Learning the friendly way

Comprendre la valeur nette

Que vous soyez investisseur, épargnant ou que vous souhaitiez simplement mieux gérer votre budget, connaître votre valeur nette est une étape essentielle pour prendre le contrôle de votre situation financière. Cette donnée vous donne une vision claire de votre patrimoine et vous aide à prendre des décisions plus éclairées.

Contrairement au revenu, qui reflète ce que vous gagnez à un moment donné, la valeur nette donne une vue d’ensemble à long terme en tenant compte de ce que vous possédez (vos actifs) et ce que vous devez (vos dettes).

Quels éléments influencent votre valeur nette ?

Vos revenus

Le revenu regroupe vos différentes sources de gains : salaire, investissements, revenus secondaires… Plus vous gagnez, plus vous avez de potentiel pour augmenter votre patrimoine. Mais l’accumulation de richesse ne dépend pas seulement de ce que vous gagnez : elle repose aussi sur votre gestion des dépenses.

Vos actifs

Les actifs sont tout ce que vous possédez qui a de la valeur : épargne, biens immobiliers, portefeuille d’investissement, voiture… Diversifier vos actifs et miser sur ceux qui prennent de la valeur peut contribuer à faire croître votre patrimoine.

Vos dettes

Les dettes diminuent votre valeur nette. Elles incluent : prêts immobiliers, crédits à la consommation, soldes de cartes de crédit, etc. Réduire vos dettes, notamment celles avec des taux d’intérêt élevés, améliore mécaniquement votre valeur nette.

💡 Pour calculer votre valeur nette :
Valeur nette = Total des actifs – Total des dettes

Comment calculer sa valeur nette ?

Voici les étapes à suivre :

1. Listez vos actifs : incluez vos comptes bancaires, biens, investissements, etc.
2. Additionnez vos dettes : crédits en cours, prêts étudiants, factures impayées…
3. Soustrayez vos dettes de vos actifs : le résultat est votre valeur nette.

Exemple de valeur nette positive

Prenons le cas de Sarah :

Actifs :

• Maison : 400 000 €
• Épargne : 50 000 €
• Portefeuille d’investissement : 150 000 €
• Compte retraite : 200 000 €
• Voiture : 20 000 €
  → Total : 820 000 €

Dettes :

• Crédit immobilier : 200 000 €
• Prêt étudiant : 30 000 €
  → Total : 230 000 €

👉 Valeur nette = 820 000 € – 230 000 € = 590 000 €

Exemple de valeur nette négative

Prenons maintenant le cas de Mark :

Actifs :

• Voiture : 10 000 €
• Effets personnels : 5 000 €
  → Total : 15 000 €

Dettes :

• Prêt étudiant : 50 000 €
• Crédit carte bancaire : 8 000 €
• Factures médicales : 3 000 €
  → Total : 61 000 €

👉 Valeur nette = 15 000 € – 61 000 € = –46 000 €

Pourquoi chercher à augmenter sa valeur nette ?

🔒 Sécurité financière

Un patrimoine plus solide vous protège face aux imprévus : perte d’emploi, dépenses urgentes…

🎯 Réalisation de vos objectifs

Acheter un logement, créer une entreprise, préparer votre retraite… Tous ces projets deviennent plus accessibles avec une valeur nette en croissance.

📈 Construction de patrimoine

Augmenter sa valeur nette, c’est aussi se constituer un patrimoine durable à transmettre ou à faire fructifier.

🧠 Meilleures opportunités financières

Une valeur nette élevée améliore votre capacité d’emprunt et l'accès à des produits financiers avantageux.

🛠️ Plus de liberté

Un patrimoine solide vous permet de faire des choix en fonction de vos projets, sans être freiné par des contraintes financières.

☁️ Tranquillité d’esprit

Savoir que votre situation s’améliore réduit le stress et vous aide à planifier sereinement.

Conseils pour améliorer votre valeur nette

Gérez vos revenus et dépenses

• Développez de nouvelles sources de revenus
• Maîtrisez vos dépenses
• Épargnez régulièrement

Faites croître vos actifs

• Diversifiez vos investissements
• Renseignez-vous sur les opportunités dans l'immobilier, les actions, etc.

