ICO & Token Sale - The Difference

in #cryprocurrency6 years ago


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ICO assists you in raising funds for your business or idea through crowdsale of Cryptocurrencies, whereas in Token Sale you build a smart contract on the Blockchain in order to generate and sell your own cryptocurrencies.

Also read: What is ICO – Everything You Need To Know

Let us dig in further and differentiate between Initial Coin Offering and Token Sale.

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ICO Vs Token Sale


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The Initial Coin Offering has had enabled many entrepreneurs to raise funds for their idea or a running business. Most of the time it is the idea that does ICO, whereas professional investors can leverage Token Sales in order to finance that business or idea. It is observed that the companies doing ICOs are mostly technology based. These companies issue coins that can be very profitable for risk takers who believe in do or die situation. Which means you can make a lot more or exactly nothing. There is higher risk involved in ICOs but let us forget that provided you have faith in the founders and the idea that it will definitely work, maybe not at start but ultimately it will.

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As compared to ICOs, the Tokens Sales are more legally governed. There are only few countries that have regulated ICOs working, while all the other have unregulated ICOs. In essence, the legally bounded companies are more likely to succeed in contrast with unregulated entities. Your money is safe them.

Also Read: Here’s How You Launch Your ICO

In addition, most of the funded entities are either ideas or MVPs, and few are those that have records of accomplishment. If you have a great feasible product with a relevant team, then it is likely that VC Firms will buy your tokens. These firms have their own methods; they receive funds from their investors and invest in selective token sales, and hold them until the tokens have sufficient value. Afterwards, the tokens are sold and profits are distributed among investors.

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The most important difference in ICO Vs Token sale is that through ICO you raise funds from a crowd of people that are willing to risk their money; though, in token sales, you get to meet professional financers that are usually required for a large sum of investment, unlike ICOs that starts with as low as 1.000 €. The investment raised through ICOs is used for operating expenditure, whereas token sales funding are used to accumulate capital for investments. As for profits, token buyers and ICO investors are both at advantage. They can sell off during an unusual hype of increased prices, in order to earn a small and a quick profit. However, keep this in mind that the evaluation of Tokens grow gradually as compared to ICOs. It develops gradually and can potentially bring in higher profits than ICOs. Which means you should hold your tokens during a surge.

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ICOs are for those who are after smaller and quicker profits, and Token are for those that can wait until their seed grows into a full tree, and help them earn huge profits. Moreover, the Token investment is more secure and regulated than ICO. When you invest in any of them, make sure you are not in urgent need of that money you invested, since it is a big risk, which rarely proves successful but when it does, it can turn the tables around. Therefore, the VC Business Models should think of adopting token in order to keep up with the growing technology.

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Let us know in the comment section about your choice. Did you go for ICO or Tokens? And let us know your reasons for going either way. That will help everyone understand the essence of both of them.

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At first I thought this 2 are same things 😅😅

Thank you for such a great information & easy explanation. Waiting for your next article.

I see you explained types of ICO (I didn't know about it either). I think you should post about tokens type now so everyone get better idea. At least I will have better idea 😅

Thanks again for such a great information. I always learn something new from your articles. Good work @flash07 👍👍

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Happy to here that you liked it @techbuzz07

see you explained types of ICO (I didn't know about it either). I think you should post about tokens type now so everyone get better idea. At least I will have better idea 😅

I was thinking about the same. Thank You for your suggestion.

Thank You for your kind support.

Hi @flash07 you always have this evaluation that dwells on precision, when the issue surrounds ICOs.

ICOs are for those who are after smaller and quicker profits, and Token are for those that can wait until their seed grows into a full tree, and help them earn huge profits.
for me this is the analogy that has got me tripping,when differentiating them two

for me this is the analogy that has got me tripping,when differentiating them two

You have eyes to caught most important part :)

Thank You for your kind comment and support my friend.

ICO is a concept that we tend to handle on a daily basis and many times we have a vague idea of what its definition is. Thanks for clarify it. Excellent post.

Thank You for your kind comment and support my friend @jadams2k18.

dhairya my friend .., you really make my decision right
that i m following u on steemauto since ur repu was around 30

Thank You for your kind support @jigsindian.

Great article @flash07. I really liked the way you have mentioned everything. I learn so much from you. Thank you again for such a nice information.

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Thank You @pratik99 for your kind support.

Nice comparison! So would this also mean, so we should also expect that ico tokens are much more easily tradable , since they distribution is much broader as is the chance of listing on exchanges?

@conceptskip

Nice comparison!

Thank You my friend.

So would this also mean, so we should also expect that ico tokens are much more easily tradable , since they distribution is much broader as is the chance of listing on exchanges?

These condition fulfills for sure if project has good potential. Listing on exchange is not big issue now a days because there are so many exchanges opening now a days which are listing tokens which even beginner will say no. But as I said if project is good, team is amazing and they really want to put some value in blockchain then there will be no issue :)

Hope I understood your query right and give you satisfactory answer.

My first ICO was the BeerCoin. I bought some BeerCoins during the ICO.

The other coins I got I bought on Cryptopia. And I keep them, use PoS and gain some extra coins.

And when the market gets back up, I will sell them.

My first ICO was the BeerCoin. I bought some BeerCoins during the ICO.

I didn't hear about it honestly. But hope you got great profit from it.

The other coins I got I bought on Cryptopia. And I keep them, use PoS and gain some extra coins.
And when the market gets back up, I will sell them.

Good luck with that my friend.

Thank You for your kind comment and support @hasenmann.

Thank you for your answer.
I think there is a huge difference between INVESTING and TRADING.

And everybody has to think about that FIRST.

You´re welcome.

I think there is a huge difference between INVESTING and TRADING.

Agree with you my friend @hasenmann

thank you for presenting this useful article
even though I often make articles about ico but don't understand what the ico cycle really is

I am glad that you liked it my friend @rumayani. I made ICO related articles in past too if you like to check & in coming weeks will do more. Hope I will get continuous support from you.

Have a great day.

Thank you my friend

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