£0.00
The big difference between IPO and ICO
If you’ve ever been assigned to source for capital for a company or you’ve listened so much to the stories of young start-ups, you would realize that one of the toughest thing to do id to raise capital. The advancement in technology has grossly reduced the toils that were once associated with raising capital and has made it quite attractive with the introduction of Initial Public Offer (IPO) and Initial Coin offer (ICO)
Both serve as an attractive way for increasing the financial gearing of the company, however, there are other methods of facilitating investment apart from the two.
The difference between the two
Modern trading platforms and markets like the cryptocurrency market has provided two means of encouraging owners to invest what they have in a business. These methods are IPO and ICO. The question then is; how do you differentiate between the two?
Financial investment can be two ways as far as crypto trading is concerned. You could with choose to invest in old companies that are offering IPO or you could settle for young companies that are offering ICOs. But before you choose, one, there are some distinctions and similarities that you should be on the lookout for.
When trying to distinguish between the two terminologies, the distinction that was given by Cointelegraph seems to be the most appropriate. It says that the major difference between them is that while IPO is associated with a stable and long-standing company, ICO is associated with a new business that is just starting out. As a result, an investment in ICO is always riskier than an investment in IPO.
The Company that has been around for a long time probably has a consistent track record when compared to the new and upcoming company. As a result, there are certain doors that the Start-up company cannot knock on when compared to the other company.
The regulations
Unlike IPO, ICOs are not mandated by any kind of law or legal requirements to issue a form of legal document for each and any of their transaction. Although some try to communicate their tasks and goals through the use of white paper, it is not required by a prescriptive code. The decision to make such information available is decided on by the company and no one else.
Conversely, IPOs are required by a prescriptive code to issue out a prospectus. A prospectus is a document that is used to invite the public to subscribe to the shares of a company and it usually includes details of the offer and the obligations of the different parties that are involved.
Instructions, regulations, and Credibility
Unlike ICOs, IPO companies are mandated to register with the appropriate legal authority beforehand. This is because it is a trade that involves a lot of investors and huge cash. As a result of the strict regulations, investors often feel more confident about IPOs than they are of ICOs.
ICOs are formed on a chain of innovations and blockchain technology. This way, the currencies are liquid and at the same time, volatile. Since there is no legal body to control the activities of ICOs, the process of raising finances often goes unchecked. For this reason, many agencies like the US SEC have tried their best to monitor how well project managers utilize funds and identify unscrupulous ones.
The waiting period
Since both concepts are different, it is only logical that the time frame for processing them varies. IPOs take about six months from the time of initial approval to final presentation. This is because of the lengthy legal process that is involved.
The ICO, on the other hand, depends solely on the kind of task that needs to be performed and time. The absence of lengthy legal requirement and processes ensures that the ICO process is shorter and less complicated than IPOs. The decision of time and fund collection depends solely on the effort and system that is implemented by the task leader. For example, Basic Attention Token (BAT) was an ICO that managed to raise about $36 million in just 30 seconds.
Calculating the return on investment of IPO and ICO
We established earlier that IPO and ICO vary in processes and waiting period. Additionally, their return on investment also varies. ICOs are built on trust. The task leaders provide tokens for the public and assure them that the tokens will appreciate.
The appropriate time to launch an IPO and ICO
It is important to stress that only an existent company can issue an IPO. The IPO provides the much-needed liquidity for investors and business owners and ultimately increase their capital. ICOs are issued by new companies in an attempt to get financing that will set their companies on its feet. Since ICOs provide investment option for start-ups that ICOs do not, it is best to launch it when the management is about to release the company.
Comparing the owners of IPO and ICO
The final comparison that we will examine is the ownership of both business strategies. The IPOs are partly owned by investors. It gives them a say and a stake in the operation of the company. As a result, they enjoy certain privileges from holding such position such as the right to vote, and dividends. These rights vary to the number of shares that each investor own in the company.
ICOs investors do not have any stake in the company. Anybody can purchase tokens with the expectation that the price will go higher. This, however, is not an equivalent of control.