Réduisez vos dettes

• Priorisez le remboursement des dettes à taux élevé
• Réunifiez vos crédits si nécessaire
• Respectez un plan de remboursement clair

Planifiez à long terme

• Constituez une épargne de secours
• Anticipez votre retraite
• Envisagez de vous faire accompagner par un expert

En conclusion

Comprendre et suivre votre valeur nette est essentiel pour piloter vos finances et poser des bases solides pour l’avenir. Que vous soyez en phase de démarrage ou en pleine croissance financière, ce simple indicateur peut vous guider et vous encourager à faire les bons choix.

👉 Votre valeur nette n’est pas juste un chiffre. C’est le reflet de vos progrès financiers – et un outil pour façonner l’avenir que vous souhaitez.

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Que vous soyez fidèle à votre écran d’ordinateur ou adepte du smartphone, vous vous êtes sûrement déjà demandé comment insérer le symbole de la livre sterling (£) dans un document, un email ou un message. Ne cherchez plus — ce guide pratique vous montre comment taper rapidement le symbole £ sur Mac, PC ou mobile.

💡 Et si vous devez envoyer des livres sterling à l’étranger, Tap vous permet de transférer des fonds facilement avec des frais réduits et un excellent taux de change. Envoyez, dépensez ou échangez des GBP ou EUR depuis l’app, partout dans le monde — et gratuitement entre utilisateurs Tap.

D’où vient le symbole de la livre sterling ?

La livre sterling (GBP), symbolisée par £, possède une histoire riche de plus de 1 200 ans. À l’origine, elle représentait un poids d’argent dans l’Angleterre anglo-saxonne. Elle est devenue monnaie officielle en 1694 sous le règne de Guillaume III.

Avec l’expansion de l’Empire britannique, la livre a gagné une importance mondiale. Même après des événements majeurs comme les guerres, la dévaluation de 1967 ou encore le Brexit, elle reste une devise clé de l’économie mondiale.

Selon la Banque d’Angleterre, le symbole £ vient de la lettre L, initiale du mot latin libra, qui signifiait « une livre de monnaie ». L’ajout de la barre horizontale (le trait du £) remonte au moins à 1660, sur un ancien chèque conservé par la banque.

📌 En anglais, le symbole £ est toujours placé avant le montant : par exemple, £10 signifie dix livres. Petite anecdote : en 1970, un billet de £20 représentant William Shakespeare a été émis — une tradition est née, celle d’honorer des figures emblématiques sur les billets et pièces.

Comment insérer le symbole £ dans un document ?

Maintenant que vous connaissez son origine, voyons comment taper le symbole £ selon l’appareil que vous utilisez.

Sur Mac

Le raccourci le plus rapide est :Option (ou Alt sur certains claviers) + 3

Cette combinaison fonctionne sur les claviers européens. Si vous avez un clavier américain, vous devrez peut-être ajuster votre configuration régionale pour activer les symboles monétaires européens.

Sur Windows

Sur la plupart des claviers Windows, utilisez simplement :Alt + 0163 (en utilisant le pavé numérique)

Ou, si vous avez un clavier britannique :Maj + 3 vous donnera directement le symbole £, souvent visible juste au-dessus du chiffre.

💡 Vous pouvez aussi copier-coller ce symbole directement ici : £

Sur smartphone (iOS ou Android)

Sur votre clavier mobile, appuyez sur le bouton ?123 ou symbole, puis cherchez le £ dans les options.

Si vous ne le voyez pas immédiatement :

• Maintenez le doigt appuyé sur le symbole $ (dollar)
• D’autres symboles monétaires apparaîtront, dont £

Sans clavier ? Aucun souci

Si vous utilisez Microsoft Word ou Google Docs, vous pouvez insérer le symbole sans taper quoi que ce soit.

Voici comment faire :

1. Dans Word, cliquez sur Insertion > Symbole > recherchez £
2. Dans Google Docs, allez dans Insertion > Caractères spéciaux > puis sélectionnez la catégorie Monnaie

Cliquez sur le symbole £ pour l’insérer dans votre texte.

Et voilà !

