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Types of ICO’s

The world of ICOs and digital currency is still being built, affording ICOs some flexibility in creating their company.  For example, ICOs can choose whether to limit the number of tokens or currencies they will make available. They can also choose whether the price will be fixed or adaptable to supply and demand.

Cryptocurrency

A cryptocurrency ICO will seek to create a new digital coin (often referred to as Altcoins) much like Bitcoin and Ethereum did. They will offer you the opportunity to buy their new currency. If the ICO is successful then the value of that currency will rise, and investors can trade it on exchanges, making a profit.

A Project ICO basically wants to fund some kind of startup and will usually reward investors with tokens. These tokens are the informal equivalent of getting a share in the company and are preferred by many ICOs simply because they do not require the creation of a new blockchain and can be formed from an existing format on the blockchain, often from Ethereum (ERC-20). Also, some project ICOs grant investors participation in the company like having a voting right for example. If the startup succeeds, the value of the tokens will rise as well.

Tokens are commonly divided into two types- asset and utility.

Asset based tokens are ones that represent an actual asset, like real estate for example. If the value of the asset goes up, so does that of the token.

Utility tokens represent goods and services, and might afford the owner access to products and services the company offers.

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