A method of raising funds for a new cryptocurrency project by selling tokens to investors or early adopters in exchange for funding.
The ICO can be considered as a cryptocurrency-based initial public offering (IPO). However, The comparison needs improvement as there are significant distinctions between the two fundraising events.. ICOs are primarily used by startups to acquire capital.
Types of ICOs
Private ICO (Initial Coin Offering):
A type of fundraising campaign for cryptocurrency projects, that involves a specific group of investors being invited to purchase tokens before they are released to the public. This type of campaign is limited and has proven to be an effective way to generate interest and funding for a project. Early investors have the potential to reap greater rewards as the project grows and gains momentum. It’s crucial to keep in mind that engaging in these campaigns could be dangerous, so it’s best to proceed with caution and careful thought.
Public ICO (Initial Coin Offering):
A type of fundraising campaign that is open to the public is a type of crowdfunding that aims to attract a broad range of investors. This inclusive approach to investing is seen as democratic, as it allows almost anyone to participate. However, some investors are turning to private ICOs due to regulatory issues, making them an increasingly attractive option compared to public offerings.