Vous savez désormais comment insérer le symbole £ facilement, que vous soyez sur ordinateur ou sur téléphone. Que ce soit pour un mail professionnel, une facture ou un post sur les réseaux, vous êtes prêt·e à taper £ en toute simplicité

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Vous connaissez peut-être déjà l’achat et la vente de cryptomonnaies, mais avez-vous déjà entendu parler des airdrops ? Ces distributions gratuites de tokens sont en réalité des stratégies marketing visant à faire connaître un projet blockchain. Elles permettent de toucher une large audience et de créer de l’engagement. Explorons ensemble comment fonctionnent les airdrops et ce qu’ils peuvent réellement apporter.

Qu’est-ce qu’un airdrop crypto ?

Un airdrop crypto, c’est lorsqu’un projet distribue gratuitement ses tokens natifs à des utilisateurs — souvent pour attirer l’attention, élargir sa communauté ou encourager l’adoption. En clair : de la crypto gratuite, parfois en échange d’une petite action (suivre un compte, s’inscrire à une newsletter), parfois sans rien faire du tout.

Les tokens sont transférés dans les portefeuilles des utilisateurs existants ou potentiels. Cette technique a explosé lors du boom des ICOs en 2017, et reste encore largement utilisée. Même si ces tokens sont donnés gratuitement, leur valeur peut augmenter avec le temps — ce qui les rend parfois très intéressants pour les détenteurs.

C’est aussi une méthode pour augmenter le nombre de portefeuilles actifs (un bon indicateur pour les nouveaux projets) et favoriser la décentralisation en élargissant la détention des tokens.

Comment fonctionne un airdrop crypto ?

Les airdrops sont souvent planifiés dans la feuille de route d’un projet et se déclenchent après avoir atteint certains objectifs. Les modalités varient, mais en général, de petites quantités de tokens (souvent sur Ethereum ou une autre blockchain compatible avec les smart contracts) sont envoyées à plusieurs portefeuilles.

Certains airdrops sont entièrement gratuits, d’autres demandent de remplir quelques conditions : s’abonner à un canal Telegram, relayer un post sur X, ou simplement détenir un certain nombre de tokens.

Un airdrop bien pensé génère souvent du bouche-à-oreille autour du projet avant même sa cotation sur un exchange.

Quelle est la différence entre un ICO et un airdrop ?

Même s’ils sont tous deux liés au lancement de nouveaux projets crypto, la différence est claire :

• Un ICO (Initial Coin Offering) demande aux participants d’acheter des tokens, généralement pour lever des fonds.
• Un airdrop, lui, consiste à distribuer gratuitement des tokens, sans engagement financier.

Les ICO sont donc des moyens de financement, tandis que les airdrops sont des outils marketing.

Quels sont les différents types d’airdrops ?

Il existe plusieurs formes d’airdrops. Voici les plus courants :

Airdrops exclusifs

Réservés aux utilisateurs précoces ou aux membres actifs de la communauté, ces airdrops récompensent la fidélité. Exemple célèbre : Uniswap, qui a distribué 400 UNI à chaque portefeuille ayant interagi avec la plateforme avant une certaine date. Ces tokens de gouvernance donnaient un droit de vote sur les décisions du projet.

Airdrops “bounty”

Ces airdrops exigent une participation active : suivre des comptes, partager des contenus, inviter des amis, etc. Le projet peut demander une preuve d’engagement avant de distribuer les tokens.

Airdrops pour détenteurs (holders)

Ici, seuls les portefeuilles détenant déjà des tokens du projet sont récompensés. Le projet effectue une capture d’écran (snapshot) des soldes à un moment donné, et distribue des tokens aux portefeuilles éligibles.

Certains projets utilisent aussi des airdrops pour attirer des utilisateurs d’autres blockchains. En 2016, par exemple, Stellar (XLM) a distribué 3 milliards de XLM aux détenteurs de Bitcoin, dans l’idée d’élargir sa base d’utilisateurs.

Les risques liés aux airdrops

Comme souvent dans l’univers crypto, tout n’est pas toujours rose. Les airdrops attirent aussi des acteurs malveillants.

