ICO is an abbreviation for Initial Coin Offering, or the first coin issue. This means that a person or project will provide the investors Tokens of a new cryptocurrency.
It's basically a form of crowdfunding. The investor buys the Tokens from a blockchain art. Depending on the success of the start up and in particular the belief in success, these coins are worth more or less.
An ICO and an IPO (Initial Public Offering) both assume the same principle. The difference is that in an ICO the goal is to finance a decentralized application or cryptocurrency, and in an IPO the goal is to finance a business (think of Shell or Apple). At an ICO you will be in possession of Tokens or cryptocurrency and at an IPO you will acquire shares in the company.
Since 2013, ICOs have been regularly used as a way to raise funds for the development of a project and the corresponding cryptocurrency that will be used within this project. When there is sufficient demand, the new Tokens can already be purchased or traded via exchanges while the project is still under development.
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