Everything About Initial Coin Offering
Are you new to Initial Coin Offering and confused about all the terms? Don’t worry because this article will explain everything about initial coin offering’s terms that you need to know. Most importantly, if you are planning to invest or create one, you definitely need to know about ICO!
What is the difference between pre-sale and public ICOs?
Pre-sale are often raised similar to how Venture Capital funding works. However, it’s open to only accredited investors that are willing to give a large sum.
Public ICOs run like crowdsourcing events which are open to the public for any amount. Also, you don’t need to be accredited and can give as little or much as you want.
What is whitelist?
Whitelist is a list whereby the ICO investor is an early bird to invest on that particular ICO. To make the interested investor in the first row and also to prevent the rush on it, whitelisting is used. For some ICO, you also need to pass KYC process rather than just activating email. By joining the whitelist, you can participate on that ICO and will be notified earlier than non whitelisted investors.
What is KYC for?
KYC stands for Know Your Customer which is to verify your identity. There are various documents you can use, like a internationally recognized passport, identity card or driver’s license.
The next step is to verify one’s country of residence, you can use an utility bill, bank statement or official government letter that shows your address.
What is the difference between soft and hard cap?
The soft cap is the capital amount gathered at which the crowd-sale event will be considered successful.
The hard cap of an ICO means the maximum amount of capital that it is raising.
What is a WhitePaper?
It’s a piece of article written by the developers to explain in detail what their project and coin is all about.
In short, it is a blueprint of the entire project.
What is an ERC20 token?
ERC20 is a technical-standard used for smart contracts on the Ethereum blockchain for implementing tokens. ERC stands for Ethereum Request for Comment and 20 is the number that was assigned to this request.
Sending tokens will typically take 50,000 gas to 100,000 gas so the total TX fee increases to 0.001 ETH – 0.002 ETH
What is a smart contract?
A smart contract (or crypto contract) is a program that executes a set of conditions defined by the creator of the contract. It is smart because the software is doing something automatically once the conditions are met. It’s generally stored using the blockchain technology.
The benefit of a smart contract is that technologies like blockchain and cryptography ensure the execution of a peer-to-peer contract without needing to involve lawyers and trust. That is why it’s decentralized.