Exemples de scams courants :

• Vous recevez des tokens inconnus dans votre portefeuille. En les bougeant, votre portefeuille est vidé.
• Un faux projet vous incite à connecter votre wallet à une plateforme frauduleuse. Résultat : vos données privées sont récupérées.

⚠️ Un airdrop légitime ne vous demandera jamais de payer quoi que ce soit, ni de fournir votre seed phrase ou clé privée. Restez toujours vigilant et faites vos propres recherches (DYOR).

Autre point à surveiller :

Un airdrop massif peut fausser la perception de la popularité d’un projet. Si un token est envoyé à des milliers de wallets mais n’est quasiment jamais échangé, attention au miroir aux alouettes. Assurez-vous que le volume de trading réel correspond au nombre d’utilisateurs actifs.

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Yield farming is a method to generate more crypto with your crypto holdings. The process involves you lending your digital assets to others by means of the power of computer programs known as smart contracts.

Cryptocurrency holders have the option of leaving their assets idle in a wallet or binding them into a smart contract to assist with liquidity. Yield farming allows you to benefit and gain rewards from your cryptocurrency without spending any more of it. Sounds quite easy, right?

Well, hold on because it isn't that straightforward and we are just getting started. 

Yield farmers employ highly advanced tactics in order to improve returns.

They constantly move their cryptocurrencies among a variety of lending markets in order to optimize their returns. After a quick Google search, you would wonder why there isn't more content surrounding strategies and why these yield farmers are so tight-lipped about the greatest yield farming procedures.

Well, the answer is quite simple: the more people are informed about a strategy, the less effective it becomes. Yield farming is the lawless territory of Decentralized Finance (DeFi), where farmers compete for the opportunity to grow the highest-yield crops. 

As of November 2021, there is $269 billion in crypto assets locked in DeFi, gaining an impressive almost 27% in value compared to the previous month of October.

The DeFi yield farming rise shows that the excitement in the crypto market has extended far beyond community- and culture-based meme tokens and planted itself in the centre of the hype. What exactly does it take to be a yield farmer?

What kinds of yields can you anticipate? Where do you start If you're considering becoming a yield farmer?  Here, we'll guide you through everything you need to know.

What is Yield Farming? 

Also referred to as liquidity farming, yield farming is a method for generating profits using your cryptocurrency holdings instead of leaving them idle in an account on a crypto website. In a nutshell, it involves bidding cryptocurrency assets into platforms that offer lending and borrowing services and earning a reward for it.

Yield farming is similar to bank loans or bonds in that you must pay back the money with interest when the loan is due. Yield farming works the same way, but this time, the banks are replaced in this scenario by crypto holders like yourself in a decentralized environment. Yield farming is a form of cryptocurrency investment in which "idle cryptocurrencies" that would have otherwise been held on an exchange or hot wallet are utilized to provide liquidity in DeFi protocols in exchange for a return. 

Yield farming is not possible without liquidity pools or liquidity farming. But, what is a liquidity pool? It's basically a smart contract that contains funds. Liquidity pools are working with users called liquidity providers (LP) that add funds to liquidity pools. Find more information about liquidity pools, liquidity providers, and the automated market maker model below.

How Does Yield Farming Work?

Liquidity pools (smart contracts filled with cash) are used by yield farming platforms to offer trustless methods for crypto investors to make passive revenue by loaning out their funds or crypto using smart contracts.

Similar to how people create bonds to pay off a house and then pay the bank interest for the loan, users can tap into a decentralized loan pool to pay for the bonds.

Yield farming is a type of investment that involves the use of a liquidity provider and a liquidity pool in order to run a DeFi market. 

• A liquidity provider is a person or company who puts money into a smart contract.
• The liquidity pool is a smart contract filled with cash. 

Liquidity providers (LPs), also known as market makers, are in charge of staking funds in liquidity pools enabling sellers and purchasers to transact conveniently by executing a buyer-seller agreement utilizing smart contracts. LPs earn a reward for providing liquidity to the pool. Yield farming is based on liquidity providers and liquidity pools, which are the foundations of yield farming. These work by staking or lending crypto assets on DeFi protocols to earn incentives, interest or additional cryptocurrency. It's similar to how venture capital firms invest in high-yield equities, which is the practice of investing in equities that offer better long term results. 

