Difference Between Crowdfunding & ICO

 Nowadays, crowdfunding has become a popular method for raising funds. There is also one popular method often preferred by companies for launching their crypto product. It is ICO. 

Today, I would like to figure out the difference between an ICO and a crowdfunding tactic. Let us know each of them one by one. 

ICO

ICO stands for initial coin offering. The process defines the hosting of token distribution events on blockchain. 

In this fund-raising strategy, tokens are exchanged for other assets by the people. The ones which are exchanged include the prominent ones, BTC and ETH. 

Even though the framework of initial coin offerings might differ, they usually represent a startup making a declaration about their concept, and forming a schedule for its funding. 

Through ICO, it becomes easier for startups in publishing information as well as the issues to execution of their solution. 

A website of a startup can be visited by many and can know the idea by reading the documentation.  

To know about the future of ICO, log on to the Cryptoknowmics site. 

Crowdfunding

This fundraising method is much akin to ICO in terms of structure. As mentioned above, a startup company makes a declaration of its concept or idea and schedules it for raising funds. 

In the case of crowdfunding, a startup business grabs whatever it gets from the ones backing it with contributions. If the funding does not seem plenty, then it goes back to the backers. 

When it is met, then a startup business makes the best use of the funding for its product development. 

Rewards

Rewards also define the main difference between these two strategies. Where in ICO, tokens are given as rewards to the participants, in crowdfunding, they are rewarded with a product or thank you card.