An ICO is an Initial Coin Offering. All sorts of companies are using ICOs to raise money. People pay money, can be considered an investment, can be considered access to a service. But basically, the idea is you trade in your money and you get some digital tokens in return [ MUSIC ] [ NOISE ] They're doing it so that the people who buy the tokens, what they say is when the product's ready, they can go on their Internet platform and use these tokens to access the service. It might be a video game, it might be a messaging platform, but also a lot of people, the reality is they're just buying this as a speculative investment. [ MUSIC ] [ MUSIC ] Investing in an ICO. Most people are doing it because they're treating it as a way to get rich. They're hoping if this thing takes off, it will be the next Bitcoin. They're going to make a lot of money. Other people genuinely believe what the company's building. They like the idea of Building this platform and using their tokens one day to play in a game, or use a messaging platform, or buy cloud computing services. But for right now, I think most people are hoping they buy a lottery ticket. [ SOUND ] IPO and ICO sound the same, and they do have one thing in common. They're both ways for a company to raise money from a whole bunch of people. They're really different, though, in that An IPO, and there's a whole lot of regulation involved. The company's gotta go on a roadshow, file all sorts of documents. An ICO's just a Wild West. These are people who are just throwing up a website and saying, give me money. The plans for regulating ICOs are still Pretty new cuz ICO's are such a new thing. Governments are still getting their heads around it. They're saying they want to be careful and let this new form of financing flourish but also they want to protect the consumer. The US, the FCC's issued a big warning shot. China's banned them all together. Canada and Britain have also So put limitations on them, but for now, yes, they're legal provided they're actually digital tokens to use in a game or a platform. But in most cases, regulators are saying watch it. These things look a lot like securities, and if you're selling without a license we're gonna come after you. [ MUSIC ]

ICO: Everything You Need to Know