What is an ICO?

What is an ICO?

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An initial coin offering (ICO), also known as a digital token sale or crowdsale, is a way of raising funds from the public for the development of a product outside of the traditional VC world. Usually products are blockchain-based technologies, but the crowdsale model is increasingly being used for other kinds of projects as well.

Each project creates a new cryptocurrency in the form of tokens, which are then sold to the public to raise funds for project development.

If a product successfully completes their ICO funding goal, their tokens are distributed to those who bought them and they become tradeable on the cryptocurrency market. If the product itself is then successful, these tokens can potentially become very valuable (ex. this is what happened with ETH, the computing platform Ethereum’s coin, which was originally sold to the public as tokens during the project’s own ICO).

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