During the final day of the Blockchain Cruise conference, <a href="https://twitter.com/michaelterpin?lang=en">Michael Terpin</a>, CEO of <a href="https://transformgroup.com/">Transform Group</a>, talked about some terms related to the cryptoactive industry. He discussed terms such as ICOs, STOs, IEOs, NETs, as well as a comparison between ICOs and IEOs.

In his participation, he said that ICOs are just one more aspect of cryptocurrencies, but very important, since it has to do with their birth. An ICO is the initial offer of currency.

He clarifies that the whole process has a cost and a way to finance the project based on an ICO. The developers carry out a pre-mining behind closed doors and offer the new virtual currency in exchange for other already circulating currencies, such as Bitcoin, which are also interchangeable for real money in circulation. Therefore an ICO is to offer initial investors the new currencies in exchange for money.

For his part, he argued that STOs (or Securities Token Offering) come to open the market that was previously guarded by approved investors or markets whereby regulation was not an option for the general public.

It points out that there are still regulatory restrictions where many of these STOs cannot trade to citizens of the country where it is based. At the same time, regulators cannot prohibit their buying and selling as it exists in the privacy of the blockchain without intermediaries.

Terpin argues that people have been hailing security token (STO) offers as the next initial coin offer (ICO), but there is a growing momentum for a new type of fundraising based on blockchain. It welcomes the Initial Exchange Offer (IEO).

In his panel, he explains that an IEO is still technically a form of ICO, but the main difference lies in where the currency or token is offered. An IEO offers tokens through an exchange of partners, rather than directly to investors.

He emphasizes that in some cases, it might be easier to buy an <a href="https://www.cryptoknowmics.com/crypto/within-ten-days-bitfinex-raises-1-billion-in-an-ieo/">IEO</a> than an ICO. Instead of having to follow the specific steps of each individual <a href="https://www.cryptoknowmics.com/crypto/bcnex-trading-platform-is-launching-its-ico-token-sale/">ICO</a>, you should just follow the standard procedure for purchasing and storing tokens from that given exchange. In many ways, it standardizes the bid-to-bid process since the exchange establishes the terms of purchase.

<strong>ICOs vs IEOs: Safer?</strong>

Terpin comments that coins were often sold through an ICO with only promises that they would later be available in exchanges. In some cases, tokens offered through an ICO were never listed in exchanges.

When you buy tokens through an IEO, you buy with the certainty that the exchange has performed some due diligence and is tossing a coin that you believe has a future. After all, the best thing for an exchange is not to burn your customer base by issuing unreliable tokens.

That said, you should always be careful about the exchange you are buying and the potential motivation you might have to list an IEO.

Last day of lectures at Blockchain Cruise: ICOs vs IEOs.

Alejandro is a big time crypto enthusiast. He spends most of his day either writing about news and innovation about cryptocurrencies or finding the new hidden gem to add to his portfolio.

Last day of lectures at Blockchain Cruise: ICOs vs IEOs.

Top Picks