I've spent the last 6 years working in online investor relations in Australia, mainly dealing with companies listed on the Australian Stock Exchange. Over the last two years I've been getting more and more interested in cryptocurrencies and trading myself.

I want to use steemit as a platform to write about what I've learnt from investor relations in Australia and how that can be applied to the Crypto space for better investor relations.

The obvious place to start is setting the groundwork - in the next 5 or ten posts I'm going to set out the foundations and cover the basics to help people new to the game get started. The first to uncover is all about the ICO. We start today with What is an ICO, then we'll cover how it works technically, how to hold an ICO, what regulations are there to follow and then some pointers on how to make your ICO successful.

Although receiving more mainstream attention than ever, the world of cryptocurrencies is still developing and there are a number of aspects of it that most people still struggle to understand. One such aspect is the ICO or the Initial Coin Offering. This process is surprisingly popular and surveys indicate that at least 20 ICOs are introduced into the cryptocurrencies market every month, at the time of writing probably way more! Regular players in the cryptocurrency market spend a substantial amount of money on these offerings in hopes of getting 10x, 20x, 50x and 100x profits. In this series we'll break down the ICO in more detail.

What is an ICO?

An Initial Coin Offering is similar to an IPO or an Initial Public Offering. It’s a financial transaction that allows companies in this industry to raise funding for their new coin and gain traction in the market. In regular IPO transactions, investors purchase company stock and gain profits from selling these stocks after the value has appreciated or from dividends. In ICO transactions, investors get a set amount of these new coins in the hopes that they will appreciate in value down the line.

Investors purchase these coins with already established cryptocurrencies like Bitcoin that have immediate liquid value. Once the value of the new coins has appreciated, they can sell it for profit or trade it in the market. The ICO helps new cryptocurrency companies set up their coin and system.

These new coins or tokens are issued on a blockchain or an indelible ledger that’s distributed and decentralized, which adds a bit of transparency to the transaction. This investment doesn’t give the investors any ownership rights and they only rely on the hope that their coins will appreciate in value down the line. As most ventures do prove to be somewhat profitable for the investors, they’re enthusiastic to invest.

During the process, the new company prepares a whitepaper with information regarding the project and that includes:

• What the company needs to succeed
• What it will fulfill once it is complete
• How much money it’ll need
• What type of money will the company accept
• How many tokens or coins the owners will keep to themselves
• How long the ICO campaign will run for

These transactions are unregulated so many are wary of investing in ICOs. Governments are in the process of creating laws and regulations to protect customer interests but so far, ICO is only regulated by the established system and the blockchain. Most new coins are built on older and more established currencies like Bitcoin and Ethereum. They use established blockchains, which makes it easier for investors to keep track of the coins introduced.

Despite the uncertainty and lack of thorough regulation, the ICOs are very successful. There’s already more than $250 million invested in this industry and of that $107 million was invested in 2017 alone. This shows that the market is growing and will potentially keep growing over time.

Will this market slow down?

Yes, well maybe, it is likely to slow down eventually and maybe we'll see some regulation but that doesn’t mean it will destabilise completely. The previous success of Ethereum, NEO and the immense profits investors gained from it is driving the ICO market today. Experts predict that this wave will linger for quite some time before it slows down and stabilises within the market.

Stay tuned for the next in the series - How does an ICO work technically?
EDIT: NOW UP! https://steemit.com/bitcoin/@icomarketing/how-the-f-ck-does-an-ico-work

Reference:

CoinDash - https://www.forbes.com/sites/jonathanchester/2017/08/16/your-guide-on-how-to-run-an-ico-for-better-or-worse/2/#61bd2a519793