What is an ICO?
What is an ICO?
ICO stands for initial coin offering, An ICO is a way of raising funds for new cryptocurrencies. It means that someone(or people) offer investors some units of a new cryptocurrencies or crypto token in exchange for other cryptocurrencies like Bitcoin(BTC), ethereum(ETH), litecoin(LTC).
Why should I be interested in an ICO?
Many ICO’s have been very profitable for investors, with an ICO, you get a token, these tokens do not give you any sort of ownership of this new project, it is merely a way with which it raises funds. However, you can gain from it if the project succeeds and the value of your token increases, you can then sell it for a much higher price than for which you bought it. ETH for example was sold at 0.0005BTC & is worth today 0.05BTC.
Are ICO’s legal?
There is no straight answer for this question, ICOs have existed in an extremely gray area because arguments can be made for and against it.
You should be very careful with the ICOs you chose to invest in, as they are very risky and have a high potential for scams.
What is a white paper?
A white paper is a document that presents the idea that the ICO is raising money for. It usually contains the names of the people involved in the ICO, how the funds raised from it will be used and a lot more information that you will not find on the official website.
How do I know good ICOs to invest in?
With the overwhelming amount of ICOs going on, it can get difficult and confusing to know which one is worth investing in, just because the idea is good, it doesn’t mean the project will be good.
To know which ICOs will likely be successful, you must pay close attention to the following things
* Competition
If the project has something similar to it, try to look for what they are doing differently from the competition.
* Team
The people working behind the project are just as important as the idea behind it, what type of background do they have? have they done something similar before?
* Funds
How do they intend to use the funds they raise from the ICO.
You should make thorough research before investing in any new cryptocurrency.
I hope I have helped you understand what an ICO is, leave your comments below.
Read my post on how to buy bitcoin with debit/credit card in Nigeria.
Read my post the best exchanges to buy and sell bitcoin in Nigeria
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