IPOs (Initial Public Offering) and ICOs (Initial Coin Offering) are basically the same thing. When a company goes public and sell shares on the stock exchange for the first time IPO is created. This is the same with ICOs but it is a digital asset representing the ownership of a company. ICOs have been created on the blockchain which is decentralized and transparent, secure and tamper-free. There are no middleman/banks involved.
Almost all ICOs are a sort of crowdfunding on the blockchain but there is a difference. ICO is where an enterprise or project has its own tokens or coins (like shares). It is to produce and procure funds. These tokens and coins will then be listed on the Cryptographic Currency Exchange, which uses the blockchain technology to do that. The creation of ICO is also much cheaper than an IPO.
Bitcoin paved the way for other cryptocurrencies. Altcoins (Alternative Coins) are cryptocurrencies which were launched after Bitcoin and are similar to Bitcoin. Both of them need the blockchain to work on. Altcoins are also peer-to-peer like Bitcoin which means, each computer have notes on and act as a server. It also involves mining (the process by which transactions are verified and added on the blockchain). Altcoins are all cryptocurrencies which are not Bitcoin, like Litecoin, Ethereum, Cardano and Ripple. Many altcoins are trying to target the limitations of Bitcoin and come up with newer versions and better functionality.
Altcoin crowdfunding is now becoming very popular and mainstream for raising capital for all types of investments. It brings together many individuals who want to invest money in companies and projects. Crowdfunding makes it possible to launch projects and sell their projects online, with little cost. Many startup companies have ICOs to raise money and to avoid the standard capital-raising process through banks.
With pre-mined coins, you can get involved with the blockchain. This method is a unique way of crowdfunding using alternative coins. The coins are sold in an initial coin offering or what we also call ICO, to the public. Investors can now purchase coins with the expectation that prices will increase at some point.
The difference between crowdfunding and Initial Coin Offering is that ICO is more global, and crowdfunding projects are limited and restricted to a determined region or country. Crowdfunding endeavour to gain enough investors to make their product launch successfully. ICO is more going around the blockchain technology and the tech side and has a lot of options based on what the company is trying to promote. With crowdfunding, participants don't expect any rewards but only receive acknowledgment. ICOs receive tokens in return for the contributed amount. Instead of using cash or Bitcoin you use their tokens to pay for services the ICO offers. With these tokens people take their tokens to invest with when they expect the prices will go up
For more advice please feel free to contact me on 081 269 3916 - for a Consultation. Pieter Lategan