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What is ICO in simple words

ICO is an innovative option of finance investments in projects, which appeared with the development of different crypto currencies. This term is abbreviation from the Initial Coin Offerings. If we translate verbatim, this is "initial placement of coins".

These terms are frequently encountered on the way from people that are interested in investing and making money from crypto currencies. ICO smart contract in simple words is fundraising for a particular purpose on the side. ICO involves a number of projects that have a direct relationship with Blockchain and crypto currencies.

IPO (initial public offering) has many similar features with ICO. But IPO investors buy shares for fiat currency. In the case of ICO payment of securities occurred by using token - internal currency of project. The main objective of the crowdfunding initiators is a sale of a large number of tokens. Only in this case, the project will be developed steadily and rapidly. The real value of the tokens is undefined until the project is not to be released to the stock exchange.

Creating of a smart contract for ICO is necessary to ensure that future investors have the opportunity to use tokens for startups to get access to the services, goods or services provided by ICO. They can also receive dividends and sell tokens if they can bring the project to the stock exchange. In the future, its cost will only increase.

Writing of smart contracts for ICO is necessary in order to create the correct form of involving investments in crypto currency. It does not imply the existence of a framework regulating its activity. Then, individuals and legal entities can serve in the role of initiators coins placement. All audits and other points are excluded, because execution of main operations is conducted solely online.

Programming of smart contracts for ICO has basic value - idea. Only if you offer a specific project or idea, it is possible to collect the necessary investments.

The procedure is performed in a few basic steps

1. Preview of the goods or services. The ICO initiators explain to the public their idea. This stage involves its existence in the minds of the team or in paper form. Thanks to this step you can understand whether investors are interested in project or not. Start-up team answers all their questions. Announcement may take place online, in social networks or in real time in the form of a conference. Investors and the authors of idea accept the final solution.

2. Offer. This stage means a proposal for joint work - investing. Despite the fact that ICO is a free form, not related to regulatory bodies, it is necessary to attach it to a legal person. Based on his behalf the offer will be received. At this stage it is necessary to announce the terms of ideas realization and decide which amount is necessary for the implementation of the plan. Also there conducting the emissions of tokens, that's why they create a separate site. There tokens may be sold that goes behind closed doors. This is a way to gather all the necessary investment to launch the project officially.

3. Carrying out of advertising campaigns. After you make up smart contract and prepare everything to launch ICO, advertising promotion campaign begins. Startup must submit its product or service in detail, to clarify the terms of investment and the main objectives of the project, delve into the technical details. To advertise its proposal, it is appropriate to use a variety of channels.

4. Market launch Market launch of tokens is called crowd sale. At the very beginning startup offers investors to buy token at the site. Then sales of crypto currency are run on special markets. If token got into exchange, then this is an indication that the project is really worthwhile. However, it is early to say that it will bring success to the creators.

All this resembles a standard crowdfunding or venture type investing. Funds are invested in the project at the stage of creation of its idea. You will learn the basic ideas and agree the terms and conditions due to which investing will be conducted. If the project is successful, you can get your dividends. But ICO is not regulated, so development of smart contracts is an integral step of the work. The project should not necessarily be associated with the fintech. You can use ICO even for meat pastry, if there is any link with Blockchain.

Often companies create Etherium smart contracts, so investing is carried out exactly in this system. The use of other crypto currencies is less common, as the application fiat mode. Exhaust from ICO can be 100-10000x in comparison with the original investments.