Modern cryptocurrencies have a lot of advantages. These assets are becoming more common day by day. Most people who invest in these assets know what they are, but some have no idea what cryptocurrency is.
The first thing that every investor needs to know is, like any financial project, the creation of a cryptocurrency requires funding. In other words, some capital is needed to enter the digital currency market. For this special projects are created – ICO.
What is ICO cryptocurrency?
ICO is considered the abbreviation of the original coin offer. ICO – the most common method that exists for obtaining the necessary capital to finance the launch of cryptocurrency on the market. Simply put, the work of ICO is to offer a certain amount of a new cryptocurrency to a closed public in exchange for another cryptocurrency of greater value, such as Bitcoin or Ethereum, or directly to the currency of any country.
The real advantage of such projects is that the new cryptocurrency is offered to the ICO participant at a price lower than it was provided before the moment when the cryptocurrency goes on sale. This means that investments made by a person participating in an ICO must be justified. That is why investing in the original offer can bring many benefits. However, few people find all the necessary information, even if they invest in cryptocurrency.
It is important to remember that it is necessary to take certain precautions when investing in cryptocurrency. You need to make sure that the ICO you want to invest in is not a fraud.
ICO is a method of financing the launch of cryptocurrency to the market via the Internet. A similar financing mechanism is used by companies that use Blockchain technology to finance their cryptocurrency projects.
What can ICO offer?
Being a method of financing the launch of cryptocurrency, ICO can offer only tokens of the platform that must be running. In this case, people who are interested in investing their money in this project will receive cryptocurrency from a new platform. As a result, it is likely that the tokens they received will increase their value when the project is consolidated. The idea is that people who have invested in the project, make a profit by increasing the value of new assets or benefits from the cryptocurrency system.
In order to launch a digital currency into the market, its creators bear some expenses that must be covered in full. All these operations are usually performed using intelligent contracts. These are digital agreements that are created using certain platforms, such as Ethereum, which, in addition to the cryptocurrency system, offer various services to all their users. Smart contracts work as cause-effect relationships between two or more parties. It turns out that if one of the parties performs the action previously specified in the contract, the other party is forced to obey the terms of the smart contract.
In this case, ICO uses smart contracts to automate the process of spreading digital currencies, as established by their creators. Thus, when you make an appropriate payment, the system through a smart contract will be responsible for assigning a certain number of tokens for which you paid. Your payment means the fulfillment of the first condition of the contract, and the result that is generated is the transfer of cryptocurrencies. The idea of ??ICO is that a company or a project receives cryptocurrencies or national currencies with greater liquidity.
The intellectual contracts used for ICO are checked and developed by specialized companies. This ensures that the entire process is as transparent as possible. This is done by ICO. As you can see, this is an automatic and completely safe process.