What is an ICO

Initial coin offering

Initial coin offering (ICO) is an unregulated means of crowdfunding via use of cryptocurrency, which can be a source of capital for startup companies. In an ICO a percentage of the newly issued cryptocurrency is sold to investors in exchange for legal tender or other cryptocurrencies such as Bitcoin.

The term may be analogous with ‘token sale’ or crowdsale, which refers to a method of selling participation in an economy, giving investors access to the features of a particular project starting at a later date. ICOs may sell a right of ownership or royalties to a project. According to Amy Wan, a partner at Trowbridge Sidoti LLP practicing crowdfunding and syndication law, “The coin in an ICO is a symbol of ownership interest in an enterprise—a digital stock certificate, if you will.”

In contrast to initial public offerings (IPOs), where investors gain shares in the ownership of the company, for ICOs the investors buy coins of the company, which can appreciate in value if the business is successful.

At least 400 ICOs have been conducted as of August 2017. Ethereum is (as of August 2017) the leading blockchain platform for ICOs with more than 50% market share.

Source: https://en.wikipedia.org/wiki/Initial_coin_offering