Blockchain & Cryptocurrency Glossary

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Initial Coin Offering

1 min read
Pronunciation
[ih‑nish‑uhl koin aw‑fuh‑ring]
Analogy
An ICO is like a startup’s IPO but with tokens instead of shares and usually less regulatory oversight.
Definition
A fundraising event in which a project sells newly minted tokens to investors in exchange for capital, typically before the project’s mainnet launch.
Key Points Intro
ICOs raise funds via:
Key Points

Token sale: Investors send ETH or other crypto to a sale contract.

Whitepaper: Documents project roadmap, tokenomics, and team.

Smart contract: Automates token minting and distribution.

Risk disclosure: Often limited regulatory protection for investors.

Example
Ethereum’s 2014 ICO sold ETH tokens for 2000 BTC, funding development of the platform.
Technical Deep Dive
ICO contracts define sale parameters: start/end block, exchange rate, caps per address, and vesting schedules. Investors call `buyTokens` payable function. The contract mints tokens to purchaser and forwards funds to a treasury multi‑sig. Post‑ICO, tokens may be listed on exchanges for trading.
Security Warning
ICO scams are common—verify smart contract code, team credentials, and legal compliance before participating.
Caveat
Lack of regulation can expose investors to fraud and token value collapse.
Related Terms
Token Generation Event
Whitepaper
Security Token Offering
Smart Contract Audit

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