# Explain the Concept of 'Initial Coin Offering' (ICO) ⎊ Path

**Published:** 2025-12-04
**Author:** Greeks.live
**Categories:** Path

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## Explain the Concept of ‘Initial Coin Offering’ (ICO).

An Initial Coin Offering (ICO) is a fundraising method used by cryptocurrency startups to raise capital. In an ICO, a company sells a new cryptocurrency token to early investors in exchange for established cryptocurrencies like Bitcoin or Ether.

It is analogous to an Initial Public Offering (IPO) in traditional finance, but without the stringent regulatory requirements. ICOs were a popular, but often risky, way for projects to bootstrap development and create a community.

- [What Is the Difference between an IPO and a Security Token Offering (STO)?](https://learn.greeks.live/path/what-is-the-difference-between-an-ipo-and-a-security-token-offering-sto/)

- [How Does an Initial Exchange Offering (IEO) Differ from an ICO?](https://learn.greeks.live/path/how-does-an-initial-exchange-offering-ieo-differ-from-an-ico/)

- [What Is an Initial Coin Offering (ICO) and How Does It Relate to Dapps?](https://learn.greeks.live/path/what-is-an-initial-coin-offering-ico-and-how-does-it-relate-to-dapps/)

- [What Is an Initial Coin Offering (ICO) and How Does It Relate to Tokens?](https://learn.greeks.live/path/what-is-an-initial-coin-offering-ico-and-how-does-it-relate-to-tokens/)

- [What Is a ‘Security Token Offering’ (STO)?](https://learn.greeks.live/path/what-is-a-security-token-offering-sto/)

- [How Does the Speed of Fundraising in an ICO Compare to Traditional Methods?](https://learn.greeks.live/path/how-does-the-speed-of-fundraising-in-an-ico-compare-to-traditional-methods/)

- [How Does a Reverse ICO Differ from a Traditional Initial Coin Offering (ICO)?](https://learn.greeks.live/path/how-does-a-reverse-ico-differ-from-a-traditional-initial-coin-offering-ico/)

- [What Are the Risks for Investors in an ICO Compared to an IPO?](https://learn.greeks.live/path/what-are-the-risks-for-investors-in-an-ico-compared-to-an-ipo/)

## Glossar

### [Initial Public Offering](https://learn.greeks.live/area/initial-public-offering/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Legitimacy ⎊ A formal listing process, whether a traditional IPO or a regulated Direct Listing, confers a degree of market legitimacy upon the issuing entity or asset.

### [Initial Coin Offering (ICO)](https://learn.greeks.live/area/initial-coin-offering-ico/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Issuance ⎊ An Initial Coin Offering (ICO) is a method of digital asset Issuance where a project raises capital by selling a new cryptocurrency or token to early investors, typically in exchange for established cryptocurrencies like Bitcoin or Ether.

## Discover More

### [How Does the Price Volatility of the Coin Affect the Attacker's Risk-Reward Calculation?](https://learn.greeks.live/path/how-does-the-price-volatility-of-the-coin-affect-the-attackers-risk-reward-calculation/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does the Price Volatility of the Coin Affect the Attacker's Risk-Reward Calculation?](https://learn.greeks.live/wp-content/uploads/2025/10/Microstructure-Analysis-of-Digital-Asset-Settlement-Mechanisms-Through-Option-Delta-Hedging-Protocols.webp)

High volatility makes the double-spent profit uncertain; a price drop can render the attack unprofitable.

### [Can a Reverse ICO Token Be Classified as a Security, and What Test Determines This?](https://learn.greeks.live/path/can-a-reverse-ico-token-be-classified-as-a-security-and-what-test-determines-this/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Can a Reverse ICO Token Be Classified as a Security, and What Test Determines This?](https://learn.greeks.live/wp-content/uploads/2025/10/Macro-View-of-Token-Collateralization-Mechanism-Securing-Decentralized-Finance-Options-Structures.webp)

Yes, if it meets the Howey Test criteria: investment of money, common enterprise, expectation of profit from others' efforts.

