Bitcoin
BTC$49 930.71

-0.82%

Ethereum
ETH$4 398.34

2.40%

Binance Coin
BNB$604.70

5.45%

Tether
USDT$0.999730

0%

Solana
SOL$191.21

1.34%

Cardano
ADA$1.37

0.31%

A Difference that Goes a Long Way


13 Feb 2019

A Difference that Goes a Long Way: STOs vs. ICOs explained


ICOs have been quite a popular trend in the past few years, especially back in 2017. ICO, or Initial Coin Offering, is a term that the crypto community used for token sales that were made by startups in order to gather funding for the development of their project. While the ICO model was since proved to be quite flawed, and many believe it to be a thing of the past, it still survives to this day, although the hype regarding it has died down considerably.

The hype is not an uncommon occurrence in the crypto world, and 2017 has undoubtedly been a year when the crypto hype reached its peak. Back then, cryptocurrencies themselves exploded, and the market was flooded with new investors willing to support any project as long as there was a possibility of making a profit.

This is why numerous startups emerged, and as a result, the ICO trend became the crypto world's new major hit.

About ICOs


As mentioned, ICOs are a type of crowdfunding events that were inspired by IPOs (Initial Public Offerings) which are held on stock exchanges. The difference between them is that ICOs do not provide investors with ownership of the company that is offering the coins, and instead, they come up with white papers which explain their projects' goals. Investors are then expected to read the white paper and determine whether or not they believe that the project has a future.

Those who are optimistic regarding the idea can then invest in it in exchange for coins, with the belief that the coins will hold actual value someday. While the concept itself is interesting, it is clearly risky, as there is no guarantee that investors will see returns on their investments. Furthermore, after the hype swallowed the entire crypto space, a lot of scammers emerged with fake projects, and as soon as they received an amount of money they were satisfied with, they disappeared, leaving the investors confused and angry.

The lack of regulations made this not only possible, but also quite easy, and many optimistic investors had to experience the realization that they were scammed. This eventually sparked the mistrust towards ICOs, and those willing to invest learned to carefully consider every aspect of every project before they gave up their money in exchange for potentially worthless tokens.

The trend was believed to be extinct in 2018, although it can still be encountered today, like in the case of a recent BTT token sale performed on Binance Launchpad.

About STOs


STOs (Security Token Offerings) came as an alternative to ICOs, and many see the STO trend as a spiritual successor to the ICO model. They work in a similar way in the sense that they offer tokens to a wide audience. However, unlike ICOs, STOs are offering securities represented by tokens, which requires the company offering the coins to register in accordance with the SEC's guidelines.

STOs have attracted a lot of attention, and while they did not spark a hype that surrounded ICOs, they are more secure an investment than ICOs ever hoped to be. In addition, experts feel confident when it comes to STOs, with some of them predicting that their market cap might reach as much as $10 trillion by the end of 2020.

Of course, STOs have their negatives as well, such as the administrative burden and additional legal costs. However, this is often overlooked as the investors' security is typically seen as a priority. Another downside is that security tokens are still not particularly attractive to most major exchanges, although this is expected to change in the future.

Exchanges are interested in STOs, although there is still the regulatory issue that needs to be resolved before they can pledge their full support to them. However, many of the large exchanges are known to be among the major STO investors, which shows that the sector could be the next step in crypto evolution.


Related

Why Tezos (XTZ) price broke its downtrend with a 50% rally
Why Tezos (XTZ) price broke its downtrend with a 50% rally
TerraUSD (UST) adoption backs LUNA’s ascension to a new all-time high
TerraUSD (UST) adoption backs LUNA’s ascension to a new all-time high
Who Wants to Buy Bitcoin Now?
Who Wants to Buy Bitcoin Now?
Investors watch bitcoin volatility
Investors watch bitcoin volatility
Bitcoin Back Above 50K
Bitcoin Back Above 50K
The worst-case scenario for Bitcoin
The worst-case scenario for Bitcoin
Bitcoin’s downtrend as a sign of market maturity
Bitcoin’s downtrend as a sign of market maturity
Shiba Inu, Dogecoin, Cardano, and More Crypto in FBS
Shiba Inu, Dogecoin, Cardano, and More Crypto in FBS
Bitcoin investors seem keen to capitalise on a very successful year
Bitcoin investors seem keen to capitalise on a very successful year

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 72.4% 48 $49 930.71 -0.82% -12.44% $943 470 946 757 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 80% 39 $4 398.34 2.40% -4.02% $521 916 919 372 ETH 7 days price change
3 Binance Coin (BNB) BNB Binance Coin predictions 78.8% 35 $604.70 5.45% -2.89% $100 865 065 822 BNB 7 days price change
4 Tether (USDT) USDT Tether predictions 93.6% 1 $0.999730 0% -0.14% $76 305 698 656 USDT 7 days price change
5 Solana (SOL) SOL Solana predictions 70.4% 61 $191.21 1.34% -15.62% $58 767 135 668 SOL 7 days price change
6 Cardano (ADA) ADA Cardano predictions 60.8% 77 $1.37 0.31% -11.42% $45 843 582 011 ADA 7 days price change
7 USD Coin (USDC) USDC USD Coin predictions 92.8% 2 $0.999084 0.05% -0.12% $41 003 048 789 USDC 7 days price change
8 XRP (XRP) XRP XRP predictions 68% 65 $0.853317 5.14% -12.95% $40 316 898 132 XRP 7 days price change
9 Polkadot (DOT) DOT Polkadot predictions 64% 70 $29.04 -1.01% -20.13% $28 675 211 460 DOT 7 days price change
10 Terra (LUNA) LUNA Terra predictions 63.6% 75 $74.31 8.29% 16.04% $28 302 225 841 LUNA 7 days price change
11 Dogecoin (DOGE) DOGE Dogecoin predictions 69.6% 65 $0.177706 0.12% -14.26% $23 535 429 066 DOGE 7 days price change
12 Avalanche (AVAX) AVAX Avalanche predictions 65.6% 77 $91.59 3.37% -22.82% $22 238 588 785 AVAX 7 days price change
13 SHIBA INU (SHIB) SHIB SHIBA INU predictions 60% 79 $0.000037 0.47% -14.04% $20 134 542 687 SHIB 7 days price change
14 Polygon (MATIC) MATIC Polygon predictions 66.8% 70 $2.33 1.51% 10.74% $16 487 352 139 MATIC 7 days price change
15 Crypto.com Chain (CRO) CRO Crypto.com Chain predictions 60% 78 $0.609756 -1.35% -15.04% $15 404 283 513 CRO 7 days price change

Be the first to receive Cryptocurrency Price Predictions and Forecasts daily

Get cryptocurrency price predictions, forecasts with analysis and news right to your inbox.

© 2015-2021 Crypto-Rating.com

The usage of this website constitutes acceptance of the following legal information. Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website, including information about the cryptocurrencies and bitcoin is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Crypto Rating shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about cryptocurrencies. The entire responsibility for the contents rests with the authors. Reprint of the materials is available only with the permission of the editorial staff.