ICO

Many developers have chosen Ethereum as the main platform to kickstart new projects; at the center of this, we have ICOs, which stands for “Initial Coin Offering” (there are other names as well but this is the most prevalent), similar to IPOs (initial public offerings, minus all the securities stuff, but that’s an on-going point of contingency).

ICOs are essentially a fundraising mechanism that allows a person/investor to receive a token in exchange for another well-known digital currency like Ether or Bitcoin. Typically, ICOs on the Ethereum network issue ERC20-compatible tokens to its users via smart contracts (barring the organization/individual holding the ICO from creating more tokens than originally specified in the initial contract); this allows developers to take advantage of the security the Ethereum protocol provides, minus all the additional technical overhead and complexity.¹

[1] https://medium.com/blockchannel/understanding-the-ethereum-ico-token-hype-429481278f45