The ICO market and the cryptocurrencies such as Bitcoin, Ethereum and others give another chance to the business community to take part in successful digital economy projects. But how to use new opportunities wisely? What is better to invest in: in the mining of the cryptocurrency or ICO? In order to understand this, you need to consider each of the options separately.
What is ICO?
In order to understand the benefits of investing in ICO, you need to know the basic concepts and milestones of this process. It is an analog of IPO (initial public offering of shares). The difference is that during the ICO the companies issue not the shares, but for cryptocurrency tokens. This is usually done on the crypto exchange. Its advantage is that the cost of an ICO is about ten and sometimes twenty times less than a classic IPO ($10-20 thousand for an ICO against a minimum of $200 thousand for an IPO).
In this case, the results in both cases can be equivalent. By the way, Bitcoin did not have ICO but investment in bitcoin is still very popular. ICO is mainly used by start-ups, which are at the beginning of their journey into big business. For them, this is, in fact, crowdfunding. But beginners somehow need to declare themselves, so the first thing the company does is announcement.
What Is Blockchain?
The term blockchain partially characterizes its tasks and purpose. It turns out that blockchain is a chain of blocks. And not just a simple chain as it maintains a strict sequence. Blocks are data about transactions and contracts within the system presented in a cryptographic form. Initially, the blockchain was and still is the basis of bitcoin. All the blocks are lined up, that is, connected. To record a new block, you need to consistently receive information about the old blocks.
All the data in the blockchain are accumulated and form a constantly updated database. From this database, nothing can be removed or replaced. And it is “limitless” – there can be written an infinite number of transactions. This is one of the main features of the blockchain.
What is Mining?
The process of receiving of bitcoin and many other cryptocurrencies is called mining. This process is the activity to maintain the network by closing and creating blocks in blockchain using computing power. Mining supports network operation, it guarantees its protection against duplicate transactions.
For bitcoin and a number of other currencies, this is the only way to increase emissions. Miners receive remuneration as their activities ensure the functioning and integrity of the entire system. This is the main task of mining. At the initial stages, mining could be conducted by the owner of almost any computer using the power of the processor.