ICO’s: A BRIEF INTRODUCTION
If you’re familiar with the stock market, you may have heard of the term IPO being used for initial public offerings of a company’s stock. Well, ICO’s, or initial coin offerings, play a similar role for a blockchain based company looking to raise some investment capital.
When a company is interested in pursuing a blockchain project, they offer interested investors the ability to purchase a token tied to the company’s initiative. This token can represent an equity stake in the company, or future access to their services, and can help raise millions for the project. Often times, these tokens are taken public, which is when they may be traded on an exchange.
However, investors new to the crypto game are recommended to steer clear of ICO’s before learning more about their inner workings because they ultimately entail a large amount of risk. This is largely due to a lack of regulation, which means these new investment opportunities can be riddled with fraud and false information.
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