An initial coin offering or ICO allows a company to, using “blockchain technology,” offer its own digital currency (DC) or tokens through a crowdsale. The proceeds go toward funding the project. Think of it as a digital IPO.
An ICO has advantages (and risks) versus an IPO. The IPO is well-defined and regulated by the government. Currently, the ICO is not, which can save a lot of time and money for the issuer. Not being regulated has the downside of the potential of scamming, pump and dump, Ponzi schemes, and simply bad software.
One of the great advantages of DC is that it is very liquid and easily converted to other DC or fiat currency. Bitcoin remains the platinum standard of DC while Ether stands out above the rest of the crowd.
Coders who may well donate their time can add value so that they may participate in the higher valuation of the DC if they hold tokens.
As always, especially when starting, don't bet more than you can afford to lose.
