An Initial Coin Offering (ICO) can be seen as the blockchain equivalent of an IPO, which organizations (typically startups) use to raise financial capital for their project. Unlike Initial Public Offerings, ICOs are currently unregulated, far simpler to implement, and bypass the need to involve traditional lenders such as banks or venture capitalists.
An ICO (sometimes referred to as an Initial Public Coin Offering or IPCO) offers up a percentage of the tokens (cryptocurrency) to early backers of a blockchain project in exchange for fiat currencies (USD, EUR, GBP, etc), bitcoin, or some other cryptocurrency such as Ether, the Ethereum token.
ICOs are inherently of greater risk compared to IPOs and other more traditional crowdfunding methods, their unregulated nature offering little to no protection to individual investors. Indeed, ICO activities are coming under increasing scrutiny from financial authorities such as the Securities Exchange Commission (SEC) in the US.
Facts About Initial Coin Offerings
31 July 2013 – the date of the first token sale (an alternative and precursor to ICOs as a fundraising method), held by Mastercoin (now Omni).
500 – the number of investors in the Mastercoin token sale.
5,000 – the approximate number of bitcoin raised in the sale.
$500,000 – the US dollar amount raised in the token sale (at then-current exchange rates).
18 April 2014 – the date of the first Initial Coin Offering, held by Karmacoin. Now referred to as the Karmashares ICO, at the time it was dubbed an Initial Public Offering for Coins (IPOCO). Karmacoin was launched as an incentive and reward cryptocurrency which aimed to allow “people, companies, and schools” to send money to “friends, family, co-workers, neighbors, students, employees, charities, and others” over the Karmacoin blockchain network.
7 – the broad number of elements into which the details of an ICO can be divided: a) publication of a whitepaper detailing the plans and features of the project, b) the existing needs the project aims to address, c) the amount of capital required to execute the project, d) the currencies (fiat or crypto) that the ICO will accept, e) the length of the ICO fundraising campaign, f) the number of tokens to be released, and g) the number of tokens the founders of the project will keep for themselves.
$18 million – the amount raised in the 2014 Ethereum token sale (at then-current exchange rates), with the fundraiser accepting bitcoin as payment.
$0.40 – the equivalent value per ether at the time of the crowdfund campaign. It has since gone on to become the second largest cryptocurrency by market capitalization, after bitcoin.
ICO Profile: Bancor
390,000 – the amount of ether (ETH), the Ethereum blockchain token, raised in the Bancor ICO, which completed on 11 June 2017 (18:00 UTC).
$152.3 million – the US dollar value of the ether (at then-current exchange rates) at the time the crowdsale ended, marking a new high for an ICO at the time.
79,323,978 – the number of Bancor network tokens (BNT) created in the initial coin offering.
50% – the amount of these tokens (39,661,989 BNT) which were made available to the public. The remaining half were reserved for future use.
10,885 – the estimated number of individual buyers in the ICO.
6.9 million – the number of tokens that one single individual purchased, with an approximate value of $27 million at the time of the sale.
$540.4 million – the amount raised in Initial Coin Offerings in July 2017, a new high.
22,606% – the growth in ICO funding compared with the equivalent month the previous year ($2.38 million was raised in July 2016).
ICO Profile: Tezos
01 July 2017 – the date the Tezos ICO commenced.
2,000 – the duration of the fundraising, measured in bitcoin blocks mined (13 days).
$232 million – the amount raised (at then-current prices) in the Tezos ICO at the time of its close on 13 July 2017, beating the previous funding record (Bancor) by just over $80 million.
65,689 – the number of bitcoin (BTC) exchanged in the ICO, one of the two tokens exchanged.
361,122 – the number of ether (ETH) exchanged.
Tim Draper-Backed Bancor Completes Largest-Ever ICO – Coindesk (12/06/2017)