Have you ever heard of ICOS? Do you know what is ICOS? If you do not know yet, this article will help you to learn more. At its heyday in 2017, initial coin offerings (ICOs) have overtaken venture capital as the primary method of financing blockchain startups.
What is ICOS?
ICO stands for Initial Coin Offering. It's a whole new way for a company to raise money without having to give up parts of the business. An initial coin offering (ICO) is an initial public offering (IPO) in the cryptocurrency industry. Companies looking to raise capital to create a new coin, app, or service can launch an ICO as a way to raise capital.
Interested investors can purchase initial coin offerings to receive new cryptocurrency tokens issued by the company. The token may have some utility related to a product or service provided by the company or represent a stake in a company or project.
Benefits of ICOs
- They allow you to raise capital before a full launch
- You don't have to give up equity in the business
- You can sell them internationally
- You don't rely on third parties to underwrite/cut earnings
How do ICOs work?
When a cryptocurrency project wants to raise funds through an ICO, the first step for project organizers is to determine how they will structure the token. ICOs can be structured in several different ways, including:
Static supply and static price: Companies can set specific funding goals or limits, which means that each token sold in an ICO has a preset price and the total token supply is fixed.
Static supply and dynamic price: ICOs can have a static token supply and dynamic funding goals which means the amount of funds received in an ICO determines the overall price of each token.
Dynamic supply and static price: The token supply of some ICOs is dynamic, but the price is static, which means that the amount of funds received determines the supply
How to start your own ICO?
Many companies build their currencies inside other companies, like Ethereum.
Creating your own from scratch would be tricky and time-consuming. The best way to think about it is like building an app for an app store, rather than building an app store to put your app on.
Here is the steps-by-steps process:
- Define your token properties
- Order smart contract.
- Run QA on the test chain
- Deploy to the blockchain
So I hope this article will help you understand what are ICOS and how to start your own ICO. Investing in cryptocurrencies and other initial coin offerings (ICOs) is highly risky and speculative and this article is not a recommendation by Investopedia or the author to invest in cryptocurrencies or other ICOs.
