Initial Coin Offering
Typically the process of the Initial Coin Offering (ICO) is used by companies to avoid the regulations that are burdensome. These sales of tokens or coins are opened in stages and promoted thru websites and social media. This is a type of crowd funding that generally involves exchanging dollars for cryptocurrentcy such as Bitcoin or Ethereum and then purchasing or contributing the crytocoin for a set amount of tokens or coins. Because these sales are not regulated by government they usually model themselves off of previous sales of this type (ICO)’s). With time you begin to see how different offers compare.
It is quite easy to loose money with an ICO and you should always do your homework. Many look at an ICO as an investment and in some cases they pay out. But for every ICO that is well intentioned there are many that are scams.
Once you have purchased coins from an ICO you must wait a short time before they are traded (bought and sold) on exchanges. This is when you make your initial gains or losses. Over time and with trades further gains or losses can occur.