Blockchain and ICO FAQs

Michael Michaelides
Sep 6, 2018 · 4 min read

Which is better: Bitcoin or Ethereum?

Bitcoin and Ethereum are different entities or versions of a family using blockchain technology. They are set to establish themselves, driven by different intentions because they use different technologies. They’re as similar as comparing a cow with a banjo.

What is a Hard Cap?

A hard cap is the absolute upper limit a team will take. If a team receives donations exceeding their hard cap, the funds are immediately returned to investors.

What is a Soft Cap?

A soft cap is typically a lower limit, closer in terms to how much a team is aiming to raise. If a team doesn’t reach their soft cap, funds are sometimes returned back to investors. However, there is some ambiguity around a soft cap, and whether or not the team returns funds or decides to move forward regardless.

What is the difference between participating in a Pre-ICO instead of the ICO?

Firstly, congratulations! You are one of early investors in the project, showing your support and enthusiasm. Secondly, you are able to buy the tokens at a bargain price. By being involved from the beginning you are able to grow with the project, getting the latest news and updates compared to ICO investors who are able to invest in the offering based on available knowledge and token purchase prices given at the time.

What are Utility Tokens?

Utility tokens, also called user tokens or app coins, represent future access to a company’s product or service. The defining characteristic of utility tokens is that they are not designed as investments. If properly structured, this feature exempts utility tokens from federal laws governing securities.

What are Security Tokens?

If a crypto token derives its value from an external, tradable asset, it is classified as a security token and thus becomes subject to federal securities regulations. Failure to abide by these regulations could result in costly penalties and could threaten to derail a project. However, if a startup meets all its regulatory obligations, the security token classification creates the potential for a wide variety of applications, the most promising of which is the ability to issue tokens that represent shares of company stock.

What are gas fees?

All transactions on the Ethereum network cost gas: a fee that is paid to miners in order to process the transaction.

What is a miner?

Cryptocurrency mining is a process in which transactions for various forms of cryptocurrency are verified and added to the blockchain digital ledger. Cryptocurrency mining has increased both in activity as cryptocurrency usage itself has grown exponentially in the last few years.

What is the SEC?

Securities and Exchange Commission is an independent agency of the United States federal government. The SEC holds primary responsibility for enforcing the federal securities laws, proposing securities rules; and regulating the securities industry, the nation’s stock and options exchanges, and other activities and organizations, including the electronic securities markets in the United States.

What is Escrow?

An escrow is a contractual arrangement in which a third party receives and dispenses money or documents for the primary transacting parties, with the distribution dependent on conditions agreed to by the transacting parties.

What is an OTC Desk?

It is the ability to make large trades directly with a counterpart without having to go through the public order books. Through an OTC desk, traders are able to access digital currency liquidity without affecting the exchange market price.

What is a maker and taker?

It Market makers place new orders on the books and wait for another user to match them. They can be buys or sells. Market takers find existing orders on the books and fill them, thus taking orders off of the books.

What is an API?

An Application Program Interface is often the go-between interface between the end user and the data of an operating system, application, or other service.

What is Market Capitalization?

In crypto, market capitalization is defined as the available circulating supply of tokens multiplied by the current price of the token.

What are the risks of contributing to an ICO?

When you contribute to an ICO, there is never a guarantee that the product whose tokens you have purchased will succeed, either with their ICO or in their future development. Investors should think of contributing as a donation to a project in support of its potential development, and the tokens received as a kind of reward for your support. However, in the case of an ICO campaign, your token rewards have the potential to increase in value once the tokens are released and available on exchanges such as ours. BDXChange is working on asset-based ICOs and a liquidity-driven environment for all ICOs that work with us.

Are ICOs Legal?

In a decentralized financial world, currency options are infinite in scope and are not always physical. This means that whilst governments strive to monitor and approve legal tender for use in specific countries, not all currencies are subject to this precedent. We work with governments and countries with an approved regulatory framework for ICOs.

BDXAlliance

Our goal is to bring #cryptocurrency one step closer to mainstream customers and ensure you can use it easily and every day. We will deliver this through our exchange, where you’ll quickly be able to convert from/to fiat/crypto.

Michael Michaelides

Written by

BDXAlliance

Our goal is to bring #cryptocurrency one step closer to mainstream customers and ensure you can use it easily and every day. We will deliver this through our exchange, where you’ll quickly be able to convert from/to fiat/crypto.

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