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What is ICO ? "A simple guide to understand the crowdfunding for a better, connected, decentralized future"

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With the recent serge in ICOs and public interest in them, it became increasingly important to understand what an ICO is. So, in this article, I will try to explain what ICOs are. And yes, I have invested in them myself to understand what's going on before coming out to write an article about it. :D Also, I will try my best to keep this article newbie friendly (myself included btw ^^)

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What is an ICO ?

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ICO (Initial Coin Offering) is a means of crowdfunding a new cryptocurrency and an innovative idea that can be implemented on the blockchain technology (mostly, as of now). If you have heard about IPOs (Initial Public Offerings) in traditional stock market, you'll understand that ICO is a little similar, yet different, concept but for cryptocurrencies. When some bad-ass developers and entrepreneurs come into contact with each-other and generate a bad-ass idea, they offer tokens for new cryptocurrency to gather enough funding so that they can convert their idea into reality. The significant difference between ICOs and IPOs is that, when you invest, you get tokens of that new cryptocurrency which may get listed on the exchanges once the idea has been developed. It means, they aren't granting you any ownership in the company like IPOs.

An Initial Coin Offering is an event that usually runs for a period of one week or more and in which everyone is allowed to purchase tokens in exchange for established cryptocurrencies like Bitcoin (BTC) or Ether (ETH) just like IPOs of traditional stock market. In an ICO, there can be a specific goal or limit for project funding, meaning that every token will have a pre-designated price that will not change during the Initial Coin Offering period, which also means that the token supply is static.

Usually company denotes number of tokens to be distributed. For example, they'd distribute 40-50% of the tokens in the ICOs. 10-20% goes to the development team and their efforts in order to make the project work. 20-30% stays reserved for the future use purposes. Below image shows the distribution of Status, which is an upcoming ICO starting on June 20th.

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Successful ICOs Till the date

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1. ETHEREUM

The Ethereum ICO was one of the first of its kind to put this concept of an initial coin offering on the map. In 2014, the Ethereum project was announced and its ICO raised $18 million in Bitcoins or $0.40 per Ether. The project went live in 2015 and in 2016 had an ether value that went up as high as $14 with a market capitalization of over $1 billion. Ever since receiving that amount of funding, Ethereum has quickly grown and successfully became the second-most valuable cryptocurrency ecosystem in the world today.

2. STRATIS PLATFORM

The Stratis platform ICO is another on the list which has the highest ROI (+110912.14%) since its launch. The ICO was priced at 0.007 USD and they raised $610,908. They sold 84,000,000 tokens in their ICO. And the current price of the stratis token is $7.771.

3. GOLEM PROJECT

Raising US$8.6m in mere minutes is quite an amazing feat, and most people will always remember the Golem Project for achieving that goal. This significant amount of interest was not entirely unexpected, considering Golem is a decentralized global market for computing power. The ICO was launched at $0.01 and raised $8,596,000 selling 820,000,000 tokens within a few minutes. Current price of this token is $0.512 stating the RIO of +5019.10%.

4. STORJ

STORJ (SJCX) raised $461,802 in their first round at the price of $0.01 per token selling 51,173,14 tokens. They recently launched new sale of ethereum based application token STORJ which ended successfully. The details about the sell is yet to be released. But the previous token SJCX has achieved the price of $1.132 till the date, giving the RIO of +11224.20% since 2014.

5. ICONOMI

During the ICONOMI ICO, the team hoped to raise around US$10m in funding. It was quite an ambitious goal at that time, yet the investors helped the team reach that goal with relative ease. Even though US$10.5m sounds like a lot of money, it pales in comparison to some of the other recent successful ICOs. The company reported nearly 4,000 investors from all over the world partook in this ICO, which is quite intriguing

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Some other interesting stats of recent and previously successful ICOs


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Which ICOs are under your radar ?

I hope this article helps others who want to understand ICOs a little better. Do remember: It's always first priority to do the research about the token offering company and project+team before trusting them. Do your research and save yourself from scams.

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