Yield farmers will frequently shuffle their money between diverse protocols in search of high yields. For this reason, DeFi platforms may also use other economic incentives to entice more capital onto their platform as higher liquidity tends to attract more liquidity. The method of distribution of the rewards will be determined by the specific implementation of the protocol. By yield farming law, the liquidity providers get compensated for the amount of liquidity they contribute to the pool.

How Are Yield Farming Returns Calculated?

Estimated yield returns are calculated on an annualized model. This estimates the returns that you could expect throughout a year. The primary difference between them is that annual percentage rates (APR) don't consider compound interest, while annual percentage yield (APY) does. Compounding is the process of reinvesting current profits to achieve greater results (i.e. returns).  Most calculation models are simply estimates. It is difficult to accurately calculate returns on yield farming because it is a dynamic market and the rewards can fluctuate rapidly leading to a drop in profitability. The market is quite volatile and risky for both borrowers and lenders.

Before Getting Started, Understand The Risks Of Yield Farming

Despite the obvious potential benefits, yield farming has its challenges. Yield farming isn't easy. The most successful yield farming techniques are quite complex, recommended only to advanced users or experts who have done their research.

Here are the different risks: 

Smart contract

Smart contracts are computerized agreements that automatically implement the terms of the agreement between parties and predefined rules. Smart contracts remove intermediaries, are less expensive to operate and are a safer way to conduct transactions. However, they are vulnerable to attack vectors and bugs in the code.

Liquidation risks 

DeFi platforms, like traditional finance platforms, use customer deposits to create liquidity in their markets. However, if the collateral's value falls below the loan's price, you would be liquidated. Collateral is subject to volatility, and debt positions are vulnerable to under-collateralization in market fluctuations.

If you borrow XX collateralized by YY a rise in the value of XX would force the loan to be liquidated since the collateral YY value would be inferior to the value of the XX loan.

DeFi Rug Pulls

In most cases, rug pulls are obvious exit scams that are intended to entice investors with a well-manufactured promising project in order to attract investors. 

A crypto rug pull happens when developers create a token paired with a valuable cryptocurrency. When funds flow into the project and the price rises, developers then seize as much liquidity they can get their hands on resulting in losses for the investors left in. 

Impermanent loss

Impermanent loss happens when a liquidity provider deposits their crypto into a liquidity pool and the price changes within a few days. The amount of money lost as a result of that change is what is called an impermanent loss. This situation is counter-intuitive yet crucial for liquidity providers to comprehend.

Exercise Caution When Getting Into Yield Farming

If you have no prior knowledge of the cryptocurrency world, entering into the yield farming production may be a hazardous endeavour. You might lose everything you've put into the project. Yield farming is a fast-paced and volatile industry. If you want to venture into yield farming, make sure you don't put more money in than you can afford, there's a reason why the United Kingdom has recently implemented serious crypto regulations.

What The Future Holds For Yield Farming

We hope that after reading this article you will have a much deeper understanding of yield farming and that it answered some of your burning questions.

In summary, yield farming uses investors' funds to create liquidity in the market in exchange for returns. It has significant potential for growth, but it's not without its faults.

What else might the decentralized financial revolution have in store for us? It's difficult to anticipate what future applications may emerge based on these present components. However, trustless liquidity protocols and other DeFi technologies are driving finance, cryptoeconomics, and computer science forward.

Certainly, DeFi money markets have the ability to contribute to the development of a more open and inclusive financial system that is accessible to everyone with an Internet connection. 

As you navigate the waters of the cryptocurrency market you're likely to come across a term called "coin burning". In this article, we're exploring the process used to manage the token supply of projects, a means for companies to manually alter the supply (and thereby demand) of a token's circulating supply. While not adopted by every project, coin burning has proven over the years to be successful in increasing the price of a digital currency.

What Is A Coin Burn

Diving right in, a coin burn is the process of removing a certain number of tokens from circulation by sending them to an invalid address, a "black hole" of sorts. This process is written into the project's code and implemented at various increments as outlined in the whitepaper. While Bitcoin doesn't make use of coin burning, many projects on the Ethereum network, particularly ERC-20 tokens, have been known to implement it.

