Crypto Academy Week 9 - Homework Post for @imagen

1). Explain in your own words what an ICO is.

Mention the differences between ICO and IEO

ICO, initial coin offering is a funding using crypto currency and also a form of crowdfunding. It also means when an individual offers willing investors some units of a new crypto token in exchange against crypto currencies like Bitcoin or Ethereum.
It is also used to fund the development of new crypto currencies. It became popular in 2017. The token can be sold and traded easily on all crypto currency exchange if there is demand for it. ICO as a tool to revolutionize not only currency but the whole financial system. It could become the shares and securities of tomorrow.

ICO could be become the source capital for any startup company and can allow them to avoid regulations that prevents them from seeking funding/investment from the public. ICO have been the driving force of scams and fraud due to lack of regulations and enforcement of security law. Less than half of all ICOs have survived four months after the offering, while few sold in 2017 failed in 2018.
Many other cryptocurrencies have been funded through ICO, such as, Lisk, lisk sold its coins for around $5million in 2016. The notable funding now is Ethereum. In 2014 the Ethereum foundation sold ETH against 0.0005 Bitcoin each. With this, they received almost nearly $2.3 million, which has become one of the largest crowdfunding ever and also serves as the base for the development of Ethereum. ICOs can also be called tokens sales. Ethereum is the leading blockchain platform for ICOs with 80% market share. It’s tokens are based on the ethereum ERC-20 standard. Around 2018 ICO advertising have been banned by Facebook, Twitter, Google for crypto currency and binary options. Then some time In 2018 , Facebook changed their mind and have reopened advertisements for approved advertisers.

Regulations of crypto currency has been changing in 2017 after a speculative rise in crypto currency prices that peaked. Many countries have different methods to how they regulate cryptocurrencies. This depend on the nature of the cryptocurrency. The legality of ICO is undefined. The token is sold as a digital asset,which is why ICO is often called “crowd sale”. Though the funding is not regulated which makes it paperless and easy.

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There have been a couple of successful ICO, for example: Ripple, Mastercoin, Ethereum, Lisk, Augur e.t.c There is no government regulation of ICOs currently and investors can launch one provided that they have the technology put in place. If you have the desire to invest in a new coin. Make sure to do thorough research as there are a number of scams. A lot of investors have fallen victims to them. You need to be more careful when investing in an ICO.
ICOs have become a new way of raising money and besides, everyone is trying to adapt to the new ways without getting carried over. If you think you're able to make a good investment on a new ICO, just make sure to do your homework thoroughly. Cryptocurrency is about high risk and high reward as it is volatile and ICOs are no different. 

Difference between ICO and IEO

ICO (initial coin offering) and IEO (initial exchange offering)
ICO is set up by a crypto startup. IEO is created by a crypto currency exchange websites by integrating the IEO module.
The marketer budget needed to be raised by the company is said to be extremely high. IEO market budget is extremely low and actively market the tokens of the startup.
In the case of ICO,there are some liquidity crisis. IEO encourages high liquidity, protection and transparency. It is likely to be the next funding raising boom.
Setting up ICO is very easy. IEO set up is medium.
Before conducting ICO, there is no screening needed. IEO startups project are always passed through a vetted screening before conducting the IEO.

(2).What are the advantages and disadvantages of ICOs?

Advantages

Accessible for startups and entrepreneurs.
All transactions are done online.
It can easily be investigated and traced online.
It can move faster and are more relatively more liquid than other assets.
It involves less paper work.
They rely on blockchain to keep a ledger on various transactions.
It involves peer to peer networking, secure identification, digitalized assets.
There are no middleman or third party that exists between buyers and sellers of coins.
Fast and efficient.
No bank account is required but for clients that what to collect fiat currency, it would require a normal account.
They are not regulated, so are cheaper to issue.
The publicity for the company humongous and worldwide.

Disadvantages

They are subjects to fraud and other malicious practices.
Lack accountability.
It is volatile in which investors expect rapid changes in the price of the assets.
Very easy to hack.
Intense pressure of the community can be strong.
They have no investor verification and protection.
It’s project are immature and poses great risks.
They have limited guidelines and policies to prevent fraudulent activities.
There is practically no way of receiving your funds if your money gets lost in some ways.
Lack of transparency.
They are not insured.

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(3). List at least 1 ICO that is starting, is in development, or has ended. Explain the project of the development team and add information of interest.

Spectrecoin

(XSPEC) spectrecoin was developed based on the original shadow cash whitepaper. Spectrecoin is a crypto fork of shadowcash. The spectrecoin system was inspired by Tor and Hawala. Most crypto digital asset projects that start nowadays, they need funds or investors. And the only way of accessing this funds to support their systems is through ICOs. So,an ICO was launched in Nov 2016 to Jan 2017.

Asides the funding and developer, this project have built a wallet that is currently version 1.3.5 and the current development will result with version 1.4.

Spectrecoin as a cryptocurrency is aimed at privacy like physical cash. This digital asset features a proof of stake algorithm. The stake algorithm provides ring signatures for privacy and anonymity. Technically, the algorithm facilitates fast transactions and IP obscuring within the digital wallet. Spectrecoin has about 20 million initial supply and has no limited supply. Spectrecoin achieved it privacy through the use of the Tor network. So, all network level communication is done through the hidden services of the Tor network.
Spectrecoin had faced the scam title and ShadowCash clone. So, later in April 2017, the developers had abandoned ShadowCash and started Particl. As a result of that, the accusations against Spectrecoin stopped.