What is ICO Coin? This is a form of token sale of projects to attract the community to participate in investment. This form of ICO flourished in 2017.
1 – What is ICO Coin?
Coin is the common name of cryptocurrencies while ICO is the abbreviation of the phrase initial coin offering, which means a form of calling for investment capital by project owners to issue cryptocurrencies.
When a company or a team that develops their own crypto project wants to raise capital, they generate a low amount of tokens to attract investors.
When these tokens are officially listed on a major exchange, their value will increase, at which point investors can sell them for a profit.
2 – Development phase of the ICO project
Project construction phase: In this phase the project team will build the database, token standard, blockchain technology.
Ecosystem building phase: At this stage the project begins to build communities that accept payment of their tokens.
Fundraising phase: At this stage, the project will be announced to the public through major media channels and forums to call for crowdfunding by selling tokens at a reasonable price.
Stage token was on the trading exchange: this is the most anticipated stage of both developers and investors. When the project’s token is officially listed on the world’s major exchanges, the value of the token will increase dramatically.
3 – Potential when investing in ICOs
The potential for investing in ICOs is that you will buy tokens at very low value. After the token is listed on major exchanges, you have a chance to x5 x10 x20 x30, … the initial investment amount.
This is considered a form of super profitable investment in 2017.
4 – Risks when investing in ICOs
It can be seen that the potential opportunity x10 assets is huge, but besides that, the risk from investing in these ICO projects is also very high.
The reason for the high risk is that this form of ICO is not vetted by any regulatory body. Any individual or organization has the ability to carry out a project calling for an ICO investment.
Therefore, in 2017, there were many fraudulent projects, they drew a bogus project in theory. They don’t have any tokens, they don’t have blockchain. All project information is only on theory.
When the scam project owner has raised large sums of money from investors, they disappear with the money.