Many people don't even know what the term of initial coin offering means. Although, if you know what a digital currency is, the term is very simple.
Every project should start somewhere, and also needs money to get it start up, and an ICO is a perfect way to raise funds for these developments. A new digital currency is very often not created by a team of developers who are looking to start a new project. They tell the wider spread community about this project using a whitepaper that includes all the key details and information and they hope that people will back the project and invest their money or funds in it.
Backers are usually investment firms who see that some potential in the project, so they contribute money to help the new project launch. In return, they will get a share of the initial coin tokens of the new currency, with the hope of the new project being successful and the tokens becoming worth more than the money that they have invested initially. This is a good way to fund a new project as not only as money raising, but it also helps in distributing the initial coins in an ordered and clear method.
The first ICO was created in July of 2014 and was started by Ethereal. Although it was the first ICO in creation, till nowadays it is still the most successful, raising a startup 18M to help it launch and then stay maintained throughout its life.
Since the very first ICO in creation was so successful in being funded and taking off, other developers soon also started creating, and many more ICOs were followed in the same year, with more and more appearing every year.
The amount of ICOs possible to fund shows no sign of slowing down in the near future, with multiple projects at a time requiring funding. Due to the great demand for this new project now, it is hardly surprising that not all of the projects succeed.
A very few people that know about them, then the less chance there will be other people or businesses that are interesting in backing and funding them.
Those that are successful although enable those that invested to make back their money, and also can to include their own ideas in the development of the new digital currency.