Decoding ICOs: What You Need to Know Before Investing

ICO is an Acronym for Initial Coin Offering, which refers to a method known for funding at the beginning stages of Coin/token-based projects.

To give you a basic idea of what actually happens in an ICO is that a Blockchain-based startup mints a certain amount of its native coin/ token and puts up a sale for initial investors, normally in exchange for other cryptos such as bitcoin and Ethereum.

This is one type of digital crowdfunding technique. The main purpose that projects and startups develop ICOs is to raise funds to develop their project with more features and technologies, create a community for their project and build a form of trust with them in order to keep the investing flow steady and incentives the users who wish to see the project reach success.

It's one of the easiest ways to fund and a very creative way to approach the crowd. Well, apart from the startup benefitting from this, even the users have a few benefits: one, access to the services/ products in the project's ecosystem because they own a coin, and second, if the platform succeeds, then the token value will also appreciate well.

You're probably picturing small projects asking for capital to run their platforms, but you'll be surprised that Ethereum was the first of its kind to succeed with ICOs

and marks a real success story by being the project that raised $15.5 million in 2014. Want to hear more?

About 50 million Ethers were sold at the price of $0.311 each in 2014, and in May 2021, they all hit the roof, with their value reaching $4.382.73, thus profiting the investors by 1,408903% ROI.

In today's time, it is one of the most famous and running currencies worldwide, and it has developed an entire ecosystem of multiple apps.

It's really necessary to understand the roots of ICOs; only then will you be able to truly understand what they bring to the table.

Let's dig more deeper.

It all began in the year 2013 when a famous software engineer, J.R Wallet, penned down a whitepaper named "The second Bitcoin Whitepaper. in sync with the token MasterCoin and was able to raise about US$600000.

Followed by the year ahead, a total of 7 projects had raised a total of $30 million, with Ethereum standing high on the top, raising about 18$ million. 50 Million was created and sold to the public. 2015 was titled to be a silent year with the biggest collection of over $5 million.

The real Game for the ICOs began in 2016 when 43 ICOs were launched and they raised $256 million.

In 2017, ICOs saw a new rise and were welcomed to be a part of the many recent technological advancements. There were about 342 ICOs, and they raised about $5.4 billion and thrust the concept to the forefront of blockchain innovation.

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