What is ICO? The difference between ICO and IPO

What is ICO?

ICO (Initial coin offering) is a form of legally raising investment capital through cryptocurrencies using Blockchain technology platform. In ICO, a certain amount of cryptocurrencies will be offered to investors ( payment by bitcoin or ethereum) to create a development premise for the company, as well as to evaluate the value of the project and that kind of cryptocurrency.

After the end of the sale one-week of tokens of cryptocurrencies (Crowdsale), the cryptocurrency will be listed to users can exchange with each other on the platform. The decision to list on the floor depends on the company’s development strategy.

Talking about “ICO” term, it is probably not too difficult for those who have participated in the stock market to understand. To be able to list stocks on an exchange, companies must go through the Initial Public Offering (IPO) stage to raise funds from investors by issuing shares for the first time. The next process between ICO and IPO is almost the same, the company will continue to grow its business by providing products of commercial value to the market (upgrade versions, change business strategies, etc.). …), that would increase the value of cryptocurrencies or stocks.

The difference between ICO and IPO

ICO

ICO is the form that start-up startups use to sell fundraising tokens, often only giving out their project plans, vision, and development ambitions. For this period, investors can only own a certain currency to exchange, trade, or exchange for other currencies and cannot be used for other purposes. In addition, investors buying tokens will not have ownership of the issuer when investing in an ICO.

An outstanding advantage in ICOs that many investors are interested in is that the ICO does not need to comply with any legal framework or legal protocol. Therefore, the process of operation of the ICO can start at any time and anyone can participate.

When investing in the ICO stage, investors will be provided with a number of cryptocurrencies corresponding to the price that can increase day by day thanks to the trust in the project of the public.

IPO

In contrast to ICO, only businesses that are established and put into operation for a time, have a certain profit, bank account, and have significant business achievements are allowed to use and have to perform. IPO listing on the stock exchange. Thereby, the shares will be converted and become an official ownership component of the investors.

Not as free as ICO, the process of IPO is a bit more complicated because it is legal and is strictly monitored and monitored by the Government.

In an ICO, the boundary between investors, regulators, and issuers is not as specific and distinct as an IPO.

Each project in ICO and IPO has its advantages and disadvantages. Therefore, before you start investing, NEEBank recommends that you should study thoroughly and clearly distinguish ICOs and IPOs so that you can minimize risks and easily succeed in the world of cryptocurrencies.