What is an Initial Coin Offering (ICO)?

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What is an Initial Coin Offering (ICO)?

An Initial Coin Offering (ICO) is a fundraising mechanism for new cryptocurrency projects, where the ICO releases underlying cryptocurrency coins/tokens in exchange for Bitcoin (BTC) or Ether (ETH). Investors send funds to a smart contract, which stores the funds and distributes an equivalent value of the new token at a future point in time.

ICO's are unregulated means of crowdfunding and are often times a source of capital for a startup company. The initial crowdsale of the new token gives investors access to a particular cryptocurrency project at a later date.

ICO's are often compared to an Initial Public Offering (IPO), where investors purchase shares of a company.
 
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