Cryptocurrency is a digital or virtual currency that uses cryptography to manage transactions, control the creation of new units, and verify the transfer of assets. Bitcoin was created in 2009 as the first open-source software cryptocurrency that has grown into a giant and is now worth over $10,000 each.
Firms create tokens in an initial coin offering (ICO). These ICOs have become a popular way to fund new projects. The ICO process does not come without risks, though, and many startups have raised millions with millions of dollars of investor cash and then fallen apart soon afterward.
ICOs are financial instruments, just like a stock or bonds. They are similar in that they can be issued through an initial public offering (IPO) to raise capital. However, they differ because they do not involve traditional share trading within public markets on exchanges like the New York Stock Exchange (NYSE) or Nasdaq.
ICOs lack the legal and regulatory safeguards one might expect from public markets.
Rather than being regulated, ICOs are not overseen by the SEC or other regulatory bodies. Instead, they are virtually anonymous and have no oversight as to whether they’re legitimate or fraudulent. While they’re not illegal by any means, ICOs seem to lack transparency and regulation compared to what many people expected when the first cryptocurrency was launched almost ten years ago.
When was it invented?
The first cryptocurrency is called Bitcoin and was created in 2009 by a group of individuals operating under the pseudonym of Satoshi Nakamoto. The cryptocurrency has experienced rapid growth since its initial launch and is worth $10,000 each. Its price doubled in just the past year from ~$666 to ~ USD 1867.
Where did it come from?
Satoshi Nakamoto’s white paper released in 2008 described how his currency would work but didn’t delve into why he created it or how he envisioned its purpose. In 2010, he left the development of the money and moved on to other projects. The project itself pretty much fell apart for about three years.
How is it created?
There are two ways an ICO can be used: issuance of tokens through an IPO or mining additional coins, which are then used as rewards for mining blocks on the blockchain.
Dil Bole Oberoi
