What exactly is an ICO (Initial Coin Offering)
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An ICO is an initial coin offering. When a new cryptocurrency firm is starting up they sometimes need funding to complete the project, so this is where ICO’s come in.
Generally when a cryptocurrency firm/business/project start an ICO they will produce what is known as a ‘white paper’, this white paper generally contains the project plans including what the project will fulfil once the project is complete, how much funds are needed to complete each stage of the project, how long they expect each stage of the project to take to complete etc..
They generally release a roadmap too, this shows a projection of their targets and goals in a timeline format.
On the ICO launch generally public investors are expected to invest real money into the project, and in return the investors get ‘tokens’. These tokens are usually exchanged into the new cryptocurrency once the project is complete and the new cryptocurrency is live.
With all ICO's investors are encouraged to invest in the hope that their investment is worth more later when it launches.
For example in 2014 Ethereum used the ICO method and raised $18m+ in funds at a rate of 40c per Ether token. When Ethereum went live in 2015 the value of Ethereum was $14 per Ethereum.
In 2017 Ethereum has been worth $500+ at its high points.
Some ICO investments can be very profitable, but also a high risk of loosing funds entirely.
ICO & Governments?
Possible reasons why some countries do not like ICO’s could be because it allows a cryptocurrency to jump straight in with value at the time of launch, this is due to money already heavily invested in the currency giving it value from the start. Also maybe because some ICO’s may never complete the project and you do risk your investment being lost. Some countries may also think that cryptocurrencies weaken the value of their own local currency as people move money into cryptos. But there are probably more reasons why some countries may not adopt this new form of currency, but I think each country should embrace this new age with cryptocurrencies rather than fight it.
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It makes me sad that we cannot participate in these in the US.
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Is the U.S. banned from all ICO's?
Also surely some of the ICO's nobody can actually be stopped from participating in?
I know I am in some ICOs that do not accept the U.K. but I still own the ERC20 tokens in my Ether wallet, and I will still be able to cash them out!
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Interesting, I thought it was completely illegal for us. I will have to look into it more. Also I get that it can be hidden and not disclosed, but I try to be law abiding. =)
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Here in the U.K. it is not against the law, but our government did advise against investing in ICO projects.
Due to this some ICO projects have stated that they do not accept investments from the U.K. but if it is a simple Ether ECR20 token and do not need to register an account, then not sure how they can stop anyone!
But did not think that any country has actually passed any laws to stop ICO investments? Maybe I am wrong about this?
But do check the laws for your country and let me know if you find anything :)
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Will do brother.
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