1.10 Initial Coin Offerings - ICOs In contrast to traditional crowdfunding, where investments are considered to be donations or pre-purchased products, ICOs give supporters the possibility to later sell their tokens at higher prices to obtain a return on investment. The ICO is similar to the IPO only when the contemporary currency represents the project shares. Crowd Funding or Crowd Investing? According to the white paper, tokens can have very different properties. ICO is often compared to crowdfunding or mass investment on the blockchain. In most cases it is a hybrid and does not belong to any specific category. In contrast to crowdfunding, which is seen as a donation, ICO gives supporters the possibility of selling tokens at a higher price in the future to gain profits. ICO can be seen as a mixture of donations, investments or venture capital investments. Investors get tokens for supporting entrepreneurial ideas. If a startup company succeeds, the token in the future will be more valuable but it will not usually be a stake in the system. If the tokens represent shares in the project, the ICO is similar to the IPO. Unlike IPOs, most ICOs conducted in 2016 and 2017 did not give investors traditional equity. These investors can be seen as supporters of a project that are fully motivated by the return on investment. In 2016, TheDAO is the most similar to IPO sales of tokens and is an exception to this rule. Each token holder owns the ownership of TheDAO. The right to vote is a positive example of the number of tokens owned. Please note that according to the white paper, tokens can have very different characteristics and value propositions as well as legal status! Regulation Until recently, the way ICO was built was entirely dependent on the team behind the blockchain project. At present, ICO still lacks government supervision and no community standards, which may be dangerous for investors who have not received investment education. In most cases, buying new tokens does not give investors equity, but hopes that if the project is successful, investors will be able to sell their tokens at a higher price. Critics believe that many of the existing ICOs are based more on FOMO than on rational investor decisions, which makes those who understand the system benefit more than investors who do not understand. At present, most countries lack government supervision measures based on the sales of blockchain tokens. This poses a great risk to the involved stakeholders (entrepreneurs and investors). However, the situation is rapidly changing and more and more governments are beginning to monitor or at least consider monitoring ICOs. Recently, the U.S. Securities and Exchange Commission has also made some statements to DAO. China and South Korea recently also banned the use of ICO. This may bring different motivation to the current ecosystem. Types of ICOs Due to lack of supervision, developers have so far had complete freedom in how to manage ICO. There are different ways of setting up these activities. There is hardly any ICO going in the same way, and it is almost impossible to cover every possible ICO situation. However, the price of tokens during ICO usually goes through different stages. In general, we can distinguish four different pricing mechanisms: (1) Price increase The ICO runs at the stage when the team sets a fixed exchange rate for tokens. The exchange rate may gradually increase over time. In this way, the riskiest early investors can obtain the best token prices. Supporters send bitcoins or Ethereum to the address provided and get new tokens. (2) Decline in prices Another option is the Dutch auction that was first proposed by the Gnosis team, where the highest price is at the beginning of each token, and then scaled down until the auction is over. For example, Gnosis uses the Dutch auction mechanism to raise funds for their project. (3) The price is fixed If the exchange rate of the issued token is fixed, this gives the investor as much token as possible at a fixed price. This mechanism attracts large investors because they do not have to worry about affecting prices by buying large amounts of tokens. After the sales of tokens are over, there is a cool-off period in which the tokens can be frozen (investors are not allowed to transfer their coins for a period of time) or away from the exchange. After the cooling-off period is over, the exchange can start listing tokens, allowing others to trade at market prices. (4) The price is uncertain The developer may decide not to sell his tokens at a fixed exchange rate, but rather to let people invest in his startup company and then distribute the new tokens proportionally by giving them a token based on their investment in the total investment. In EOS token sales, the total investment amount is divided by the number of available tokens to determine the price. In this case, if a startup company receives a single investor, he/she will receive 100% tokens. As can be seen from the above example, most token sales to date have been time-limited. However, some startups like Tau-Chain have decided to make their token offerings without caps and end dates. Therefore, before you invest in ICO, make sure that you understand how many tokens can be circulated and what the pricing mechanism is. The history of ICO It all started with the Mastercoin event, and people can support the Mastercoin project by using Bitcoin and obtaining a Mastercoin token. This is entirely through P2P, which inspired other projects that use the Bitcoin blockchain for P2P crowdfunding. The Ethereum project used the Bitcoin blockchain in 2014, successfully raised 1.8 billion Bitcoin in four weeks, and broke all crowdfunding records so far. The Ethereum blockchain has become a platform to simplify the process of issuing tokens. In 2016 and 2017 it triggered a series of record ICOs. ICO is still a relatively new concept, and it is still a small part of global crowdfunding capital. In 2015, the number of global crowdfunding was about 34 billion U.S. dollars, while the number of ICOs was less than 1 percent of the total number, which increased by 240 million U.S. dollars. The most famous ICO in the blockchain field occurred in 2016. A project called “DAO†raised US$150 million. Bldc Ceiling Fan Pcb Price,Worcester Bosch Fan Pcb,Bldc Fan Controller Pcb,Pcb Mount Fan Full Industrial CO.,ltd. , https://www.iotaindustrial.com
ICO is a crowdfunding or crowdfunding investment tool that is completely on the blockchain. Initially, ICO’s main idea was to fund new projects by pre-selling tokens to investors interested in the project. Entrepreneurs submitted a white paper prior to ICO describing the business model and technical specifications of the project. They set a timetable for the project and set a target budget to describe future capital expenditures (marketing, research and development, etc.) and the distribution of tokens (how many tokens they will keep for themselves, token supply, etc.). During the crowdfunding campaign, investors bought the same tokens as Bitcoin and Ethereum cryptocurrency. 
