Initial Coin Offering, or ICO, is a hot topic in the cryptocurrency world. It is a way to raise a lot of money lately and it is a good investment, too. So, it is crucial to make the difference between a coin offering and a cryptocurrency. ICO is a crypto unit of value, which stores a piece of a business idea. Or, in other words, when a startup or a company decides to launch a new business initiative, it sells financial entities to boost its budget. The ICO is a good way to fundraise a startup, similar to venture capital or selling shares on the financial market.
What is the difference between ICO and IPO?
The concept of the ICO is indeed quite alike the Initial Public Offering (IPO) one. A fundamental difference is that an IPO marks an equity stake of a company; buying one means you own a part of the company. This is not the case with the ICO, though. ICO’s goal is to collect money for a certain business idea and then to become a tradable unit. When the crowd sale is complete, the Offering might become a cryptocurrency as it is the case with Ethereum and its native tokens Ethers, for instance. Other essential difference is that the ICO is tokenized, it is a crypto offering and includes less paperwork and regulations.
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Also, check out these 5 super innovative green ICO’s.
*Video content posted on CryptoFrog is under the Creative Commons License. Credit goes to Siraj Laval.