The ICO as well as the IPO have some common features, but there are also some differences. ICO and IPO have a common purpose - raising funds for development. For clients, the main goal is to generate profits on the exchange rate differences.
In case of IPO client purchases company's stocks (securities), actually buying a share in a company (if common stock, then together with the voting right), what gives the stockholder a right to receive a part of profit hanging upon the type and quantity of stocks.
IPO operations are held on stock exchanges or online platforms, being severely regulated, what is an undoubted advantage concerning security. Stock exchange rate dynamics is relatively low, so benefits of speculation on exchange rate differences can be substantial only in case of large investment.
In case of ICO client purchases not a share in a company, but some conditional electronic unit (token), issued by the company in order to pay for its services. Further, the company produces emission of tokens relatively to the fiat currency, or to the cryptocurrency. After emission tokens enter cryptocurrency exchange, where market formation of token's value takes place (thus, its cost is affected by the supply and demand). All IPO stock exchanges are characterized by a set of strict requirements for the company willing to issue stocks. Each company needs to fulfill a number of extremely high-cost procedures, which requires not only monetary costs but also enormous time costs ( IPO preparation can take 2-3 years). Moreover, stock placement on the selected exchange is not free of charge, counting for at least hundreds of thousands US dollars. Based on these factors, one can understand that only large-cap companies can afford entering IPO, while small companies are looking for alternative sources of fund-raising, what brings us to the ICO.
It is necessary to mention that the idea of implementing the opportunity to earn cryptocurrency during our educational simulator participation is principal for us. Tokens sale during the ICO aims at not only raising funds for development, but also at attracting new members aware of their ability