Over the last few years, we have witnessed how much the crypto industry has progressed and become famous all over the world. Almost no person is not interested in even learning more about a concept from the crypto world.
Accordingly, many have heard of the term “Initial Coin Offering” or ICO – an acronym by which this term is much more popular online, but do not know precisely what it is.
Especially when they find out that there is a term called “IPO”,, i.e. Initial Public Offering – then it is not clear to them what is what, what are the differences, if any, and the like.
That is why we have decided first to introduce you to these terms and point out what distinguishes them the most.
Learn what is Initial Coin Offering
When we say that Initial Coin Offering represents a crypto industry’s equivalent to Initial Public Offering, you’ll realize how similar these two terms are. However, Initial Coin Offering, or ICO, is known as funding using cryptocurrencies.
In most cases, it is a specific form of crowdfunding, even though a private Initial Coin Offering, which doesn’t seek public investment, can also be possible. Those looking for ways to increase their profits with ICOs can check out the ICO calendar, which can be a convenient tool for staying on top of the newest digital currencies.
Initial Public Offering – definition and explanation
On the other hand, Initial Public Offering, or IPO, represents a situation where a private company first sells stock shares to the public. In its essence, an Initial Public Offering means that the ownership of a company is transitioning from private to public ownership.
For that particular reason, the Initial Public Offering process is often referred to as “going public”. An IPO is underwritten by one or numerous investment banks.
The main difference between ICOs and IPOs
Even though ICOs and IPOs represent ways that projects use in order to raise funds publicly, they differ in many things. First of all, IPOs are more mature and established companies. In addition to that, there are far stricter rules around Initial Public Offerings and stronger accountability.
On the other hand, Initial Coin offerings have gained traction in the crypto world. A small team generally executes ICOs with a great idea they’ll like to get off the ground. As we’ve said, in their essence, they are a form of crowdfunding and appeal to the same audience.
Regulations about ICOs are yet to be thoroughly developed, so there’s a much higher risk investing in one, for sure. Remember that organizations wanting to raise funds through an ICO would use a platform such as Ethereum to create their crypto token.
Once the token gets done, the platform will serve as a register for every single transaction that will take place in the future.
We’ve pointed out the main differences between ICOs and IPOs after briefly explaining the terms. If you’re one of those crypto enthusiasts who like to invest in crypto projects through an Initial Coin Offering, we advise you to do your extensive research in the first place. Good luck!