Through the use of a smart contract, also known as a burn function, the network would remove a specified number of tokens from circulation, decreasing the total supply and thereby (hopefully) increasing the demand. Coin burns have been known to lead to an increase in price, as the supply-demand ratio is altered.

An Example Of Coin Burning

A top 10 cryptocurrency project underwent a coin burn last year that is believed to be the biggest layer 1 token burn to date. 88.7 million LUNA, the native coin to the Terra project, were burned in November 2021 following a vote by the community. This was effectively worth $4.5 billion at the time. A few days following the coin burn the LUNA token hit a new record high. 

The burn aimed to remove value from Terra’s community pool, but in reality, it simply moved the value from the pool to the individual holders of the cryptocurrency.

Bitcoin Cash and Stellar are two other high profile cryptocurrencies that have made use of the coin burning initiative. Shiba Inu is another cryptocurrency to have undergone a coin burn, although this wasn't the initial intention of the project. The project's developers gifted half of the SHIB supply to Ethereum creator Vitalik Buterin, who went on to donate 10% and burn the remaining 90%.

How Does Coin Burning Work?

Should a project wish to implement a coin burn they will need to create a smart contract. Smart contracts are digital agreements that execute when certain criteria have been met. Say a project wants to implement a coin burn every 200,000 blocks, they will create the burn function to include this instruction.

When this milestone is achieved, the coins will automatically move from the designated wallet to a wallet address that does not have a private key. Without a private key, these coins can never be recovered. The coins will then be sent from the one wallet address to the other and effectively be removed from circulation. The transaction (burn) will be added to the network's blockchain records and be available to view through the blockchain explorer.

The Downside To Coin Burning

Before you invest in a project that undergoes coin burning it is important to note that coin burning does not guarantee an increase in the coin's price. The increase in price will depend on the network, the market climate and the current sentiment. During the Shiba Inu coin burn, while the price rose considerably, it soon returned to a more stable and substantially lower level.

Coin burning can also be used by ill acting developers to deceive the community. Say a project has a total supply of 100 million tokens and allocates 10 million to the platform's developers. They could then burn 40 million tokens, increasing their hold to 60% of the circulating supply on the network.

As with all transactions conducted on the blockchain, all payments are irreversible meaning that once you burn coins they can never be recovered.

What Is Proof Of Burn?

Not to be confused with coin burning, Proof of Burn (PoB) is a consensus mechanism similar to Proof of Work and Proof of Stake. The model utilizes an element of coin burning in its mining practice and is known to use considerably less energy than its PoW counterpart.

The process requires miners to burn tokens in order to participate in the mining process. The more coins burned the more blocks they can create, meaning the more rewards (in the form of transaction fees) they can earn. Miners are still required to use mining hardware. The benefit of this is to provide a less energy-intensive blockchain network that can run optimally through a network of decentralized mining participants.

ICO is an abbreviation for Initial Coin Offering, a term coined supposedly in 2013 yet only gained popularity in 2017. ICOs were created as a method of raising funds for cryptocurrency projects in a crowdfunding manner. When people partake in an ICO, through funding it, they receive "shares" of that project in the form of cryptocurrency tokens.

This method is set up to help new projects find funding to build their project, platforms, or products. It's very similar to investing in a start-up in the hopes of a project becoming bigger and better through your investment contribution.

Mastercoin was the first ICO recorded back in 2013, raising a grand total of 5,120 BTC. Shortly after, Ethereum followed, and in 2014 raised roughly $18 million to build their project. There is clearly a great deal of success to be seen through ICOs, so let's see what all the fuss is about.

ICO vs IPO vs IEO

Let's look at IPOs, or initial public offerings, to learn more about where ICOs originated.

Similar to ICOs, IPOs were created as a way of gaining capital to better the businesses' infrastructures. While they are similar to a crowdfunding aspect,the primary distinction is in how investors are rewarded. IPOs will offer their investors shares, while ICOs offer digital currencies that can be used within their ecosystems or can be sold when the price increases.

