Since the advent of Bitcoin, companies have been coming up with various ways to make the most of this unique innovation. An ICO is one of such ways, this is what we will discuss in this article.
ICO is an acronym for “Initial Coin Offering” it is the cryptocurrency equivalent of an Initial Public Offer.
An ICO is a way new cryptocurrency companies raise money, they sell their cryptocurrency at a discount. If you buy from them and the currency appreciates in value you would have made a wise investment decision. Unlike an IPO, when you buy from an ICO it does not mean that you have shares in the company, you simply have the cryptocurrency you bought.
Buying a digital currency is an investment that can be risky but has a lot of potential for growth. The tremendous growth of Bitcoin over the years has been a great motivation for ICOs to crop up over the globe. It is now quite popular and attracts all sorts of investors.
Since Cryptocurrencies are not regulated by central governments ICOs are largely unregulated. This, however, is bound to change in the future as more and more of it crops up, the way governments would go about regulating ICOs is however unknown. The IRS has been held to say that any asset that can be changed to dollars can be taxed.
The Chinese government has banned ICOs from being done in China, many other countries might follow this line, however, since ICOs are done online the banning might be ineffective.