Two types of ICO usages

There are two purposes of using initial coin offerings:

Crypto Coins – Create a new coin which is different to Bitcoin and has its own unique feature and blockchain. Crypto Tokens – Create a new project, for which to work a special currency is needed. The equity is raised via crowdfunding, so everybody can take part of it. Later on, the bought equity can be sold on some specific crypto exchanges. This is similar to startups, so you invest in the idea behind it and hope they get profitable. A crypto equity is equivalent to a crypto token.

It is important to note, that most initial coin offerings, should be called token generation events (TGE) since they are based on the ERC-20 protocol and don’t own an own blockchain. The ERC-20 is a token standard that follows specific rules on the Ethereum blockchain. Most initial coin offerings happen on the Ethereum blockchain, few get done on top of the NEO blockchain almost none new blockchain emerge.

Interestingly, only about 12% of the bitcoin and blockchain projects raise money over a token presale. See pie-chart below.

