ICO – Initial Coin Offering

An ICO (Initial Coin Offering) is a fundraising method used by cryptocurrency projects to raise capital before launching their blockchain or product.

Think of it like a crypto version of crowdfunding—instead of receiving T-shirts or early access like on Kickstarter, investors receive a project’s native tokens.

How it works:

1. Whitepaper Release – The project publishes a document explaining what it plans to build, the token’s purpose, and how funds will be used.

2. Token Sale – Investors send popular cryptocurrencies (like Bitcoin or Ethereum) to the project’s wallet in exchange for its new tokens.

3. Development & Launch – The project uses the raised funds to develop the product or platform and eventually lists the token on exchanges.

Pros:

Can provide high returns if the project succeeds.

Allows early participation in innovative blockchain ideas.

Cons & Risks:

ICOs are often unregulated, meaning there’s a high risk of scams or failed projects.

Once you buy tokens, there’s usually no guarantee of getting your money back.