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A step by step guide to how ICOs work and how investments work

Aug 17, 2017 Posted /  2419 Views

A step by step guide to how ICOs work and how investments work

A step by step guide to how ICOs work and how investments work

An ICO is an unregulated way to initiate the  crowdfunding via any cryptocurrency. The term is frequently puzzled with 'token sale' or crowdsale, which refers to a method of promoting their contribution in an economy, giving the investors an access to the features of a particular project starting a  date later. ICOs, alternatively sell a right of their ownership to that particular project.

Let us look at the step by step guide on how these ICO's work:

 1. A technological  start up team having a particular aim to raise funds and its after use, develops an ICO using a software platform which is enabled  by blockchain such as Bitcoins or Ethereum.

2. This  platform is supported by a hcryptographically based on software tokens known  as coins and tokens.

3. The team of ICO releases a white paper, which describes  its main  idea to better technical depths for the cryptocurrencies community to evaluate, which is ideally supported by a sample or an example.

4. The ICO team then crowd funds (which is also known as a network token presale, sometimes initial coin offering, or an 'ICO'), the plan in an event that uses the cryptographic tokens where, a part of their tokens pool are exchanged for funds, to a community of various developers.

5. The company then releases these tokens  on the blockchain platform in two ways:

a. Collect the precise funds, which is outlined inside the offer, and then split and distribute these  tokens to the investors based on their  initial investment made by them.

b. On the other hand, tokens are sold on the cryptocurrency exchange platform, which means that the tokens needs to be released in advance for trading on various platform of exchanges.


6. Companies which create products and services that integrates a token in their solution should go for an ICO.

The blockchain technology platform and cryptocurrencies have surely created a way for more advancement, because of the shortage of regulatory supervision allowing  these start ups to move forward from their boundaries which were created by those before them.

There are a many sites that list the currently on going ICO's and also about the upcoming ICO's, the information is available even on many of the social media platforms.

If a person is interested to invest in such ICO's, the first step of the ICO process is to make out that which project or company launch is of most significance.

While going and searching through the ever rising number of ICOs coming up in the worldwide web, firstly create a cryptocurrency wallet.

Public sites for ICO's, like the Blockchainhub, gives advice that before making any investment  it is vital not to make use of any kind of wallet or exchange online, over the internet. 

Supporters are usually made to send their private keys into another wallet, in turn to access their new coins, so it is very important to make sure that the wallet’s private keys are exportable.

The companies have facilitated the procedure by creating the available functioning of online wallets for their ICOs, where the investors are allowed to send the money straightly to the wallet created, the funds which are exchanged by tokens by means of the exchange rate at the time of purchase of tokens, with the tokens deposited into their wallet. Others send the purchased tokens to the addresses from which the funds were sent before.

Investors should also be alert that certain wallets may be mismatched with the tokens and are thus not noticeable following any kind of purchase or receipt. For this reason it is necessary to have a wallet which allows the exporting of private keys, so that it is allowable to move the tokens to a new well-matched wallet.

The investors should read all the information carefully, to avoid any kind of risks, indulgence in any scam, fraud or ponzi schemes.

Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .

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Tags: initial coin offering ico list how icos work How to invest in ICO

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