An initial Coin Offering (ICO) is the cryptocurrency equivalent of an Initial Public Offering (IPO), in which a company goes from being private to being public by selling shares for equity. This is usually done to get money without going to a bank or venture capital company (VC). An ICO solves the problem of how to give out the first coins.
An initial coin offering (ICO) is similar to an initial public offering (IPO) in that both are ways for companies to raise money. However, an ICO is an investment that gives the investor a crypto coin, which is more commonly known as a coin or a token, instead of securities, as is the case with an IPO investment.
Because of technologies like the ERC20 Token Standard, it’s easy to set up an ICO. This is because the ERC20 Token Standard simplifies a lot of the development process needed to make a new cryptographic asset. Most ICOs work by having investors send money (usually Bitcoin or ether) to a smart contract, which stores the money and gives out a new token with the same value at a later date.
With time the value of crypto is increasing and its related services demand is also increasing, But the main thing is how these services are developed and who buys these services for their business and start a new business from scratch. To start your journey for Ico you need the right firm for the Ico software development company. Read more about it, you must read about it and know how it works.
1) The fundraiser doesn’t have to give a lot of information (so far)
2) You can get a lot of money for your business at a very (probably too, but what the heck) early stage.
3) Easy to check
4) Room for growth at a fast rate
5) There are no easy limits
6) Gives chances to projects that look good.
Disadvantages of an ICO:
1) Draws a lot of con artists
2) Based on nothing but speculation.
4) Traffic on the network
5) Where to keep the tokens
6) Help from the government
ICO development services take from several months to a year during the pre-public commitment stage. After the public commitment stage, investors send you the money, which takes about three months. This is the real crowdfunding process.
About Initial Exchange Offering (IEO)
An IEO (Initial exchange offering) is different from an ICO (Initial coin offering) in that it is not open to the public. To take part in the token sale, you’ll have to use the hosting exchange. In an ICO, contributors can buy the token for sale by sending money to a certain address. In an IEO, contributors/users must use the exchange’s accounts to buy the token.
The biggest problem with ICO is that no one else is keeping an eye on it. Basically, anyone can start an ICO as long as they have a white paper to convince investors to put money into their company. On the other hand, IEO is a model that is very different, if not completely different. While both ICO and IEO are types of Initial Public Offering, they work in different ways (IPO). In an IEO, the administrator is the exchange.
Advantages of IEO (Initial Exchange Offering):
1) Fraud risk is lessened. Scams are less likely to happen on exchanges, and smart contracts can’t be harmed.
2) Making it easier for startups and developers to do business
3) Give their clients more choices. They set aside some coins for new customers and give traders more freedom and openness.
Disadvantages of IEO:
1) Companies that do IEO have to follow strict rules about exchanges.
2) IEO is not free; it has to be paid for.
3) There’s no promise of success
4) The IEO’s success depends on
5) Setting up accounts on different exchanges could take a lot of time.
6) A KYC is needed for every exchange (know your customer)
7) It’s easy for big investors to change the price of the token.
8) This way of funding a project adds another point of failure in terms of security (the exchange)