### [What Are the Primary Benefits for an Established Company Conducting a Reverse ICO?](https://learn.greeks.live/path/what-are-the-primary-benefits-for-an-established-company-conducting-a-reverse-ico/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Are the Primary Benefits for an Established Company Conducting a Reverse ICO?](https://learn.greeks.live/wp-content/uploads/2025/10/Precision-Machined-Substrate-Interfaces-for-Decentralized-Finance-Option-Primitives-Execution.webp)

Benefits include new revenue streams, enhanced customer engagement, non-dilutive capital, and leveraging existing brand reputation.

### [How Can Investors Protect Themselves from ICO Scams?](https://learn.greeks.live/path/how-can-investors-protect-themselves-from-ico-scams/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Can Investors Protect Themselves from ICO Scams?](https://learn.greeks.live/wp-content/uploads/2025/10/Precision-Instrument-Modeling-for-Decentralized-Finance-Volatility-Surface-Calibration-Analysis.webp)

Protect yourself from ICO scams by researching the team, whitepaper, and project thoroughly.

### [What Is an Initial Coin Offering (ICO) and How Does It Relate to Dapps?](https://learn.greeks.live/path/what-is-an-initial-coin-offering-ico-and-how-does-it-relate-to-dapps/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is an Initial Coin Offering (ICO) and How Does It Relate to Dapps?](https://learn.greeks.live/wp-content/uploads/2025/10/Macro-Examination-of-Black-Ceramic-Ball-Bearing-Integrated-into-Decentralized-Finance-Ledger-Substrate-Structure.webp)

An ICO is a fundraising method where a dApp project issues tokens to the public to finance its development and grant utility.

### [What Is an Initial Coin Offering (ICO) and How Does It Relate to Tokens?](https://learn.greeks.live/path/what-is-an-initial-coin-offering-ico-and-how-does-it-relate-to-tokens/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is an Initial Coin Offering (ICO) and How Does It Relate to Tokens?](https://learn.greeks.live/wp-content/uploads/2025/10/Teal-Oblate-Spheroid-Interfacing-Complex-Black-Blade-Analogous-to-DeFi-Rebalancing-Mechanism.webp)

ICOs are a crypto fundraising method where new project tokens are sold to early investors for capital.

### [Can a Privacy Coin Project Still Be KYC-compliant at the Team Level?](https://learn.greeks.live/path/can-a-privacy-coin-project-still-be-kyc-compliant-at-the-team-level/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Can a Privacy Coin Project Still Be KYC-compliant at the Team Level?](https://learn.greeks.live/wp-content/uploads/2025/10/Macro-View-of-Digital-Asset-Custody-Mechanism-Coupling-with-Off-Exchange-Tokenized-Security-Settlement.webp)

Yes, the team can be KYC-verified, but the coin's protocol still enables anonymous transactions, complicating AML.

### [What Is the Economic Incentive for an Attacker to Execute a 51% Attack on a Small Coin?](https://learn.greeks.live/path/what-is-the-economic-incentive-for-an-attacker-to-execute-a-51-attack-on-a-small-coin/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Economic Incentive for an Attacker to Execute a 51% Attack on a Small Coin?](https://learn.greeks.live/wp-content/uploads/2025/10/Biomimetic-Shell-Enclosure-Revealing-Modular-Storage-for-Digital-Asset-Collateralization-Protocols.webp)

The incentive is double-spending: reversing a deposit transaction to an exchange to gain another asset while keeping the original coins.

### [How Does a Security Token Offering (STO) Differ from an ICO?](https://learn.greeks.live/path/how-does-a-security-token-offering-sto-differ-from-an-ico/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a Security Token Offering (STO) Differ from an ICO?](https://learn.greeks.live/wp-content/uploads/2025/10/Hydrophobic-Surface-Tension-Modeling-in-High-Frequency-Crypto-Derivative-Liquidity-Provision.webp)

STOs offer regulated security tokens with legal compliance (KYC/AML); ICOs offer generally unregulated tokens.

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**Original URL:** https://learn.greeks.live/learn/explain-the-concept-of-initial-coin-offering-ico/
