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

  1. Registration on the website of the ICO company

  2. Purchase of Ether (ETH)  and transfer to your own wallet

  3. Register your own ETH address at the ICO companies' registry

  4. Sending ETH to the address of the ICO company

  5. 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

Begriff im Definitionsnetz

Begriff im Definitionsnetz

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