Everything in a nutshell
Although both methods have their differences and similarities, the most important thing to note is that they are both instruments for raising capital. ICOs are efficient ways that industries operating in the crypto sectors use to raise capital, however, its lack of guidelines leaves a lot to be desired. The can change in the nearest future and we might see an extension of the service to other departments outside the crypto sector.
Final Words
ICOs have demonstrated its effectiveness when it comes to raising financing, however, the absence of guidelines casts a shadow of doubt on the entire operation. This is a fact that the organizations that are involved in the crypto sector have come to terms with, perhaps, will force them to work on a better structure.
Who owns an IPO vs. ICO?
Another location of a significant distinction between ICOs and IPOs is business ownership. IPO gives financiers a stake in the company. As investors, the investors have voting rights that are proportional to the number of shares one owns. Moreover, they could likewise get dividends. ICOs, nevertheless, do not give the investors a stake in the company. Individuals buy ICO tokens in the hope that they will sell them when their rates appreciate. Becoming a token holder does not offer one control on the business’s management.
Conclusion
ICOs and IPOs supply services with a method of raising capital. The former have proved to be effective in helping services to raise money, lack of excellent guideline has led to uncertainty in a sector. ICOs have been typical amongst organizations within the Crypto sector; perhaps this choice will be offered to other organizations with proper guidelines in the future.
What Is A Cryptocurrency Payment Gateway?
Cryptocurrencies and blockchain technology appeared on time. Our world is rapidly shrinking, and the distances in it almost do not play a role. People from all over the globe communicate regardless of borders. The blockchain technology may well replace all traditional payment and remittance infrastructure by providing anonymity and security to its users. It also helps to remove unnecessary intermediaries, thereby reducing the price of transactions. However, despite the advantages of decentralized payment gateways, there are challenges and problems that need to be solved.
Payment systems based on blockchain and cryptocurrency
Storm on the cryptocurrency market and legislative difficulties, of course, do not stop entrepreneurs and enthusiasts: various payment systems, processors, services and applications that offer services to receive payments and organize transfers, already appeared enough. The application is available both on stationary and mobile devices, with the ability to transition to remote access, since there are no restrictions on IP – no. The wallet is presented on both Android and iOS. At the same time, a two-factor safety check is maintained. The pre-sale of the ERO will start in less than a week, and the ICO from October 11. Thanks to enhanced security, innovative services and user-friendly interface, ErosCoin can be the next revolutionary step in this area.
Payment systems on the blockchain – who needs it?
Payment systems
The ubiquitous transition from cash to payments in a cashless form leads to an avalanche-like expansion of the structure of payment systems. Increasing complexity, reduced security, monitoring and maintaining the health of channels, network nodes and data centers require serious resources.
The peculiarity of the blockchain and cryptocurrency technologies is secure transactions, for which you do not need the institution of third, trusted persons. A distributed registry reliably stores transaction data and is deprived of the need to confirm transactions from a payment operator – this is the solution to the many problems of old payment systems.
To consumers
For transfer or payment via the blockchain and the cryptocurrency system, it does not matter at all how many state borders it crosses – this will not affect either the speed or the cost of the transaction.
Blokchain and cryptocurrency payments can be used by people who do not have accounts in the banking system – the presence of the Internet is enough and in most cases a simple smartphone.
To business
Sales points, online stores, retailers – for any type of commercial enterprises, the introduction of settlement systems in cryptocurrency or using the blockchain is easy and does not require significant investments.
To understand distributed ledger, we will start by understanding a ledger. A ledger is a record in which commercial accounts are recorded, which can be considered the backbone of accounting. Ledgers have existed in many forms, from when clay has been used to keep records, to stones, to the paper age and then this computer age where it is digitalized. The digitized record emulates the same accounting pattern used on paper during its early phase, but advancement in technology especially in the cryptography and algorithmic areas of computing lead to the production of distributed ledgers.
Understanding distributed ledgers
A distributed ledger is a digital type of accounting where performed transactions are recorded in multiple ledgers at different places at the same time. Rather than the conventional way of keeping record where there is a main ledger, the distributed ledger record are generated separately by each node in the distributed network.
