What is ICO?
ICO is the abbreviation for Initial Coin Offering and is the starting point of any cryptocurrency. It involves a blockchain technology and the people investing in the newly launched cryptocurrencies by investing in ICOs can have a share in the currency and pay with the help of other cryptocurrencies or real money as well. The question here arises is that how is the Crypto ICO different from stock IPO?
ICO has particularly garnered the attention of those traders who are looking to make some quick money and the initial stages of the ICO are basically gathering money and crowd and one needs to know ICO before investing. In many ways it is quite similar to IPO but the main points of difference include the presence of some mandatory regulations that govern and recognize IPO but there is no such case for ICO. The whitepaper for ICO includes all the important points and terms and conditions. However, the company might include and exclude any points without any organization to answer to and is a concern among patrons regarding the lack of clarity and transparency.
Another major difference between IPO and ICO is their utility and value. While IPO stocks can be classified into common stock or hybrid and so on and their value can be redeemed in the future. Whereas, the value of the ICO stock depends on its utility and it increases with more adoption of the coin but it entirely depends on how the coin is created.