# What the hell is an ico?

https://ip.bitcointalk.org/?u=http%3A%2F%2Fi.imgur.com%2Fvue7b3D.jpg%3F1&t=578&c=iCgFy2m17jaaNA

So an ICO, stands for Initial Crowd  Offering . In other words is a new crypto coin pertaining to Ethereum.  Ok slow down,  so Ethereum is effectively a gate to allow people to convert Ethereum into a new crypto.  So the laymen definition is, some Joe blow  will create a web site like :

> www.mycoin.com

The site will be something like:   

> This is a unique coin that uses blockchain that allows u to share your goods, like car and phone with other people on the network using hashing technology with some fancy white paper.  So without babbling the site would have:

> 1.  Swanky Intro - CEO super man worked at Ethereum and thats all need to know.

https://media4.giphy.com/media/h2MLtoOjxtkGY/200w.gif#5-grid1

Convince the crowd he/she worked with one success.

> 2 - White paper explain the technology at such a high level to really convince you we go this fleshed out. When in actuality there will be many hurdles.

https://media4.giphy.com/media/5qRwLvbI3k3aU/200w.gif#11-grid1

>3 - Pick a date and offer limit number of coins to be released to the crowd and advertise on the site and others.

https://media2.giphy.com/media/XvZ8PJ4DSqzSM/200.gif#1-grid1

Thats pretty much it on the prep work side.   So either the ICO can raise many for funding of the work to be done in sign with the site paper or they can build something that actual does what it saids it will do to an extend. So here is the code for creating a new coin and its shockingly few lines of code to tell people where to send the atheneums to get the coin.  There is no regulators and there is not checking of doe the new ICO do what the white paper said and are the people working it really those people.

There have been many fraundulent  coin stories, the best one was around  TokenCard (TKN)

https://files.coinmarketcap.com/static/img/coins/32x32/tokencard.png

This post on https://www.reddit.com/r/ethtrader/comments/68v619/i_know_this_has_been_said_many_times_but_please/

talks about how 8thbit lost 250 eth.  awwww  u could have bought a really nice  car (75k)

The investor had used a slack channel and obtained the address to send the Ethereum too that was posted by a scam artist and when he checked the site the information was different, a cold sweat was felt very quickly. So never trust chat rooms emails , make sure you check the site.  Its ok to wait a bit if the site is down as it happens when the sale of the coin opens and there is only a limited number.

https://media0.giphy.com/media/buo13B5A49Lxe/giphy.gif

These are the types of bad stories I have heard.  So to really summarize you can copy this project and change several lines of code after a few hours ur ready to ICO Danny's pizza coin:  https://github.com/TokenMarketNet/ico

From an engineer point is not complex and founders can lie or slightly exaggerate what they have, so its best to pay someone or get some you know look at the source, its the source of truth.

# WHY WOULD YOU INVEST IN ICO?

There is a good chance of huge upside, lets look at an ICO previously had its initial offering:

# Stratis
There is a period of when this coin could be bought, it was June 21 - July 26, 2016
The total obtained from sale was  $598,684.5
Profit since the sale was 450 percent

https://stratisplatform.com/wp-content/uploads/2016/08/Stratis_Logo_Gradient.png

So just form this one example u can see huge upside, there are some coins that have stayed the same price and gone negative, but if speed ur risk then u will make money in this market.

So if the above does not make sense think of an ICO, as a way to raise money for a project, similar to a startup pitching to a crowd and convincing investors they need backing.

I hope you enjoyed my attempted at explaining  ICOs.