Bitcoin Forum

What is the necessity of ICO Token Development?

If I understand right, the question is why do projects need a Token at all, why it is necessary to have one in case you'd like to start an ICO.

Let me break it down for you:

There are several types of tokens:
utility token, equity token, asset token and a currency token.
A utility token allows you to do things, it gives you specific rights or abilities you didn't have before.
An equity token implies ownership and control.
An asset/equity token represents some sort of physical asset or product. In terms of their economic function, the tokens are analogous to equities, bonds or derivatives.

There are many other kinds like Reputation and Reward Tokens, often used in bounty campaigns in exchange for something the community does for a project like retweets or likes on twitter or somewhere else.

Let's say you have a Cinema Token, you'd get tickets for an asset token or even a share of that cinema for an equity token, extra big cola for free or an ability to choose a movie if it is a utility token.

So, basically one needs to decide what kind of services a project offers and depending on that the team must decide what token to offer.
There are many pros and cons for each of those tokens, but I better write an article about it and give the link as a reference.
Not every project needs a token, most of the time it is used only in order to collect funds during an ICO.
After that if the token is no longer its cost is greatly reduced as nobody needs it.