Blockchain is a kind of registry for storing data, but it is not located in one place but is distributed among hundreds of computers participating in the blockchain system. Information about all the transactions that have ever taken place within the system becomes part of this chain forever.
A distributed storage system eliminates the possibility of hacking or tampering. The information is hashed according to a complex mathematical algorithm, accessible to any group of computers participating in the chain.
Thus, any data gets the maximum degree of protection and anonymity, because it is almost impossible to trace all the stages of encryption.
The emergence of the ICO was a breakthrough in the field of transnational investment of product, manufacturing and financial projects.
An ICO is an initial public offering of tokens for sale to potential investors. A developer posts information about his idea on the corresponding platform, and users who believe in its prospects can become its sponsors. To do this, they need to buy tokens for the cryptocurrency set by the author. They can then be used to purchase the final product at substantial discounts or be auctioned off for a more profitable resale.
Advantages of ICO over other methods of raising investments
When launching a blockchain ICO, it is possible, depending on the nature of the token, to avoid government oversight.
The main stages of a blockchain ICO are.
- Pre-announcement – preliminary presentation to potential buyers. Used to analyze how interesting the product is, what details were missed in the business plan, what should be emphasized to investors.
It can be carried out many times until a competent and informative presentation is formed. Based on the conclusions obtained during the pre-announcement, the next stage of the blockchain ICO is created.
- Registering a company for an ICO is an important stage of a fundraising campaign, but one that many people overlook. Today, few countries have approved ICO regulatory bills.
In most of the world’s jurisdictions, ICOs remain in the “gray zone” of current law. Some founders take advantage of this provision, assuming that the lack of regulation equals the absence of taxes and problems with state regulatory authorities.
- an offer is a form of a formal offer to conclude a deal. It records all the characteristics of the company, specifies the terms of sale, the required amount, further ways of selling or using tokens and other details.
- Launch of sale – the operation can be carried out according to 2 models:
the minimum amount of the offer is collected, and only then coins are issued, distributed proportionally among investors;
coins are issued in advance and sold on cryptocurrency exchanges.
The optimal campaign format is chosen based on the characteristics of the future venture.