{"id":4279,"date":"2022-06-27T10:09:28","date_gmt":"2022-06-27T10:09:28","guid":{"rendered":"https:\/\/www.turbocrowd.it\/?p=4279"},"modified":"2024-04-13T10:30:18","modified_gmt":"2024-04-13T10:30:18","slug":"coin-token-new-frontiers-crowdfunding","status":"publish","type":"post","link":"https:\/\/www.turbocrowd.it\/en\/coin-token-new-frontiers-crowdfunding\/","title":{"rendered":"Coins and tokens: the new frontiers of crowdfunding"},"content":{"rendered":"

When people talk about crowdfunding they usually refer only to equity, lending, reward and donation. Yet, in addition to the \"classic\" types of crowdfunding (a term that literally means \"to raise money from multiple people\"), new ways of raising capital involving the exchange of coins and tokens<\/strong>, or virtual assets, have been gaining popularity in recent years. In this article we look together at what coins and tokens are, how they differ, and why you should consider them for your capital raising.<\/p>\n\n\n\t\t\t\t

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  1. Difference between coin and token<\/a>
  2. Utility and Security Token<\/a>
  3. Token-based capital collections<\/a>
  4. Want to learn more directly with our crowdfunding experts about the topic you are reading about?<\/a>
  5. Do you need support in preparing a successful crowdfunding campaign and seeking potential investors for your project?<\/a><\/ol>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\n\n\n

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    Difference between coin and token<\/h2>\n\n\n\n

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    Let's start right away with an important clarification: coin and token are two quite different things. <\/p>\n\n\n\n

    The coin<\/strong> is a cryptocurrency, which is an exchange currency (like euros, dollars or pounds) with which to buy goods of all kinds (including tokens); the difference is that there is no \"physical\" form, only digital.<\/p>\n\n\n\n

    The buying and selling of coins (a category that includes the famous Bitcoin, which you have probably already heard of) takes place on Blockchain technology<\/strong>. It is essentially a shared and decentralized digital ledger accessible to anyone in the \"network,\" structured in blocks. Each block contains encrypted information, meaning that once the information is recorded within the Blockchain, it cannot be modified or altered.<\/p>\n\n\n\n

    Tokens<\/strong>, on the other hand, are fungible and tradable representations of tangible or intangible resources (or assets). Unlike coins, tokens do not have their own Blockchain, but operate on dedicated platforms and do not necessarily represent a currency (for that, there are already coins!).<\/p>\n\n\n\n

    It is possible to buy and trade with both coins and tokens<\/strong>. What differentiates them are the actions that, as financial instruments, they can perform: the coin is to all intents and purposes a currency with its own value; the token, on the other hand, is to be considered more like a voucher or coupon, and is only usable in a given \"space\" or \"circuit.\"<\/p>\n\n\n\n

    Utility and Security Token<\/h2>\n\n\n\n

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    Tokens are divided into two categories: utility and security.<\/p>\n\n\n\n

    Utility tokens<\/strong> serve a specific purpose (e.g., the ability to be used on a platform to obtain a specific service in return) and are not necessarily related to the company bringing them to market.<\/p>\n\n\n\n

    Security tokens<\/strong>, also called \"investment tokens\" or \"equity tokens,\" on the other hand, are necessarily linked to the issuing company, of which they may represent a share or otherwise.<\/p>\n\n\n\n

    Token-based capital collections<\/h2>\n\n\n\n

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    Capital raisings involving the exchange of tokens<\/strong> represent the evolution of fundraising methodologies in the fintech sector and are set to play an increasingly important role.<\/p>\n\n\n\n

    There are different modes of token-based collection: with ICOs (Initial Coin Offering), IEOs (Initial Exchange Offering) and IDOs (Initial DEX Offering) utility tokens are exchanged, while with STOs (Security Token Offering) security tokens are exchanged.<\/p>\n\n\n\n

    As is the case with classic crowdfunding, such transactions require the use of enabling platform. However, in the case of ICOs, IEOs, IDOs and STOs - collections that take place via Blockchain - there is no need for a third party entity to process the payment (banks, credit cards, etc.), since it is the Blockchain itself, by its very nature, that validates the information.<\/p>\n\n\n\n

    Let us see, in more detail, the characteristics of each type of collection.<\/p>\n\n\n\n

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    Want to learn more directly with our crowdfunding experts about the topic you are reading about?<\/strong><\/h2><\/div>\n\n\n\n

    Turbo Crowd can reveal to you all the tricks of the crowdfunding trade, explain the capital-raising opportunities available to you, and provide you with practical support to carry out a successful crowdfunding campaign.<\/p><\/div>\n\n\n\n

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    Book a FREE video call!<\/div><\/a><\/div><\/div>\n<\/div><\/div>\n\n\n\n
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    ICO (Initial Coin Offering)<\/h3>\n\n\n\n

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    Originating in 2013, ICO is a fundraising practice for blockchain projects in which tokens are offered to investors before they are listed on the broader market<\/strong>, such as the derivatives market.<\/p>\n\n\n\n

    To properly structure an ICO is advisable:<\/p>\n\n\n\n