What Is an Initial Coin Offering (ICO)?
An initial coin offering, or ICO, is a fundraising strategy in which a blockchain team sells their project’s underlying cryptocurrency in exchange for the funds they need to create the platform. Generally, those funds consist of bitcoin, ether, or both.
ICOs entered the limelight in 2017 as stories of 24-hour, million-dollar raises began circulating news outlets around the world. Status raised $100 million in June, Tezos accumulated $237 million in July, and Filecoin brought in $257 million in August of that year. Suddenly, it seemed as if any team working on a cryptocurrency could easily raise at least a hundred thousand dollars. ICOs gave young startups the ability to raise significant capital without having to deal with the sometimes ruthless venture capital (VC) firms.