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.
ICO Vs Token Sale
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.
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.
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.
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.
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
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.
for me this is the analogy that has got me tripping,when differentiating them twoYou 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
Thank You my friend.
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.
I didn't hear about it honestly. But hope you got great profit from it.
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.
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.
Well written
Thank you my friend
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I believe crypto market this time totally manuplate and people don't want to invest for a longer duration they just want to trade for a short term period so yes ico is for those who wanted to sell there coins at the time listing and token for those who wants to keep it for long duration.
Agree with you my friend. Thank You for your kind support @cryptomoneymntra.
Quite weird that I've been using these words interchangeably . Thanks for this buddy ! Resteeming so that others can learn :)
Thank You for such a great support my friend @danielwrites.
Nice informative blog buddy ..
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Thank You @navrosekalsi
This is a very nice and informative article @flash07. I have to admit, I haven't been able to distinguish between them before now. I always thought they might mean the same thing seeing as tokens are at the center of the whole distribution process. Now I know better. Thanks for your enlightenment.
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excellent post dear friend @ flash07, very clear in the differentiations.
Thank you very much for sharing this information
I wish you a great day
Thank You very much my friend @jlufer. I am glad that you found this article informative.
Very informative. Great article.
Thank You @insaallah99
These are the two points I find easy and worth keeping in mind as the difference, the others look a bit confusing. Thumbs up for head up!
Thank you for sharing your views.
Tried to write as simple as I can 😅
Thank you for your kind support my friend.
Informative!!
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Well describe bro. Good work
Thank you my friend.
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Very nice article for recognise the difference.
Thank you for your kind support @rosy1606
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thank you for writing the differences in detail, great job
Thank you very much for your kind support my friend @mike949
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Awww... Nice one here again. But it pains I am just getting to reel this after 10 days of posting.
This articles explains a lot in a succinct way the major distinguishing factors between ICO and token sales.
Much more knowledge is added to my crypto horizon, thanks to you @flash07.
I pray I am not late to show up on your next posts.
Time dosen't matter my friend. What matter is your honest review and valuable comments.
Thank You for such a nice comment and your kind support my friend..
Thanks bro!
Great article :)
Thank You for your kind support my friend @freecrypto.
Its amazing how frequently these terms are used in the media with such little explanation.
I am glad you liked it my friend @machnbirdsparo.
Thank You for your kind support.
I didn't know the difference, I must confess. Duely noted now. I see it's more affordable for me to participate in ICOs than Tokensales, although riskier.
I am glad that you found article useful my friend @ced000.