A Cryptocurrency ICO (Initial Coin Offering) is a means of crowd funding a new cryptocurrency. At least that is how it is described on Wikipedia. In simpler terms, an ICO is a way of funding a new technology or startup.

I will include links throughout this article where you can read further into items that have are already been fully detailed. The main point of writing this is to explain in layman’s terms what an ICO is so that anyone could understand. I personally like to use a lot of analogies and examples because I feel as a normal person those help build the visual picture in your mind of how something works that you may have never had experience with.

Lets say you have an idea for a new technology or business, in the past if you needed funding to further pursue this idea, you would fund it yourself, ask friends, family, or even go to a bank to apply for a loan. An ICO is the new way around the typical funding of the past. I personally believe the initial rise/idea of this was generated from websites such as gofundme and kickstarter. Add in anonymous, decentralized, cryptocurrency and the ICO was born.


How it works

Using an example of a current ICO lets discuss Polybius. Polybius has the goal of creating a banking institution with new principles and approach. But lets be real, creating a bank, challenging all the major banks that have been established for years would take some major funding. How could normal people ever accomplish this in the past? Hello ICO.

Starting on the 31st May 2017 the Polybius ICO opened and it concludes on the 30th of June 2017. During this time frame early investors can pay what essentially equates to $10 per PLBT coin. The PLBT coin is a new cryptocurrency created by the Polybius team. Holders of this coin will hope to achieve a few different things:

  1. Potential Profit: Once the ICO has ended this coin will be listed on various cryptocurrency exchanges where you can buy and sell it, similar to how traditional stocks work but with cryptocurrency. The hope for some early investors is that the coin would rise once it hits the exchanges and they are able to either generate an early profit or hold for future gains.
  2. Dividends: Polybius has stated that at the end of each financial year all PLBT coin holders will receive a portion, based on the amount of coins they hold, of 20% of the company’s profits.

The perks differ from ICO to ICO, so do your research.

Lets just think about this for a minute though, how cool would that be to be an initial investor in a banking institution!? I cannot stress this enough though, make sure you do your own research, these can be very volatile and there really is no safety net if the companies plans do not work out.

The group behind the ICO usually has milestones they would like to achieve via the funding and if their initial goal is not reached, the funders are typically refunded their investment. For instance, here are Polybius’s milestones:

Milestone 1 – $1.5 Million: Become an Authorized Payment Institution.

  • P2P Loans
  • Investment Portfolios
  • EBA Clearing
  • Swift Membership
  • EPC Rulebooks
  • API License
  • Payment Services

Milestone 2 – $3 Million: License for Electronic Money Institution.

  • Consumer and working Capital Loans
  • Foreign Exchange
  • Card Issuing and Payment Acquiring
  • EMI License

Milestone 3 – $6 Million: License for Commercial Banking.

  • Credit Cards
  • Savings Deposits
  • Open API Apps
  • Card Scheme Memberships
  • Bank License

Milestone 4 – $10 Million: Funding to create Digital Pass.

  • Blockchain
  • Big Data
  • Applied AI
  • Internet of Things
  • eSignatures
  • eSeals

Milestone 5 – $25 Million: SME Financial Marketplace

  • Venture Capital
  • Crowdfunding
  • Insurance
  • Brokerage

As of writing this Polybius has raised $24 million hitting their first 4 milestones and well on the way to hitting all 5 they set out to achieve at the start.


Research, Research, Research

All ICO’s usually start of with a traditional website explaining their goals and team. Using the Polybius example, check out their page, the majority of their team has a background in the cryptocurrency world. Generally they also have a board of advisors and what you should really look for here are industry professionals. If you are building a bank it only makes sense to have leaders from the banking industry advising your team.

Review everything from the look and feel of the website, check out the linkedin profiles of the people involved, read any news you can find (which we will try to provide with this new site). Then make the most educated decision you can.

As Peter Lynch states in the book One Up Wall Street, “Stick to the industries YOU know”. I have a background working for one of the top Accounting Software Institutions so I understand in pretty good detail how credit cards, payroll, and business loans work. But I personally wouldn’t invest in something that I have no industry experience.

Lastly, one item I suggest you be aware of is the amount of coins the company will create. In many cases, coins will only be created during the ICO, which gives you the peace of mind, that what you purchase will at least hopefully retain its value. I would always be wary of an ICO that has the fine print where they reserve the right to create coins after the ICO has ended. In some cases, there are good reasons for this, but make sure you understand all the details before investing.

The best scenario, which some ICO’s do, is the strategy of “burning” coins. For instance, they will use a portion of their profits yearly to purchase coins back from investors and will subsequently “burn” or destroy those purchased coins which will decrease the supply and increase the value the coins still in existence. This is like music to investor’s ears. Less coins = more value, Less coins = more value.



ICO = New way of funding an idea or business usually based on crypto technology. It provides a way for a business to gain funding and early investors help which in turn should generate a profit if the company is successful.

As this is one of our first articles here at CryptoFizz.com we ask for your constructive feedback and questions below in the comments. We do not claim to know everything or are perfect so if you have suggestions for improvements please let us know. Our goal here are Crypto Fizz is to help educate the cryptocurrency community and educate us at the same time. Cryptocurrency, while created 8 years ago in 2009 with the initial genesis block of Bitcoin, is still in its infancy, it is an exciting time and we are so happy to be a part of it.

Love, peace, and knowledge for all!

Jay – View Tutorials & Investment Strategies


Justin (Jay) is the co-founder of Crypto Fizz. Besides Crypto, I am a husband, father, and avid Everton/Yankees/Steelers supporter.

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