Initial Coin Offerings, in short ICOs are very common way of fundraising in crypto market. If you know about IPO in share market then you easily understand ICO. The idea is easy. A project makes its own token. It then sell the token to early investors. This is the way of raising fund for a crypto based project.
This selling happen before the project is fully working. The tokens are sold at fix price. Sometimes they are different from this regular version of fixing the price. Investors buy with hope of high value later. This is the main attraction because if the project is good then there is a chance of hyping the price of the coin. In most time, investors use Bitcoin or Ethereum for buy this tokens. It makes connection of new projects with old market.
The money collected go for building the project. ICOs become popular in 2017. In that year many projects raised huge money from ICO. Blockchain projects grow fast because of this method. Any good project can grow with the fund by selling the coin in this method. So, developing a new project is super cool with this system. People like it because raising money was quick and without big rules. Developers can reach world wide. This is the most important advantage of it. Anyone with wallet and internet could join. This open access make ICOs very strong tool. It give normal people chance to support new project early. Some ICO was very profitable. That bring more and more investors to the space. It was cheaper also than old finance system. No need for banks or agents. All work was done with smart contracts. Blockchain make it open and clear. Each transfer write in public ledger. That give some trust to buyers and creators. For many it looks perfect way to get money in digital age. That make is popular and ideal worldwide.
