Simple ICO: the Basics
Although smart contracts have been around for quite a while, their concept still remains somewhat of a mindbender for the average user. This series of articles aims to shed some light on the purpose and working principles of the selected smart contracts supported by Smartz platform thus providing you with a simple explanation in relation to each of them. Today’s article is dedicated to the Simple ICO, a smart contract designed for the ICO-related purposes, most notably — fundraising.
For those who’ve been living under a rock for the last couple of years, ICO (an Initial Coin Offering) is a fundraising mechanism that allows projects to sell tokens used within their network in exchange for cryptocurrency — be it Ether or Bitcoin — although in our case we’re talking about Ether. A token issued through an ICO basically represents a unit of value that can be exchanged for the services provided by the project or serve as a reward for the users who display their engagement in the project by performing certain activities. Broadly speaking, tokens can be thought of as the project’s inner currency, although such understanding is incomplete — the real nature of a token depends on the the economic logic behind and the project’s business model in general. In case of Ethereum, most ICOs are launched on the ERC20 token we’ve discussed earlier.
As a means of crowdfunding ICOs have many considerable advantages over other fundraising mechanisms: for instance, ICOs allow fundraisers to avoid mediatories (who obviously represent one of the major disadvantages of IPOs), moreover, fundraisers don’t have to yield shares in their company to investors. As for tokenholders, the advantages of an ICO as an investment platform are obvious, especially given the fact that the price of token depends almost solely on their engagement in the project.
So if you are planning on launching an ICO, the first thing you need is a smart contract that will allow to manage and distribute the tokens released on the platform, and that’s when you have to make a big decision: either you write your own smart contract or resort to someone else’s help. Doing everything on your own might seem a better option at first glance, but there are many hidden pitfalls: the creation of a conventional smart contract for an ICO is expensive and demands provision of high security (that said, contract code is rather complex); at the same time, such a contract is difficult to correct after bugs are detected. Even if the contract code is written by professionals, everything can go wrong — and that’s then your Ether gets stolen by a random guy.
So provided that you are not entirely sure about your programming skills, it’s better to use someone else’s solution that has already proven its reliability — and that’s when Simple ICO comes into play. Simple ICO undertakes all issues related to the creation and deployment of smart contract, whilst all keys are owned by the business — the platform just serves as a mediator. It should also be pointed out that Simple ICO is a smart contract with basic functionality — such features like specifying the terms of different ICO stages and token allocation as well as accepting any other currency than ETH (including fiat currencies) are not included in the smart contract itself, but can be added subsequently by a third party developer.
The deployment of a Simple ICO on the Smartz platform is actually not that big of a deal even for a non-tech savvy person: if it is the first smart-contract you’re working with, you can use a simple step-by-step guide on how to deploy relatively similar smart contracts. You can also visit this page to learn more about the functions of the Simple ICO and the details of its deployment in general. The whole process can be best described as intuitive, since both mentioned guides are self-explanatory.
Check out our website if you want to know more about the project. More info on the supported smart contracts will follow. Stay tuned!
