We are in a world where everything is getting digitized. In this digital era, now has come the time where now we are evidencing the rise of the digital currency. This introduction of the digital currency bloomed after the concept of the Bitcoin catches fire. After the success of the digital currency the world is now experiencing the rise of ICO. ICO, initial coin offerings can be simply compared to the concept of IPO that is Initial Public Offering.
However the concept of ICO is quite similar to an IPO still these two concepts can easily be differentiated by the two points that are - First in the ICO you are not actually owning a part of the share in the future company like in IPO, and second every ICO must be backed up by the blockchain technology unlike IPO.
Reasons why the companies are initiating their ICOs!!!
While the old concept of the IPOs might seem secure and safe, still companies are frequently launching ICOs in the market. ICO have many benefits that help this concept dominate the concept of an IPO.
Some of these benefits include -
- Retaining the Control
- No Regulatory Body is Needed
Scrolling down in this piece of article you will find what these points actually refer to.
- Retaining Control : Unlike IPOs, in ICOs, you are not sharing your company with any of your investors. All you do in this is that you sell your investor the future service. This means that you will get the money from the investors without compromising on the control of your company.
- Globalization : The most eminent part in an ICO is, in this you don't need to go door to door to get the investment and neither you will be bound to a particular place or domain. Through ICOs you can easily reach the investors all across the globe.
- No Regulator Body : In ICOs there is no bureaucracy involved. That is there is no regulatory body involved. In this tech startup the measure of success is dependent upon being first in the market.
Let's Jump to How does ICO Work -
All you need to make your ICO work is the pool of some cool people with a good idea. There is only an idea at the start that has the potential to turn into reality. For example, a startup that will allow you to buy a genetically modified tree and when it will grow it will have your name on its leaves for a bitcoin. All these people have to do is begin the campaign for the idea and invite everyone around the globe to buy tokens.
What is an ICO Token -
ICO token is not something physical. It is just lie a Monopoly. In this you buy and sell tokens without having any proof of its existence and yet experience the win or loss accordingly. This token basically signifies your contribution to the startup investment. The basic concept here is that the more amount you will give the more tokens you will get in return. With the help of these tokens you will be given the right to buy the future company services or will be authorized to simply sell the tokens.
This is the whole concept of an ICO that one should get familiar with these days. With the ongoing rise in this ICO industry, it has become quite clear that it is important to stay up to date.