Record distribution over the network is unique as each record in individual ledgers are generated autonomously and saved by each node without any main node’s instruction. The principle governing are:
1. Every node in the network is independent
2. The node processes every transaction and determines the validity of the transaction.
3. Other nodes try to validate the result.
4. the result of the majority wins.
How to implement a distributed ledger
The blockchain technology is a very popular type of digitally distributed ledger. It separates data into independent chunks of data, which are then linked together, with a rule that data can only be added. The blockchain technology has been making waves especially financial sector as it might change the future of the financial sector. It promises efficiency, security and addressing of current challenges in the financial sector. It might as well break through to other sectors like manufacturing and energy. Want to more about blockchain?
The distributed ledger is far more flexible than the traditional paper accounting method, it is safer and more secure. With distributed journals it possible to send valued assets digitally without getting a central authority, a middleman, or any third party involved since the users are the ones to keep track and confirm the validity of record. Making the records more secure as validated records are immutable.
How are distributed ledgers different?
As we can see from the explanation above, the validation and maintenance of records and data are in the hands of the individuals in the distributed network, removing the importance of middlemen, 3rd parties and central authorities, thus making it a very trustworthy, transparent form of performing transaction without the fear of record been changed.
These attributes have made people embrace the new decentralized technology, enhancing its use in the stock trading, money exchange, contracts, the unbanked and crypto trading and this seems like only the beginning.
Uquid Review
Uquid is a UK-based firm known for its issuance of cryptocurrency debit cards. For those who don’t know, Quid is slang for GBP. Uquid offers both physical and virtual debit cards. The debit card’s wallet can hold 3 fiat currencies as well as over 80 tokens. This feature alone makes it one of the most desirable and flexible option. However, there are also some limitations that allow its competitors to have a competitive edge. One of the biggest being not covering the US.
We shall further talk about its advantages and disadvantages in the brief review below.
Advantages
- Uquid supports more than just a single cryptocurrency. Users of Uquid can store Litecoin, Ethereum, Ripple, Monero, Dash and 80 different tokens.
- Uquid Bitcoin Debit card’s wallet allows users to deal in multiple fiat currencies like GBP, EUR, and USD.
- There is no issuance fee on the physical card.
- The debit card also ships fasts.
- Users don’t have to pay any additional charges when withdrawing money from an ATM.
- There is also no extra cost on any purchases
- Unlike its competitors, the Uquid debit card can easily be linked with PayPal, making it extremely handy.
- Uquid Debit card also offers the most flexible market rates for cryptocurrency exchange.
- Uquid also supports payment of bills. Cryptocurrency tokens can be used to pay household bills.
- It also features an option to top-up your mobile credit which is seriously very cool.
- Although it doesn’t cover the US, it is accessible for use in over 178 countries.
Disadvantages
- Previously, the Uquid Bitcoin debit card converted cryptocurrency into fiat money –a feature that has disappeared in today’s debit cards. This truly is a shame.
- Today’s Uquid debit card is, in actuality, a prepaid card which needs top-up before use.
- The third biggest drawback is that the debit card still doesn’t cater to the US population which could serve as its biggest market. They do promise to offer its services to the US, but it hasn’t happened so far.
Uquid Bitcoin Debit Card Charges
- There is a monthly $1 service charge
- The actual card costs $16.99.
- It is shipped for free around the world.
- There are no POS transaction charges.
- International ATM withdrawals cost $3.00 whereas domestic ATM withdrawals cost $2.50.
- It costs 3% when withdrawing cash to a bank.
Summary
- Physical card: Yes
- Virtual card: Yes
- Card type: Visa
- Mobile app: Yes
- Supported fiat currencies: GBP, USD, and EUR
- Supported cryptocurrencies: Bitcoin (BTC), Ripple (XRP) Ethereum (ETH), Litecoin (LTC) and 80+ different cryptocurrencies
- Anonymous: No
Final Word
Uquid is amongst the many cryptocurrency firms affected by the ceasing of partnership with Visa due to the WaveCrest. This is one big reason, the firm had to make many changes to an almost-perfect debit card. But not all of its features have turned worse, there are still some that make it stand out from the rest of the crowd. The card offers both affordability and flexibility to its users. When compared to price-wise, it is more or less priced the same as its competitors.