ICO is short for initial coin offering.
This is a public offering of a cryptocurrency or token to early investors, who can buy them with leading cryptos such as Bitcoin and Ethereum.
An ICO is similar to the initial public offering of stocks, the only difference being that it is unregulated.
Usually, an ICO is carried out to raise funds for a new cryptocurrency or blockchain project.
Investors buy the new cryptocurrency or token offered in an ICO with the hope that it will a huge success in future.
Coins and tokens offered in an ICO will be listed for trading in different crypto exchanges afterwards.
Some firms or projects may not conduct an ICO , but distribute their coins or tokens exclusively through an airdrop.
Intense scrutiny is required while investing in an ICO as the incidence of fake offerings or scams are high.
Before investing in an ICO , it is very important that one must go through the credentials of the team behind the project, the whitepaper, its celebrity endorsers, if any, and follow related discussions on social platforms such as reddit.
The incidence of fake ICOs are so high that the Securities and Exchange Commission often alerts investors about possible scams. So it is important to follow any advisory and warnings on ICOs from the watchdog.
You may also read Stablecoin .
by Jyotsna V