Initial Coin Offering (IPCO or ICO) is a popular way to raise money for a new cryptocurrency project by distributing a percentage of the initial coin supply among the early supporters and backers. An IPCO solves the problem of initial coin distribution, since the supply goes to whoever has given money for the project development. It has been controversial owing to a number of scams, but many successful cryptocurrencies were funded through an IPCO. Some of the popular cryptocurrencies using this model include Ethereum, Bitshares, NXT, Mastercoin, Factom, etc.
ICOs have properties resembling stocks, and therefore new projects starting from Ethereum have classified their IPCOs as ‘Software Pre-sales’ instead and believe they follow the crowdfunding model instead of an IPO model, where payments are received not for an equitable share in the enterprise but for a license to run the software.
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