As a starter in matters relating to finance, it is crucial to understand the basics. Most people indulge without any knowledge and end up failing. Finance is a broad area of specialization since it applies to almost everything. But let’s shift our focus on the trending financial matters; initial coin offering (ICO). It has taken the world by storm in the last few years with 2017 being the climax so far. Thanks to Internet and technology, people can now conduct their transactions online. As a beginner specifically in ICO, this is how you can learn more:
What is ICO?
The system uses cryptocurrency to conduct the crowdfunding from any point around the globe. Its main focus is to support business startups. It comes in the form of token sales which we can refer to as the ICO in this case. The cryptocurrency involved in any of these transactions may include, karma coin, Etherium and the popular Bitcoin. According to experts, it is estimated that more ICO transactions will be conducted at the time goes by.
If you wonder what ICO is all about, then this publication will help. Just like the initial public offering or IPO which publicly sells the shares of a company to the public, the ICO also shares the works in the same manner. It focuses on selling tokens on projects and businesses using the digital currencies.
Laws that guide ICO
Various reports indicate that ICO is not legal in some states like South Korea as well as China. However, it is required to adhere to local laws of any state to avoid regulations and banning. Different jurisdictions will indicate its own guidelines which makes it a tough yet rewarding venture. For it to be legal and allowed companies must not use this as securities in their business as the law does not recognize it. The most prominent challenge is a limitation in legal protection to the companies selling tokens and the buyers of the same.
Benefits of ICO
- A significant investment – As much as it is a risk, the people who fund the projects hopes that after the completion, their tokens will add value. From the previous records, most of the people who bought the tokens through Bitcoins have ripped fruits. Both the projects and the bitcoin values have gone up.
- Possible appreciation – In 2014, the first ICO was launched and it used Ethereal. Reports and records show that the people who bought the tokens of this project are still enjoying. The project is a continued success and gives hope to others who want to venture into the investment. Due to the increased demand, there is a great chance of appreciation of any ICO project and investor involves themselves in.
- Global investment – Unlike local investments which occur in the same locality one is, ICO gives investors an opportunity to explore the world digitally. You can buy the ICO tokens from any part of the globe with ease whenever it is open.
With the above information, beginners can simply understand more about the ICO and get a simple start to invest. Seeking more information from reliable sites will give further insights.