Advantages of IEOs

IEO is otherwise known as Initial Exchange Offering. It is a derivative of the ICO (Initial Coin Offering). The developer's mint produces tokens for their projects which will then be sent to the exchange and eventually sell to individual contributors, however it is subject to the agreement between the developer and the exchange, where the conditions are favored with an ICO but can be arranged with IEO. And two of the conditions are controlling individual's contribution and placing a stable price for the token. The IEO participant must sign up an account with the exchange and send token to its account. As the IEO kicks in, the participant can buy token straight from the exchange.

Steps to join in an IEO

It starts by checking whether the project you are going to raise funds are actually conducting an IEO operation or otherwise. If indeed it is, then follow the steps below:

• Look for the right exchange conducting an IEO. Plenty of participating exchanges are present.
• Sign up an account with the exchange & pass other requirements.
• You should know which cryptocurrency are acceptable during the IEO activity. Also, you must put up an appropriate funds in your account.
• Watch out for the opening of the IEO so you can buy tokens.

Benefits of an exchange

Running an exchange has been a profitable endeavor from trading fees alone, but incumbents are faced with increasing competition for users and their trade flows. The following are some of the benefits accrued to an exchange which facilitates IEOs:

• IEO or listing fees. Individual exchange may vary.
• An avalanche of new users and deposits. It's expected that some users may or may not be loyal.
• Joint marketing with the IEO team.

Definition of a token

Token is defined as a unit value and definitely not a currency. You don't need to create their own blockchain but the token will depend on an existing blockchain of a cryptocurrency like BTC or ETH, unlike cryptocurrency it has its own blockchain. However, the token is fungible and tradable, thus the token value can be in a form of coins or points. The tokens are necessary in an IEO or ICO activity because it is used as a medium to fundraising. The token you will buy serves as a cryptocurrency asset or equity which will give you all the rights on what to do with your token.

What is the token type?

Security Token - is regarded as an equity and is issued when a startup that doesn't require crypto technology. The purchase of such is deemed to be an investment because it represents ownership.
Utility Token - it represents as the right to buy a product / avail a service. This token is not an investment at all.

How can a token be used?

In the case of security tokens, their most common use is as a fundraising vehicle in IEOs:

• As a form payment between mutually agreeing parties who regarded token as a new form of currency.
• Ownership of assets in its digital form.
• Accounting for activities do E digitally.
• As a reward to active participants.
• As a way to protect the network.
• Access to extra services.
• Giving an excellent and a user friendly experience.
• And many more yet to be discovered.

Definition of a cryptocurrency

Cryptocurrency is a virtual currency that is created to act a medium of exchange between investors and investees, wherein the record of an individual coin is kept in a computerized database called ledger. This is safe as it uses a cryptography function in order to operate financial transactions over the internet. Likewise, it isn't under the control of an authority so basically no interference from the government. The transfer of cryptocurrency requires a processing charge though it can be sent directly through the use of private or public keys/addresses which are stored up in a digital wallet.

How do cryptocurrencies work?

Cryptocurrency as a medium of exchange allows exchanging one cryptocurrency to another ; purchasing & selling of coins; and exchanging fiat money to cryptocurrency. The rate of coins and tokens are determined by a Cryptocurrency Exchange as they set the rate for each currency. Although, the rate would also depend on various factors. Cryptocurrency Exchange has their own intentions individually. Some exchanges are intended for crypto-fiat exchange and some are for traders by the latter allows you to purchase & sell crypto with reduced commission fees.

How to purchase cryptocurrencies?

In order to purchase cryptocurrency, you must have a digital wallet. It is available online wherein you can keep your currencies. Apart from that, you need to sign up an account on a Cryptocurrency Exchange. Once you have an already verified account, you can now start to transfer real money in order to purchase cryptocurrencies of your choice.

Definition of a cryptocurrency exchange

Cryptocurrency Exchange is an online business allowing customers (buyers and sellers) to trade cryptocurrencies for other assets like fiat money or other digital currencies.

What are the types of exchanges?

There are three types of cryptocurrency exchanges:

• Trading Platforms: Allows to connect between buyers & sellers.
• Brokers: Sells cryptocurrency at a price set by brokers.
• Direct Trading: Offers peer to peer trading, allowing users to exchange currencies around the globe and also the buyer & seller settle on one price.

What are the requirements for cryptocurrency exchanges?

The laws of every country pertaining to Cryptocurrency Exchange vary. It is important to follow the regulations set by the government for ease in operation as it generally adheres to the customer 's protection.

• Anti Money Laundering (AML) Act – This is to prevent dirty activities related to money coming in as a legit one.
• Know Your Customer (KYC) law – This is a due diligence process to make sure you know your customers and also to safeguard other existing customers including the transaction & it's integrity.