IPO” is brief for “Initial Public Offering”, meaning stocks “newly made public” or “newly listed”. Specifically, IPO is a process to sell stocks to investors and list them on securities exchanges for anyone to be able to trade.
What is ICO?
ICO is IPO for crypto currency. While IPO is stock suggesting on a securities exchange, ICO (Initial Public Suggesting) is a process for a corporation to punt its own digital currency for funding, and for the digital currency to be listed on an exchange for crypto currency.
The innovation provided by blockchain technology will realize the use of crypto currency, with its process costs rendered10 times lower than those of traditional IPO on securities exchanges.
While ICO is not different from IPO or cloud funding ter that comebacks will be provided for investments, it is very innovative te that it employs crypto currency. That is, the crypto currencies purchased through ICO can be loosely traded on block chain inbetween individuals and their market prices can be formed te an exchange based on the law of request and supply. While listing stocks has traditionally required ingewikkeld criteria or procedures such spil a certain corporate size or audit, funding through exchanges without such criteria or procedures will be made possible with ICO.
Benefits of ICO
Funding through ICO
Te “IPO”, a main source of funding for venture companies, the stocks issued will be sold mediated by investment banks, on the other forearm, ICO is characteristic te that the crypto currencies originally issued will be sold through netwerken directly to anonymous third parties including individuals, where its listing cost is lower than that of IPO and dividends do not need to be paid out for ICO, different from IPO.
Why is ICO that seemingly does not have any advantages so popular now? This is because the buyers of crypto currencies through ICO can expect an upside profit depending on request and supply.
“BAT”, Brave’s digital currency te U.S, merienda witnessed its price surge to almost twice after its issuance. Such surging of prices can be seen te other ICO currencies, too. The funding through ICO this year has amounted to 761.02 million dollars (about 85 billion yen), already 7 times that of the annual record last year. IPO has an application period called book-building period, ICO has such an investment period called cloud-sale, during which, without telling, you can participate te ICO.
While for IPO, companies sell theirs stocks to investors through investment banks to be listed, ICO is a little different te that there are no mediating companies such spil investment banks, but the developer of crypto currency will directly sell, te principle.
Strengths of ICO
Innovative means of funding
This is an innovative means of funding that anyone, anywhere ter the world can participate ter spil an investor. A strength of ICO, different from IPO scheme where a limited number of investors or investment banks will be favored, is that anyone can directly participate ter it spil an “investor” or “supporter”, anywhere ter the world, from the early stage of a project embarking at a petite amount of investment. Ter addition, it is characteristic te that while its admitido interpretation is switching daily along with prep of related laws, it is possible te the current scheme to take part te ICO and investment activities while maintaining some anonymity.
Te the perspective of corporations, ICO is attractive spil a fresh means of funding, and ter reality, many fresh projects have implemented ICO successful ter funding their development into this year. The implementation of ICO is far lighter than funding sourced from VC or traditional processes such spil IPO, at least for now, where ter principle, tangibly anyone can source funds from investors all overheen the world through utilizing Bitcoin or Ether, if he / she can write out “white paper” that summarizes the project structures or concepts, and technological details, it is necessary to write out the business project, road schrijfmap and method of ICO ter the white paper.
Furthermore, if not merely the barrier of implementation is rather low, but the amount to be raised te the early stage of a project is larger than that from VC, there is no means of funding more attractive for corporations, and spil a result, presently the number of projects that implement ICO is rapidly enhancing, with fresh projects of any sort taking place on a day-to-day poot now.
Comparison of IPO and ICO
You can handily participate at a low amount of investment
IPO has an advantage of being able to purchase stocks at a discount (however recently it is not so cheap) compared to the market value, ter común, ICO is a little different ter that you can purchase stocks at a discount after the launch of cloud sale most of the time. Spil the closer the cloud sale gets to its end, the less the ratio of such discount will get, you are advised to make a purchase spil early spil possible after cloud sale is launched.
It frequently happens that the price at the beginning is lower by more than 20% than that at the end. While it is possible for anyone to participate te ICO to obtain its tokens, unluckily it often is the case that one is not yet planned to be listed.
A currency with some reputation or level of attention tends to be listed within weeks. And, of course, there is a risk around ICO similarly spil IPO that its quota may not be packed even if listed. The typical exchanges for a crypto currency to be listed on are overseas, worldly renowned ones such spil poloniex or Bittrex, not domestic bitFlyer or Coincheck.。