What is an ICO?

With crypto currencies becoming a part of the mainstream daily life, the abbreviation ICO has become more and more prominent too. But why has it become such an important term and what does it even mean for crypto enthusiasts and those who might become one? Here is our answer.

What is an ICO?

What is an ICO?

To understand what an ICO is means to understand how crypto currencies work in general. Initially, crypto currencies have been developed as a follow-up to digital cash and were supposed to offer people a decentralized currency. This idea has since taken off in the last ten years and can be found in numerous implementations on the market now. Most currencies and projects still follow that initial, decentralized approach but there are also those, who evolve around private companies, other central instances or even take a step back from being a currency at all.

An Initial Coin Offering, also known as an ICO, is a way for investors and enthusiasts to purchase coins or tokens right from the very beginning. It is often seen as a way to finance a new crypto currency or project while investors also get a chance to become a part of what might result in the next big thing in the blockchain community.

What is an ICO from pexels

More than Fundraising

There are more things to an ICO, than it just being a simple way of fundraising. Compared to any traditional way to invest in a company or project, like an IPO (Initial Public Offering of company shares), possible investors are not buying shares of a company. Investors can take part for many different reasons. Some might believe in the product’s potential, while others want to try out new investment methods or are simply looking for a chance to make great profit in a relatively short time.

Think of an ICO as a way to jump-start a new crypto project. Every new crypto project needs a way to connect their currency or tokens to an initial value at the start. The ICO helps defining this value while also backing up the business with financial resources. This means, investors need to do their research to distinguish profitable ICOs from ICOs that are unlikely to bring profit.

Due to the nature of the blockchain community, a lot of players who might influence the market, like national banks, are taken out of the game and more power remains with the users and investors. But there are certain control mechanisms coming in place, as of lately. The SEC, BaFin and other national agencies do check new crypto currencies, projects and ICOs beforehand to check if a business turns out to be currency or any other financial product that certain regulations and conditions have to apply to.

What is an ICO make profit

How can you take part?

It is common to take part in an ICO by exchanging Bitcoins or Ethereum for a certain amount of the new currency or tokens but more and more often it also possible to purchase them through paying with traditional currencies (FIAT currencies), like USD or EUR.

In case of azultec, investors are free to choose from a traditional ICO investment, or a variety of packages that include different amounts of tokens (in this case called “azul”), as well as a trip to azultec headquarters, a physical Azul coin and other benefits. The ICO starts at March 5, 2019 but you can register for the ICO from 8th January on. Until then, feel free to check out our white paper.

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