Crypto Academy Week 9 - Homework Post for @imagen

Hey Steemians,
In this post , I am here to submit my S2 Homework Task 1 which I have carried out as required by @imagen Crypto Professor.

• Explain in your own words what an ICO is.
• Mention the differences between ICO and IEO
• What are the advantages and disadvantages of ICOs?
• List at least 1 ICO that is starting, is in development, or has ended. Explain the project of the development team and add information of interest. (Example: IOTA, Spectercoin, Ark)

What is an ICO?

ICO stands for Initial Coin Offering. It is similar to the IPO ( Initial Public Offering ) in the stock market, works in the Crypto World & blockchain. This is a good way to raise funds but at the same time it cannot be overburdened. It has also been proved to be a scam.

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A company that launches ICO makes a token based on their project and they offer us that token at its base price. Like if we took that token at its base price, then a fund is generated for that company. Or we can say that the company provides its token to its investors, who have helped to generate funds for it.

Every coin/token is built on a different technology or different project and And all its information is given in its White Paper such as why the company has made this coin, why it has been brought into the market, how much it is supply and when it will be released in the exchange. We can use tokens as we wish. We can sell it or we can wait for its value to increase after its release in the exchange. We can also trade it.

^{Note- It is very important to read the white paper so that we can get a good information about it. We could know whether it is Genuine or not. Because some scams happen. & ICO can be fraud.}

ICOs have become very developed and popular in today's times. From my research, Ethereum was the first to sell ICO in 2014 and fulfilled all the purposes. Many people are investing in it due to the profit from ICO. This is a new way in which it does not require the company to take loans from bank or other sources. Seeing the popularity of ICO in the recent times, I feel that this way of raising funds in the future is going to be very far ahead.

Advantages of ICOs

• The main advantage of ICO is that both the company and the investor benefit from it.
• The company provides tokens to its investors at a very low price/base price, which makes it easy for the company to raise funds and the investor can trade with these tokens on the right.
• One can easily invest in ICO as it is open to all.
• If the company's project is successful, both of them get a lot of returns. The value of the token increases significantly.

Disadvantages of ICOs

• Investing in ICO can result in loss of our funds. If the project is not successful, we will lose a lot of money. So before investing, check out the complete information about ICO.
• Many fake companies scam in the name of ICO. And after you invest, they disappear with your money.
• Investing in ICO increases the risk.

^{Note- Yes, there are many advantages to investing in ICO but there are also disadvantages. So invest only with complete information.}

Difference between ICO & IEO

As you can see from the name of IEO ( Initial Exchange Offering ) , Exchange offers it. It has nothing to do with any third party. Risks in IEOs are much less than in ICOs. Because every exchange on which it is to be released, that exchange investigates itself about it. Exchanges check whether the token is genuine or not.

Sometimes it happens that we invest money in ICO, but it is never released on the exchange, such ICOs are fake. But the exchanges themselves offer the IEO. So along with the release, they also add in the list. 2019 & 2020 have been very successful for the IEO. Anyone can invest in ICO but only users of the exchange in IEO.

After investing in ICO, we cannot buy or sell it immediately. For this, we will have to wait for its release on the exchange. But the IEO is launched by the exchange. And if it is in the list from the beginning, then we can easily sell or buy it.

Spectercoin

Spectercoin is a token that had many issues in the white paper. And there was no official white paper for this. So the team that developed Spectercoin decided to correct its flaws. But this could not happen without funds. They were in great need of funds. This is based on the Shadowcase whitepaper.

And the team found a way to improve their tokens through the ICO. So They launched an ICO in late 2016. Its funds were raised but not as much as they wanted. But even then it was corrected. And they distributed their funds. And the investors get high return. Its ICOs started in 2016 and it is in development.

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Click here to learn more information about Spectercoin

Conclusion

I think ICO is right to invest but after getting complete information. It should not happen that we invest and that ICO fraud turns out. So as much as possible we should do our full research before investing on it. But IEO is very popular at this time. Because of the scams of ICOs, people have lost faith in this and that.

Thank You

Cc-
@steemitblog
@steemcurator01
@steemcurator02
@imagen