Crypto Academy Week 9 - Homework Post for @imagen

If you want to take your business to a higher level there are few options that can be taken like getting a loan,go public or find a professional investors and the new way to take your business higher is the usage of ICO.

Image Source

Initial coin offering (ICO) is a crypto currency industry synonymous to an initial public offering (IPO).It is used in raising funds for companies to create a new coin,app or service for the development and expansion of the company.It is the new way for a company or an individual to raise funds through cryoocurrency company . Companies creates a token or coin and sell it to their investors in exchange for cash or cryptocurrency like Bitcoin.A good example of ICO is the Tesla which is owned by the richest man in the world,Elon Musk he has made a rule that the electric car can now be purchased using Bitcoin.

Also another example is selling a product which is profitable,so instead nof issuing a share,all you need is to create a digital currency which will enable your customer to buy with it or use their money to purchase it.
After ICO has been dond, interested investors could buy into the offering an accept a new cryptocurrency token issued by the organization.Some utility in using products or services they are offering might be in the token or they might be representing a stake in the project.They are mostly related to the cryptocurrency and block chain.
Some ICOs are have massively yielded returns for investors while some haven't.The number of ICOs has skyrocketed for the past few years.In 2018,In the first quarter of that year,over $6.6billion was raised through 217 ICOs sales and an increase of 65% from the last quarter of that same year and under the 7 billion rise in 2018.

For one to become a participant in an ICOs, purchasing a digit currency will be needed and one must have the basic knowledge of the usage of cryotocurrency wallets and exchanges.
Ethereum project is one of the most successful ICOs of all types and the world second largest cryotocurrency.In 2014,it sold $60M ether coinand raise capital of 31000 BTC which is over $18million in gist currency.
Crypto currency are underpin by block chain technologyand also ICOs were primarily used by block chain products but now other companies are flocking into ICOs evenif they don't have or required the use of block chain.
ICOs are mostly unregulated which makes the investors exercise a high level of caution and also making research when investing in them

One if the most anticipated is Telegram (A messaging platform)which has over 200M users,it has raise over $1.7 Billion for it yet to be built block chain platform, Their token were plan for talking sales but as a they are no regulation which means they can't be controlled.Due to the facts that ICOs are not regulated some countries like China and South Korea has banned the usage in their country while some countries allowed the usage, Countries like Singapore made over $260million in 2018,United States made $310 million, United kingdom made $145 million from ICOs and other countries as well.

In early 2018,all ICO advertisement were banned on Facebook, Twitter and Google.ICO has been regulated in most countries in the world which has made the work easier for the founders without the use of a third-party compared to public company .
Without it being regulated,the rate if fraud will be alarming which several report has it that founders are disappearing with millions.In a recent study,80% of ICOs are scams.
When crypto currency wants to undergo a raise funding project through ICO,it usually creates a white paper that would outline vital details of the project,the necessary requirements upon fufilling the project,the cost needed, problem to be solved and solutions to it,the time range for the campaign projects and so on.

During the ICO campaign, supporters of the project purchase some of the token of the project with a fist or digital currency.This currency is known to the buyers as token and are equivalent to the shares of a company sold to the investors during the Initial Public Offering (IPO).
If the funds raised does not require funds needed by the the firm,it might be returned to respective investors at this point.ICO would be unsuccessful, but if it is vice versa the funds will be used to pursue the objectives of the project.

In every business they are risk but to avoid ICO scams,Investors should make sure that the project is a well defined because successful ICOs are totally understandable with their white paper.

Also, they are required transparency in the project they want to invest in by the company launching the ICO by requesting for legal terms and conditions set for it as well as making sure the ICO funds are being stored in an wallet that requires many keys before it can be accessed which is known as escrow wallet which serves as a protection.

DIFFERENCE BETWEEN ICOs AND IEOs

Initial Exchange offering (IEO) is a crypto currency Industry which raise funds by using utility token or coin through crypto currency exchange while that of ICO raising funds by using utility token and softwares.There are some slight or clear difference between them so of which include:
Initial Coin Offering (ICO)
1)The difficult to set up is easy
2)It has a low rate of fundraising cost
3)The investor protection is low.
4)It has high level of Investors accessibility
5)It has a low level regulations which means the rate of fraud is extremely high.
Initial Exchange Offering (IPO)
1)The difficulty to set up is not easy to that of ICO.
2)It has a medium rate of raising funds.
3)The investor protection is higher than ICO
4)It has low level of Investors accessibility
5)It has a medium level of regulations which means the scamming rate is lower

ADVANTAGES AND DISADVANTAGES OF ICO

Advantages
1)It is accessible for both investors and start-up businesses or companies.
2)It can be access online for proper investigation
3)it has high asset ability to be purchase quickly or to be sold in the market without affecting the value
4)Less paperwork are avoided unlike the public company
5)It has high return of investment

Disadvantages

1. It is volatile which it can affect the current value in a bad or good way
   2)The fraud rate is high:In recent study,80% of ICOs are scams.
   3)It doesn't undergo regulatory process
2. Companies or investors might not always get what is required due to lack of accountability
   5)Countries like china, South Korea banned ICO due to it non-regulatory process.
   ICOs first launched in 2013,since then 100of ICOs has been available and not at all has been successful.Succesful ICOs campaign can be divided into two large ICOs and profitable ICOs.Among them are:
   Eosio :This platform is used for creating apps or decentralised apps.The main goal is to pull out part of the Ethereum users base by offering them a more scalable block chain system.The talking scale ended at June 12,2018 and raise $4billion.

Firecoin:

This is an effective solution for data storage has more cloud base storage appears on the market to start-up as every chance of becoming leaders in the industry.The project has raise $257billion with $200million raised in the first 30 minutes.
DAO(Decentralised Autonomous Organization):This platform is used in holding for the fifth largest ICO to ever held,their mission was to create a decentralised venture capital fund wholly driven by its investors.

Block chain based business aim is to promote the ICO through various means to buy in from the public .Those who are investors are sent the brand's proprietary token to make utilization or hold upon launch.