Topic: Are ICO's, and their alt coins like shares of stock? (Read 113 times)

I was under the impression that IPO's were pre-releases of company shares of stock to help invest in the company. This in and of itself makes them part owners of the company with their investment. Isn't that the entire reason anyone would want to participate in an IPO?


Investopedia states:



And if it is stock, then wouldn't ICO's be the exact same concept, but in token form? If it is not, then wouldn't labeling it as an ICO be somewhat deceptive?

These companies are start-ups. Start-ups don't issue stock in the public sense. They seek investors. Releasing ICOs is a great way for a company to generate capital for their company without giving up any ownership in return for those early investors.

Stock is ownership in the company. ICOs don't offer ownership in return for the purchase. But what you are getting is something that can be traded easily for other cryptocurrencies or for fiat currency.

But be careful with ICOs, examine and consider their business model carefully. Most of these ICOs will fade away into history.

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No, man, it's not.


Hard forks are not stock splits. A stock split is when a company wants to double the amount of shares they have outstanding, they split each 1 share for 2 or more and then the price per share is halved or reduced by an equal proportion. At the end each investor has more shares but the save value of investment.

A hard fork is a coup attempt. A hard fork attempts to take over an existing coin and in the process they need to grant the current holders of the target coin an equal amount of the new coin to generate demand.

Yes its like IPO by selling tokens they gathered capital but its decentralized.

ICO is like IPO. It is similar to penny stocks.

But aren't the hard forks something else? Like trying to solve an underlying issue and it forks into 2 separate coins? Maybe I'm off on this as I am still trying to understand many things about the blockchain and hard forks. The token splits in my example are referring to a point where a token created for an ICO has gained such popularity, and risen to such a high price, maybe the company splits the token into 2 of the same token, essentially giving all owners twice as many tokens at half of their former value. This creates more buying interest at the new 'reduced price per token' thus driving up the value for the tokens once more and driving everybody's new double amount of tokens push towards high prices again except making them twice as much money now because they have twice as many coins.


Well, to be fair, the same could be stated about any company on Wall Street that has an IPO launch for their own company. Indeed, everry company does at one point, and many go onto huge success. Many fail as well. But I don't think writing off any company that funds their company/ project means they are an automatic dud. I'd imagine many thought the same thing about Bitcoin and Ethereum when they were basically worthless coins (though I am just guessing on that).

Dont need to write anything more.
ICO is just new buzz word like blockchain and before storage in cloud ;].
These are just names, they want ur money and ICO is new name for altcoin.

Stock is some fractional ownership of a company and it usually gives you some rights vote for members of the Board which is the foundation of Corporate governance.  Selling "stock" to fund a business is a common thing to do.

An "ICO" (initial coin offering) is a foggier idea.  Suppose I want to create a brand-new coin.  And then I try to raise money by pre-selling it, before it's even made.  That's my ICO.  In practice, all of the ICO coins that I have seen have been tokens that ride on ETH.  In fact, "make your own coin" is a hello-world example in the ETH SDK that I saw a while back.  Perhaps that's a reason there are so many of them.

Of course to most people, "stock" and "ICO" are merely two things that "can go up", with the actual nature of the thing being traded having no importance.

I don't see how selling stock vs. ICO could be detrimental to one or the other.  If the stock has value and people buy it, great.  If the promoters can then pre-sell some product such as an ICO token, more great.

Regarding "stock split" like maneuvers, it's already happening.  Keep your eyes open for the various BTC forks such as BCH and BTG. 

A technology company recently held an ICO and stated their coins will be currency for their technology/ products. They kept a portion of coins for themselves. So my question is do these same companies also do stock and allow their company to be funded both ways? Because if so it seems like they would be more apt to creating value to one to the detriment of the other. For instance maybe they could care less about flooding the market with newly created tokens for currency because they are creating value in sales to increase the price of their shares for their shareholders. So I'm just curious if these new ICO's I'm seeing are 'in lieu of shares of stock' for their company or if they are 'an instrument on top to also selling company stock'.

If coins do act as a sort of stock for the company, and there are no actual shares/ stocks, do you think companies that increase in value will do aspects such as dividends and token splits for their token investors? Imagine getting, say $1 worth of token, for every token you own on a quarterly basis. Or imagine a token split where you owned 3,000 tokens, but the price of the tokens have increased to such a level the company splits your tokens so you now have 6,000 tokens at half their former value that will increase to higher prices again in the future as they did that time. Do you think this is in the cards for the future of the crypto market? Would be a huge rival to Wall Street and shares of stock.