Blockchain: Is it a hype or a hoax?  7

Overview of ICO

• An initial coin offering (ICO) is the cryptocurrency industry’s equiva-

lent of an initial public offering. ICOs act as a way to raise funds,

where a company is looking to raise money to create a new coin, app,

or service by means of launching an ICO.

• Interested investors can buy into the offering and receive a new cryp-

tocurrency token issued by the company. This token may have some

utility in using the product or service the company is offering, or it

may just represent a stake in the company or project.

• Some of the sites to track the ICO statistics are:

⚬

⚬https://icodrops.com/category/active-ico/

⚬

⚬https://www.crypto-rating.com/ico-rating/

How does blockchain work?

1. Blocks are chained together through each block containing the hash

digest of the previous block’s header.

2. If a previously published block were changed, it would have a differ-

ent hash.

3. This in turn would cause all subsequent blocks to also have different

hashes since they include the hash of the previous block.

4. This makes it possible to easily detect and reject altered blocks.

5. This makes it possible to create a chain of connected blocks, i.e.,

blockchain (Figure 1.3).

Block Header

0

Timestamp

Nonce

Hash of Block Data

Block Data

(Hardcoded data)

Genesis Block

Block Header

Hash (Previous Block Header)

Timestamp

Nonce

Hash of Block Data

Block Data

(Transaction List etc.)

Block01

Block Header

Hash (Block01 Header)

Timestamp

Nonce

Hash of Block Data

Block Data

(Transaction List etc.)

Block02

Genesis Block

Block Header

Hash (Previous Block Header)

Timestamp

Nonce

Hash of Block Data

Block Data

Block01

Block Header

Hash (Previous Block Header)

Timestamp

Nonce

Hash of Block Data

Block Data

Block02

Block Header

Hash (Previous Block Header)

Timestamp

Nonce

Hash of Block Data

Block Data

Figure 1.3  How does blockchain work?