What is ICO?
ICO (Initial Coin Offering) is a legal form of raising investment capital through cryptocurrencies using Blockchain technology.
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During the ICO period, a certain amount of cryptocurrency will be offered to investors (usually paid in bitcoin or ethereum) to create a premise for the company’s development, as well as evaluate the value of the project. and that cryptocurrency.
After the end of the token sale of cryptocurrencies (Crowdsale) 1 week, that cryptocurrency will be listed on exchanges where users can exchange with each other. Deciding which exchange to list on depends on the company’s development strategy.
Referring to the term “ICO”, perhaps not too difficult to understand for those who have ever participated in the stock market. To be able to list shares on an exchange, companies have to go through an IPO (Initial Public Offering) 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 the business by providing commercially valuable products to the market (version upgrade, business strategy change, etc.) …), that will increase the value of the cryptocurrency or the stock.
Difference between ICO and IPO
What is ICO?
ICOs are the form that startups use to sell tokens to raise funds, usually just stating their project plans, vision, and growth ambitions. For this stage, investors can only own a certain currency unit to exchange, buy, sell or exchange for other currencies, not to be used for other purposes.
In addition, investors who buy tokens will not have ownership of the issuing company when investing in the ICO.
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One outstanding advantage in ICO that many investors enjoy is that the ICO does not need to comply with any regulatory framework or regulatory protocol. Therefore, the ICO process can start at any time and anyone can participate.
When investing during the ICO period, investors will be provided with a corresponding amount of cryptocurrency at a price that can increase day by day thanks to the public’s trust in the project.
IPO
In contrast to ICOs, only businesses that have been established and in operation for a while, are profitable, have a certain bank account, and have a significant business record are allowed to use and must execute. IPO listing on the stock exchange. Thereby, the shares will be converted and become an official ownership component of investors.
Not as free as ICO, the IPO process is a bit more complicated because it is legal and is strictly regulated and monitored by the Government.
In an ICO, the boundaries between an investor, a regulator, and an issuer are not as specific and well differentiated as an IPO.
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Each project in ICO and IPO has its own pros and cons. Therefore, before embarking on an investment, NEEBank recommends that you carefully study and distinguish between ICO and IPO so that you can minimize the risks and easily succeed in the crypto world. .
