Terms used in ICO

ICO (Initial Coin Offering) project, what is it?

The abbreviation ICO is translated into Russian as “initial placement of coins”. On the ICO project, crypto coins are issued, which then become new ideas for financial instruments. Today, this is one of the options for attracting large investments in completely new technological blockchain projects by selling liquid cryptocurrencies or tokens to investors. The holders of such cryptocurrencies, in turn, expect to receive and increase their income in the face of cryptocurrencies.

ICO Terminology

The White Paper is the main document on the ICO project, which describes in detail the essence of the token (project), business plan, strategy, opportunities, operating principles, product sales methods, advertising campaign, prospects and market overview of competitors.

Roadmap - consists of the history of the implementation and development of the project and is included in the White Paper. It also includes planned stages with prescribed deadlines for the completion of each stage in chronological order from the moment the project was born.

A platform for an ICO project is hardware and software that allows you to open a project and start issuing tokens. The most popular platforms today are Waves and Ethereum.

Token is a digital payment coin that is issued by a specific blockchain project and has a unique exchange rate that is set and regulated by the creators of the project. They issue tokens in order to attract large investors for projects. The token is the internal currency of the project, which holders can convert at exchange offices, on exchanges, as well as into another cryptocurrency. Unlike other coins, they are not mined, since the issue is carried out by a project that sells tokens. Many tokens are based on the Ethereum blockchain network known to us. There are three types of tokens:

• Utility - these tokens are used as a game currency, for ordering various kinds of services and are sold during a crowdsale.
• Security investment tokens entitle investors to participate in the distribution of project income in any form.
• Asset-backed tokens act as a digital receipt for real goods or services. They can be equated to a couple of grams of gold or a square matter of housing.

Tokensale is a period of sale of tokens on an ICO project.

Ticker is an abbreviation of a token on a project or on exchanges. For example, Shiba Inu has SHIBA token, Litecoin has LTC.

Crowdsale is identical to the concept of ICO. This is the purchase of project tokens by investors, who, as a result of the purchase, receive the right to vote and a personal part of the income. When buying, investors do not count on making a profit, but only on further work with them in the system of work.

Presale is the primary, test stage of an ICO, where investments are collected, shortcomings are identified, and a limited sale of tokens takes place. The limit is set so that in the future the project will take place without problems.

Pre-ICO is a pre-ICO. In case of a lack of funds to open a full-fledged project, the developers attract investments and funds to the pre-ICO site, which will later be redirected to organising a full-fledged ICO.

Bounty is a variant of an advertising campaign (referral program), in which the user is charged a percentage of money for his contribution to the development of the project. For example, ICO developers provide an opportunity to receive tokens for performing various tasks: creating and promoting advertising content, online translation of documentation, registering on websites, commenting on forums, searching for bugs in prescribed programs, and much more.

Airdrop is one of the techniques in the advertising campaign of the ICO project. Its essence is that users can get cryptocurrency for free and much faster than in a bounty company. Tokens will be issued for activity in the social networks of the project and registration on the official website.

DAO is a unique, decentralised investment platform based on smart contract technologies. Users can choose startups of interest and invest in their development in order to further withdraw profits.

Blockchain is a sequential chain (database) of interconnected blocks. Each of the blocks contains a link to the previous block and a unique timestamp, so they are linked. This principle of the blockchain was presented by Satoshi Nakamoto, which later became the basis for all cryptocurrency transactions with Bitcoin. The integrity of the chain and the chronology of events are the foundations of reliability for cryptography.

A block (Genesis block) is a certain amount of verified information that is collected in one cell (block). The extraction of all cryptocurrencies begins with the work with the zero block.

Buyback is an inverse buyback of tokens, which is negotiated in advance between the issuing company and the cryptocurrency holder.

Cryptography is a science in the mathematical field that studies methods and options for ensuring maximum confidentiality, secrecy and authentication of user data. The principle of cryptography is the encryption of plain text with a special algorithm or key. Cryptography in the cryptocurrency industry is used to prevent hacking someone else's wallet and withdrawing funds from it, as well as disrupting the chain of interconnected blocks.

The token standard means that the token conforms to all software protocols. The most popular token standards are ERC-20 and ERC-223 (Ethereum Request for Comments), which are based on the Ethereum blockchain.

Mining is an operation, the process of mining cryptocurrencies.

A farm is an association of several powerful computer devices for cryptocurrency mining.

Asic - equipment for mining (cryptocurrency mining).

Smart contract is a specific algorithm of actions that is carried out on the blockchain and other projects. The essence of such an algorithm is that it is responsible for automating the transaction between the buyer and the seller, without the intervention of third parties.

Hard cap is the maximum level of sale of tokens that ICO developers are counting on. When the hard cap has taken place, the token sale is declared closed.

Soft cap - the minimum level of investment that is necessary to start the project, if the minimum level is not reached, then it is impossible to start the project. If the soft cap is not reached, then the money is returned to all investors.

Premine are crypto-coins that are not mined but laid in a zero block. They are paid out on bounty companies and airdrops.

Soft fork (User Activated Soft Fork (UASF) is a clone of the cryptocurrency you have already created, for its further improvement. The essence and principle of the system does not change, only modernization takes place.

Pump is a pre-planned mass purchase of cryptocurrency. The purpose of such an action is to artificially create a shortage and increase demand for cryptocurrency, and as a result, sell it at a much higher price than it was before the shortage began.

Hashrate is the efficiency ratio of your farm. The higher the hash rate, the more cryptocurrencies can be mined.

A transaction (secret key) is confidential initial data about the chain of blocks where money is transferred between user accounts (wallets).

A masternode is a specialist developer who maintains the computing power of cryptocurrency systems.

A node is a computer that is connected to the network of a certain cryptocurrency and synchronised with it. The nodes double-check and control the chain of transactions, which increases the security of the user.

Peer to peer (P2P) is a system that broadcasts the transactions of all participants, without the intervention of banks and other third parties. Users interact with each other as a close-knit community.

Jurisdiction is a set of officially confirmed documents that indicate the country where the legal entity of the ICO project was registered.