ICO, IEO, STO, IPO and FREECO Explained | Crypto Jargon #13 - YouTube

Welcome to another informative episode of Crypto Jargon

with myself, OJ Jordan

Today I'm gonna break down the terms behind the following acronyms:

in relation to Cryptocurrencies of course.

So, let's start with the most well-known perhaps: ICO

It's been explained in a many videos already

and you might have seen my video from a couple of years ago,

so, I'm gonna keep it short and sweet.

it's a form of crowdfunding a crypto-related project

at the pre-launch stage.

ICOs are frequently used by developers of a new cryptocurrency to raise capital.

Since the first Initial Coin Offering in 2013 by Mastercoin,

ICOs have become a very popular method for investors

to obtain tokens at very low prices.

At the same time,

they have also been used by many scammers for illicit funding

of dubious and even sometimes, non-existent projects,

which put pressure on many government bodies

to set up a regulatory framework for ICOs in 2017.

Currently, Chinese, Indian and American governments are amongst the few

that require KYC registration for participants in ICOs.

While 2017 was the year of ICOs

(thousands were launched back then),

2019 is definitely the year of the IEO

it's a crowdfunding similar to an ICO

but it relies on having an exchange or a number of exchanges

that function as a counter-party.

Developers mint the project's tokens and send them to the exchange,

which will then sell the tokens to individual contributors.

It is more convenient in the way that the tokens

are received directly into the user's accounts in these exchanges

and they can start trading them straight away

without the nuisance of having to remember which wallet they used

when they placed their orders for the ICO

or you know, having them wait and claim them later on

and move them from one wallet into the exchange once they are listed.

which is a process that could take months

in some cases, even longer

and could be quite a challenge for those who are not very tech-savvy.

STO stands for Security Token Offering

and it's a step further into providing more security for the investors.

Similar to an Initial Coin Offering (ICO),

an investor is issued with tokens representing their investment

but unlike an Initial Coin Offering,

a Security Token Offering represents an investment

contract with agreed minimum of returns

ora return of the invested amount upon failure to meet this agreed minimum.

IPO is the original term

that these stem from it - it stands for Initial Public Offering

and it's the event in which a company "goes public"

selling early shares of their business in exchange for funds.

This term gave birth to the crypto-specific term ICO

but the two have major differences.

IPO is about selling shares of a company

with a price are determined by the profitability of that company

and the expectancy for future performance based on the past performance of that company.

While an ICO is about selling tokens that do not represent the equity of the company.

The price is based purely on hope and speculation about potential future performance of that project.

Since the project is not even launched yet.

And lastly, we have FREECO

Free Coin Offering unlike a traditional ICO

where investors are required to send money before the project is launched.

In a FreeCo, you just have to register with that project and you get some free coins.

You only get to invest later when the project is up and running.

In that regard, It's a little bit safer than ICO

but there's not that many of those

I just thought it's worth mentioning it

since we're listing the types of coin offerings.

So, this concludes today's episode of Crypto Jargon

I hope you liked it and if you did,

Share it with someone else who might benefit from watching it.

also, don't forget to leave a like and a comment below.

I like to hear your feedback.

Thanks for watching! I'm gonna see you on the next one.

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