvantages compared to IPO transactions. Therefore, before investing in an ICO project, rigorous research should be done and not every ICO transaction should be trusted.

Frequently Asked Questions About ICO

In this section, we will explain the most curious issues and the most frequently asked questions about ICO. This section will be updated in line with your questions and requests.

What is ICO Expansion?

ICO stands for Initial Coin Offering, and the term ICO consists of the first letters of these words.

What Does ICO Mean?

An ICO is defined as an Initial Coin Offering or Initial Cryptocurrency Offering.

How to Invest in ICO?

If the ICO to be invested has been researched in detail and the investment decision has been taken, the amount to be invested in the smart contract, that is, the wallet, published on the website opened for the ICO, is made in the desired crypto currency or normal currency.

How to Invest or Buy an ICO?

If the ICO to be invested has been researched in detail and the investment decision has been taken, the amount to be invested in the smart contract, that is, the wallet, published on the website opened for the ICO, is made in the desired crypto currency or normal currency.

How to Do an ICO Review?

In order to conduct an ICO review, the website opened for the ICO and the White Paper created for the ICO should be carefully examined and analyzed.

How to Do an ICO Review?

In order to conduct an ICO review, the website opened for the ICO and the White Paper created for the ICO should be carefully examined and analyzed.

What is ICO Coin?

There is no term called ICO Coin, but ICO transactions opened for a coin, that is, crypto money, are also called ICO Coins.

Where Can I Find ICO List?

There are many websites that publish new ICO list or ICO calendar. While some of these sites list coins that will do ICO, coins in the ICO stage and crypto projects, some of them have ICO chat, ICO advice and ICO tracking systems and provide interaction.

For ICO tracking and processes, websites such as CoinMarketCap ICO Calendar page or ICO Drops can be examined.

Does the ICO Have to Be on the Bitcoin or Ethereum Blockchain?

Cryptocurrencies that initiate ICO transactions and projects that sell ICO tokens mostly come out of the Ethereum network. There are also Bitcoin ICO projects, but projects can originate from other blockchains besides the Bitcoin and Ethereum blockchains.

Are There ICO Exchanges or Markets?

There are no ICO exchanges or ICO markets. Only ICO calendar and ICO news sites are available. There are calls such as Binance ICO or Gate.io ICO, but these calls indicate ICO transactions of their own tokens of exchanges such as Binance and Gate.io.

When Was The First ICO Released?

The first known ICO transaction was the ICO transaction of the Ripple (XRP) token unit made by Ripple Labs in 2013.

Aslıhan Yüksel

Aslihan Yuksel, who works as a manager inleading brands and companies in the business world; As a result of his interest in the crypto world and its markets, he has been interested in cryptocurrencies, markets and developments for a long time and transfers all his knowledge within Binansal.