Now that we understand how ICOs and IPOs work, let's discuss the differences when it comes to IEOs, or Initial Exchange Offerings. Again, this is another method used to raise funds for upcoming projects, but there are some key aspects that make IEOs different to IPOs and ICOs. While IEOs are also a crowdfunding method in the cryptocurrency industry, they use an exchange. Anyone can generally buy tokens from an ICO page, whereas IEOs use exchanges as the distribution mechanism.

In order to take part in an IEO, you must be a registered user of the exchange that the project is utilizing. While IEOs may be more transparent, they do push us towards a more centralized approach. There are also IDOs, Initial Dex Offering, Dex standing for decentralized exchange (increasing the data privacy aspect), but that's a topic for another day.

How they work

So now we know what ICOs are and how they differ from their counterparts, but now let's delve deeper into how ICOs actually work. As stated, ICOs are a way for cryptocurrency projects to raise money. When a project decides to launch an ICO it will generally underline the sale dates, the participation rules, and the buying process.

Usually, investors will need to choose currencies they are happy to accept in exchange for their tokens, such as Mastercoin accepting Bitcoin. There are some ICOs who will also accept fiat currencies as payment.

The projects' core purpose, its timeline, and how much money is needed to succeed should be released in their whitepaper. If the project does not raise enough money to meet the minimum funds needed, the money should be returned to those who contributed. This would classify the ICO as unsuccessful.

If the funding goal is met, the project will continue to pursue its original goals and contributors will be able to claim their tokens further along. Tokens will either be listed on notable exchanges later on or will be distributed using smart contract technology,This is something you should do more study on before contributing to an ICO.

Advantages and disadvantages

While ICOs have proven to be a massive benefit to project developers, there are some underlying issues and risks that may come into play. In order to give you the best chance of understanding ICOs we will need to cover all the pros and cons that come with ICOs. So let's see what you have to look out for:

Pros

        High potential profits

        Accessible to anyone (unlike IEOs)

        Money returned if unsuccessful (smart contacts)

        Transparency on fund usage (Blockchain)

        High liquidity

Cons

        No intrinsic value

        No legal guarantees

        Potential fraud

Frequently asked questions

Now that we have covered the basics, there are some additional questions the internet has and we thought we would take the time to answer them for you. These are the most frequently asked questions about ICOs, and while we have answered some here is a more TL;DR breakdown:

What does ICO mean?

ICO stands for Initial Coin Offering, a phrase coined by the cryptocurrency industry.

What is the purpose of an ICO?

ICO is a method used to raise funds for up and coming projects, think of it as an early investment phase.

How do I get an ICO?

That depends on the ICO you want to partake in, you will generally need to sign up to the ICO, deposit funds, and wait for the tokens to be distributed either through an exchange or smart contract. This differs depending on the projects' ICO parameters.

Is Bitcoin an ICO?

No, Bitcoin required no funding, tokens were mined and sold without the need for crowdfunding.

How many ICOs are there?

There is no definitive number out there but consensus shows that there have been roughly over 7,000 businesses that have attempted ICOs.

Are ICOs safe?

This is a tricky question and depends greatly on the individual project that is hosting an ICO, whether they are using smart contact technology, and how legitimate the team behind it is. ICOs can be safe, but they also carry risks, it is always best to do your own research before investing.

As there is no universal authority on ICOs there is certainly a lack of regulation in the space so be sure to do thorough research before parting ways with your money.

Closing Thoughts

That is all the essential information you need to grasp in order to better understand what an ICO is. From the textbook definition to its competitors, how it works, and everything in between. ICOs are popular for a reason, they offer a range of benefits to both projects and investors, but you should keep in mind that there is no benefit without risk.

While we can explain what an ICO is, we can not tell you whether to invest in an ICO. It's important to vet the project for yourself and see if it aligns with your interests, and more importantly if it has all the key components for a legitimate project and token.

While the world is increasingly accepting of ICOs from both businesses and retail investors standpoints, there are several alternatives available. We briefly discussed IEOs and IDOs, but more crowdfunding methods have flourished from the origins of ICOs, so be sure to explore those out too. At the end of the day, we hope we helped you better understand what an ICO is.