Initial Coin Offerings (ICOs)
Initial Coin Offerings (ICO) are a new form of financing like crowdfunding. Crowdfunding describes investments in business ideas or projects from a large number of people through the internet [1]. In case of Initial Coin Offerings, the organization sells cryptographic tokens to raise money. Mainly technology-based start-ups that operationalize Distributed Ledger and Blockchain Technology use this type of financing. To initialize an ICO, the respective services and conditions are defined in a smart contract. Once the investments and funds are received, the tokens are automatically sent to the addresses of the investors.
ICO investment process: [2] Example ERC20Token
-
Registration on the website of the ICO company
-
Purchase of Ether (ETH) and transfer to your own wallet
-
Register your own ETH address at the ICO companies' registry
-
Sending ETH to the address of the ICO company
-
Smart contract sends corresponding tokens to your own ETH address
[1] Antonopoulos, A. (2015): Mastering Bitcoin Unlocking Digital Cryptocurrencies
[2] Egloff, P. (2019): Blockchain für die Praxis: Kryptowährungen, Smart Contracts, ICOs und Tokens
