![images-26.jpg](https://res.cloudinary.com/hpiynhbhq/image/upload/v1519580716/wdgwzvksluqyl9waklm9.jpg) [Credit](https://encrypted-tbn2.gstatic.com/images?q=tbn:ANd9GcT0wSb5NPYcUVH65xxGN37_esCFX2cINlGlHlrkXUAlCPv3HNLqanZMo8MtlQ)

Hello guys, @pasaift here. 
Today I want to enlighten us a bit about ICO'S, as I know  we've all been hearing been hearing about different  ICO'S  launch and we may really have no idea about what's going on. 
ICO is an acronym for initial coin offering. It is a means of crowd funding centered around  creation of a new cryptocurrency. Basically, it's a means by which someone offers an investor some units of a new cryptocurrency or token in exchange for other cryptocurrencies like bitcoin and Ethereum or even fiat. These received funds are used in funding the  creation of the new coin. 

To give a simple illustration, let's say a guy Mr. A has this idea for the creation of a new cryptocurrency, which details of sender and reciever would be encrypted during transactions. He calls this coin Acoin. But now, Mr.A has a challenge. He doesn't actually have the money needed for creating this coin, neither does he have a collateral to offer to a bank. So what does Mr. A do?
 
**Solution**
![images-7.png](https://res.cloudinary.com/hpiynhbhq/image/upload/v1519580927/mgdkm0glkqmexn73l9vh.png) [Credit](https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcRhRCr-1Dz6aTp7FjPb1ewGEXmCbuqDxpkxkVWHLlPWo4vBkoAE)

He creates a document called the white paper. This white paper gives details of how this Acoin is going to function, and how the system would operate. Mr. A could also open up a site, which would tell the public why this coin would be of importance, how much is needed to fund the project,and how much has been raised so far. Then ask them to send you money, and in return you give them some Acoin.

## Why do people participate in  ICO deals?
![images-27.jpg](https://res.cloudinary.com/hpiynhbhq/image/upload/v1519581166/xrwtb9neklpggbs5wksd.jpg) [Credit](gstatics.com)


During the time Mr. A exchanges Acoin for other cryptocurrencies, Acoin is probably worthless. But with time, this coin is generally used and it's supply increases. Well so does the value increase also. So those who participated in the ICO have made their profits having gotten the coin at a very cheap rate.



So when next you hear of an ICO, look through the white paper, do your research. Not all that glitter is gold. If satisfied with what you see, then feel free to dive in as there is lots of profits to be made from ICO'S

Remain Blessed. ![DQmNuF3L71zzxAyJB7Lk37yBqjBRo2uafTAudFDLzsoRV5L.gif](https://res.cloudinary.com/hpiynhbhq/image/upload/v1519581278/sqessil6cimed8tzvhpx.gif) @pasaift