An ICO, or initial coin offering, is a new phenomenon that has emerged from crowdfunding, cryptocurrency, and blockchain technologies. Also known as a “crowdsale”, an ICO is when a company releases its own cryptocurrency with the purpose of funding.

Typically, companies will release a pre-defined number of crypto-tokens (whatever their “unit” of currency may be), then sell those tokens to an intended audience.

During an ICO, companies usually exchange their cryptocurrency for Bitcoins. However, some ICOs involve the exchange of fiat money as well.

The end result of an ICO is similar to the end result of an IPO: the company gets capital it can use to continue growing its technology, while the public gets access to shares in the company. Now, both parties have an incentive to see the cryptocurrency grow.