Presently, the ICO and cryptocurrency market (including Bitcoin, Ethereum and others) provides business community with one more chance to participate ter successful digital economy projects. But how to use the fresh opportunities wisely? What is the best option to invest money: cryptocurrency mining or ICO? To find out an response, one should examine each of them.
It is necessary to know the basic concepts and key stages of this process ter order to realize advantages of investment te an ICO.
What does ICO mean?
ICO is an analogue to IPO (Initial Public Suggesting). However, the ICO campaign sells cryptocurrency tokens instead of shares. The process is carried out on the cryptocurrency exchange. Its advantage is that ICO expenses are ten- or even twenty-fold lesser than IPO ones ($10-20k on ICO vs. $200k on IPO). Besides, the results te both cases can be equal. By the way, Bitcoin has not involved an ICO but investments ter this cryptocurrency are still fairly popular.
Most commonly, large companies with the strong financial system come in exchanges using IPO campaigns. An ICO is primarily used by startups, being just at the beginning of their way to big business. It is a some kleintje of crowd funding for them. But newcomers should announce themselves one way or the other, thus the very first thing to do for the company is announcement.
1st stage. Announcement
The company aimed at creating an ICO gives a brief announcement on online portals, which most frequently bring together cryptocurrency community, such spil Bitcoin Talk, Reddit and others. It makes a presentation, describing the ICO concept and goals for investors.
It is this very stage where investors find the most interesting startups. After project discussions, one makes some corrections ter the business mode, and the next stage starts.
The startup creates an suggest: a partnership proposal for the certain scope of persons or general public. It specifies all conditions and details: investment sums, project duration etc. The statutory point includes the subject to be sold on the exchange. Spil a rule, it refers to cryptocurrency tokens.
Cryptocurrency token is a digital asset, which price is determined by project managers. It is usually related to a certain cryptocurrency. Bitcoin is the most typical one. Then, the price of tokens is rigorously corded to the bitcoin exchange rate. But they can be also supported by fiat currencies or even by gold.
After signing the offerande, it is necessary to make spil many people spil possible be aware of the ICO ter order to raise money. Therefore, startups hire advertising agencies to create an suitable information level. This stage is primarily aimed at business community. When the advertising campaign comes to an end, the project comes in the ICO.
The company that has entered the ICO can launch its tokens using several ways:
- collecting a ondergrens required sum of money determined te the offerande. Then tokens are released and identically distributed among investors.
- launching tokens ter advance. Then, they are sold on one or several cryptocurrency exchanges. Ter this case, the ICO is pretty similar to the IPO.
When sales are ended, the issuer is obliged to execute their obligations. At that uur, there are risks for investors.
Discovering the ICO concept and all stages of this process, one should concentrate on risk assessment. Investors should realize that Russia is not the only country without ICO regulation. It is also absent te the majority of countries. This fact is a good chance for frauds who simply vanish after getting a required sum. Thus, those desiring to invest te the ICO of any startup should be especially careful and conduct their own analytics. And the deeper it is, the better: one should examine company&rsquo,s operations, its market position, financial condition, and suggest.
There are special agencies, publishing a credit rating of companies programma the ICO. ICORating is one of them. They check business monster relevancy and practice of the team, explore financial stability, and analyze competitors.
There is one more way to protect your own investments. You should monitor companies engaging third parties for fund raising &ndash, independent agents. Te such a case, money comes on the Multi-sig wallet managed by agents only. When the ICO completes, they provide the startup with the ondergrens required sum and monitor fulfillment of its obligations. If everything is going well, the company obtains the next sum of money. Otherwise, agents block startup activity and none of transactions will be supported. Then, money comes back to investors.
There is another zuigeling of investments te bitcoin and other cryptocurrencies: mining. It is the process of obtaining digital currencies. Besides, one can find loosely available devices designed for a certain cryptocurrency. So why not just buy one or more equipment? It’s not all spil effortless spil it sounds. Like te any other business, one should estimate a potential benefit and expenses. It requires skill of main aspects, influencing the amount of obtained cryptocurrency.
The essential variable is hashrate or hardware computation power. It is a speed at which the mining system solves mathematical tasks. This power is measured ter hashes vanaf 2nd: MH/s, GH/s, TH/s. The higher speed you have, the more cryptocurrency you get.
One should not leave behind that the solution of mathematical tasks leads to the rigorously determined amount of bitcoins. This figure decreases twice each 210 thousand blocks (approximately every four years). Presently, the prize for a block is 12.Five bitcoins. It will be 6.25 bitcoins at the next stage ter 2020.
The extra factor influencing cryptocurrency obtaining is mining complexity. Shortly speaking, the more miners the network includes, the more difficult cryptocurrency mining is. Besides, to embark mining, you should join one of group of miners &ndash, pools. Each pool has its own toverfee.
The electric current price is also significant, spil all mining systems consume it strenuously.
The amount of money that miners can eventually get depends on the bitcoin exchange rate. By the way, Russia has banned the punt of metselspecie equivalents, which could be also referred to cryptocurrencies. But ter November 2016, the Federal Tax Service of Russia said that bitcoins were fairly legal.
Let&rsquo,s review the most popular mining systems spil an example: AntMiner S9, Antminer S7, and Avalon6.