What is
an ICO? ICO is short for Initial coin offering and can be thought of as
the cryptocurrency equivalent of an Initial Public Offering (IPO).
With
the rise of the cryptocurrencies, an ICO is a new mechanism to raise
funds for amazing business developments and projects. To a person that
is already part of the “crypto world” it makes total sense. With this
explanation I hope to reach the granny who is knitting a sweater on her
rocking chair to the non millennial who has heard these terms and is
dying to get on the wave.
Basically,
Dapps (Decentralized Apps , a blockchain service or utility, built on
the Ethereum blockchain or any other programmable blockchain) use an ICO
to raise money and value the tokens (or coins) they will use in their
service/apps. Instead of shares, you receive tokens that are built on
the blockchain where stakeholders are also fund contributors. Those
tokens are then listed on private exchanges where their values are
determined based on factors such as supply and demand, what is happening
in the project and so forth. Simply put, an ICO is a process of raising
funds for startup companies. Simple right?
Startup
companies create a token specifically related to their company on the
blockchain. They then usually have a pre-sale where tokens are often
sold at a discount. They then have the main sale, called the public
sale, where tokens are sold at the full price. To protect anyone buying
in the public sale, pre-sale tokens are often locked up for a specific
period. You can think of the tokens as owning a share in the company,
except the token gives you no ownership rights nor do you really share
in the ‘profits’ of the company. Instead, you hope that your token value
will grow as the demand for it increases. The one advantage of an ICO
over an IPO is that you also will have the option to pay in
cryptocurrency, often Bitcoin and Ethereum.
Benchmark
Token is unique in that not only are you able to hold or trade your BMK
tokens, you can also swap these tokens for security tokens in one or
more of their amazing projects and actually share in the profits of
these ventures. It is the perfect combination of cryptocurrency and
real-world entrepreneurship.
Many ICO’s these days are built on the Ethereum blockchain and use ERC 20 tokens. What does that mean?
An
ERC20 token is a term used for smart contracts on the Ethereum
blockchain. In order to receive your tokens after you have purchased
them you need an ERC20 wallet. You cannot participate in token sales
directly from cryptocurrency exchanges and some wallets (especially
those where you do not have access to your private key).
There are a few compatible wallets known to accept ERC 20 tokens.
My EtherWallet (one of the most recommended)
MetaMask
Mist
Parity
MyEtherwallet + Ledger
MyEtherWaller + Trezor
INTRODUCING SONATA ICO
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For more information please visit:
Website: https://www.sonata.ai
Whitepaper:https://sonata.ai/documents/whitepaper-en.pdf
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DISCLAIMER:This post was brought to you by Opeyemi being my personal project on Sonata campaign project
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