ICO – Initial Coin Offering
ICO is just similar to IPO. ICO’s are invented to collect fund for startup and Blockchain projects. Here Investors are considered as shareholders, whereas they have been shared with digital tokens, through which they can claim their rewards for what they invest. ICO platforms have restricted the investor with a unique rule,(i.e) anyone who wants to take in part of the token sale has to pay with ethereum alone. This cause the ethereum market to gain gigantic growth, hence it becomes a heavy competition for bitcoin in a very short period. Ethereuem were played two vital roles, one as a “cryptocurrency”, and another one as a “Token”
Notably, the person or the company who launches their ICO has to properly deliver white paper which will completely describe the aim of ICO, and how they will handle after the success of ICO. Many ICO's have fulfilled all these basic norms, and have satisfied their investors with proper distribution of shares. But there were some exceptions!!!.
This exceptional ICO scammers where failed to prove the promise that they have said during the launch of ICO, and have absconded without properly distributing the share value of the tokens purchased by investors.
This continues to grow inside the industry…
And finally, people have miss understand that ICO’s are not a proper way to collect funds. Then ICO were locked into the black box of cryptocurrency industry.
To bring back ICO, there were many R& D processes were done by techies and Blockchain entrepreneurs. Finally, they got a clue. (ie.) Security Tokens
Read more about security tokens here>>
Originally Published at bitdeal