Initial Coin Offerings: ICOs Explained

I had the chance to write my second story for the Litecoin Alliance on ICOs. Here's a short excerpt, but you can find the full article here.

Disclaimer: I hold LTC along with several other crypto currencies. None of the following constitutes investment advice. Readers are encouraged to do their own research and to never risk more money than they can afford to lose.

What is an ICO?

ICO stands for ‘Initial Coin Offering’ and is a method for new projects in the crypto currency space to find funding in the community. This is instead of traditional funding avenues that new companies or projects would have to go through, like angel investors, etc. The crowd funding of a project through an ICO always involves a crowd sale of a new coin or token, hence the name Initial Coin Offering [1].

ICOs all come with their own set of rules. These rules dictate how the crowd sale will be operated. For example, a new ICO may say that for 1 BTC you get 10,000 of the newly created token. Sometimes there are rewards for buying into the ICO earlier and penalties for waiting until the end. There can even be rewards based on how much you contribute. ICOs usually have a minimum and a maximum amount of funding that they are looking for as well.

The first ICOs only accepted Bitcoin as payment for the crowd sale. However, as Ethereum emerged, it has become a common payment method for ICOs [2]. In fact, Ethereum as a platform is designed for the creation of development apps, whose ICOs have naturally been conducted on the Ethereum Blockchain, and usually only accept Ether for payment. Several platforms that are similar to Ether are entering the space, like NEO, Lisk or EOS, which should make for some interesting ICOs in the near future.

Be sure to check out the full article:

https://litecoinalliance.org/initial-coin-offerings-icos-explained/

*Forward to anyone who might find this information useful too. Happy Steeming!