What is an ICO?
Ico stands for Initial Coin Offering. That is an initial offer of coins or tokens.
It has been the preferred method of funding in the world of crypto start-ups. In fact, in 2017 the never-ending race to grab the latest launch on the market made this startup financing method famous. Serious and much less serious companies have launched on the market by offering tokens and projects, for the most part totally useless and unusable, causing a bubble to develop on the market which then exploded. The frenzy of users has increased the values but the market has brought them back to much milder prices.
But how is an ICO structured if we wanted to do it today?
An ICO is generally done on the Ethereum BC via the creation of a token which is offered to the public. All this goes through a smart contract that is activated when Ethereum is sent to it. Learn more about Smart Contract here.
Each time the user sends eth to the smart contract address, it sends the number of tokens calculated based on the number of eth received from a given address. The ICO ends at the end of the tokens set by the smart contract or at the time limit of the offer.
Each user who participated will find the assigned number of tokens in his sending wallett and can thus move them at will, always based on the rules applied by the smart contract. Learn more about Smart Contract here.
As you can see, Ethereum is sent by token. Currently, ICOs have gone out of fashion and the frenzy has disappeared with them. Most of the projects failed and the values stood at large percentages below all-time highs. ICOs have been like the DOTCOM cryptocurrency bubble, a painful but useful step to cleanse the market of useless projects.