Cryptocurrency - How Does ICO Help To Raise Fund To Your Business?


Introduction to Cryptocurrency Markets

With the enormous development of the Blockchain Technology, new opportunities are created in the field of Trading and Investing. Specifically Crypto Markets are 'Borderless & 24/7 Open' so it offers huge potential for growth in Investment and Wealth Management era. More than 2000 new Cryptocurrencies are being created and traded on daily basis, leading to high returns for many investors. The combined market capitalization of all currently available in Cryptocurrencies together is only around $300 Billion USD, which leaves lots of room to expand in future. Financial Experts confidently consider that Blockchain and Cryptocurrency have become a niche market which leads to increase in transaction volume especially to Bitcoin and Ethereum. According to Juniper research, total Cryptocurrency transaction value may surpass $1 Trillion USD by 2022.

From my title picture, you may think that I am going to write an article on how to raise huge fund or make big investment from one of the trending terms called “ICO” or “ITO”. No, this article is only intended to make people having overall picture on ICO or ITO process. Initial Coin Offering cannot not be taken as a simple and easy way to generate capital rather it has a lot of effort and hard work involved.

Now I would like to start this article with a serious advice about ICO. You might have read in news articles like ‘Huge Capital is generated or Million Dollar Fund is created within an hour from ICO’. This kind of news creates a perception to the New Entrepreneurs that ICO is the best way to create fund to their ideas or innovations. Apparently No! ICO is not the place where you can get rich quickly from your New Idea or investing on New Ideas rather participating ICO makes you strictly committed to complete your final outcome. Okay, lets move to our topic!

Tokens & Coins

Tokens and Coins are two major categories of Cryptocurrency. Tokens are the representation of a particular asset or utility which are resides on Blockchain Network. It can also represent any assets that are fungible and tradeable, from commodities to loyalty points to even other cryptocurrencies. Tokens are created and distributed to the public through an Initial Coin Offering (ICO) which means crowdfunding of project development. It is such a similar concept of how Initial Public Offering (IPO) for stocks works.


Coins also referred as Altcoins or Alternative Cryptocurrency are often used as medium of exchange because of its interchangeability in design. Coins are basically derived from either existing open source Blockchain Network like Bitcon (Namecoin & Peercoin) or native Blockchain like Ethereum & Ripple. One common property of all coins is that they each possess their own Blockchain Network where transactions relating to their native coins.

Initial Coin Offering (ICO)

An Initial Coin Offering (ICO) is a kind of fund-raising method made available by the development of Blockchain technology. Through the creation and sale of Digital Crypto Tokens and Coins, investor has the percentage of right to project and development team creates fund to their project. These rights (Tokens & Coins) can be accessed through Blockchain platform and traded in Crypto Exchanges with other digital currencies or fiat currencies.

Process of raising ICO
Risks of ICO

  • Uncertain Regulations & Compliance
  • Lacking of Complacency
  • Bad Token Distribution
  • Code Vulnerabilities
  • Lack of Understanding in Crypto-Economy
  • Uncertain basis for token valuation
  • Lack of comprehensive due diligence
  • High positive promises for guaranteed returns
  • Unawareness of Project Scope and Market Analysis Reports 
Story Time

This short story is just for having better understanding on how ICO works in layman level.

One-day God has created a beautiful island in a big ocean with lot of natural resources to survey. People who found this island in the ocean were started to immigrate. God offered those people few Coconuts as a welcome gift based on their capacity. People in the island used their coconuts in hunger time and exchange with other people to get the desired stuff which others have. Life was going smooth for everyone. Great!

One guy has decided to build a house for him but his only effort on building the house was not enough so he gathered few people as workers and started building his own house. All his workers were offered with coconuts as wages and this guys came to know that coconuts were not enough to complete the work. Then he explained to all the people in the beautiful island about his House Building Design and asking their contributions to build the house completely by offering their coconuts. For return, he assured to provide a room in his house based on their contribution level. Few people believed his effort and importance of building house and contributed their coconuts to continue his work. By this way, he has successfully finished building his house and allocated rooms to the contributors. Now life is going better for everyone based on their trust on others. The End!

In this story, Beautiful Island is the Blockchain Network and God refers with the Blockchain Technology Hosting Team. Coconuts are tokens or coins which was used for medium of exchange. House Building Guy is the Founder of the Project and Contributors are Investors. The whole process can be referred to ICO.

Thanks for reading my article. Please post your queries, clarifications and suggestion.

Disclaimer: Information provided in this article are my understanding being shared for the educational purposes only. All the information provided here is from public domain, to best of my knowledge no proprietary information is used. If any questions or concerns about the content, please contact me directly.
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