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1  Alternate cryptocurrencies / Altcoin Discussion / ICO vs STO: All You Need to Know About the New Fundraising Method on: January 10, 2019, 10:09:30 AM


There is currently an intense debate raging within the crypto community. This debate is centered around the emergence of a new method of raising money for blockchain projects, this method is called a Security Token Offering (STO).


Some people believe that STOs, will eventually completely replace the original Initial Coin Offerings (ICOs). Others believe that STOs in their current form actually take away from a lot of the original positives that crowdfunding through an ICO provided.


In this guide, we will explore the key differences between ICOs and STOs, so that you can be clued up on the new fundraising method in the world of crypto:





What is an ICO?


Firstly, we will start by briefly explaining what an ICO is.
An ICO is very similar to an IPO in the world of traditional investments. ICOs themselves are a method of fundraising where a company who is looking to establish a new product or service will look for outside investment to help fund their venture. The company running the ICO will do this through various forms of marketing.

In exchange for their investment, the investor will receive a certain number of cryptocurrency tokens that are unique to the ICO. Investors can either use traditional, fiat currency or other tokens.

Investors buy into the project with the hope that the value of the token will increase from the base price. They will then hope to trade the token later on for a profit.

Companies will mainly use an ICO to avoid the strict regulatory procedures (which are expensive and time-consuming) involved with normal fundraising methods.

There are also a number of different ways in which an ICO can be structured. Each token can be given a normal, flat price that will not change during the ICO, or, the value of an individual token may raise during the ICO, based on how much money has been received in that funding round.

It is very simple for a business to launch an ICO, as there are a number of different platforms that are willing to host your ICO launch for some sort of consideration.

The ease and freedom provided by an ICO have led to a boom in the blockchain industry, in 2017, money raised through ICOs topped $6.2 Billion.






ICO funds raised at 2017 by ICOs. Stats by ICOdata


Like with anything, there is always a catch. Due to the unregulated nature of ICOs, they are very susceptible to fraudulent activity and a large number of investors have been left out of pocket by shark-like businesses who will create an ICO, then take the money and run. Furthermore, due to there being no regulation for ICOs, stolen money can almost never be recovered.

The statistics make for fairly damning reading. According to a study produced by Satis Group LLC ,81% of ICOs that they analyzed had been found to be scams. Further to this, 6% had actually failed, 5% had gone dark and only 8% went to trade on an exchange. This doesn’t make for very good odds for investors.

This is one of the reasons that a large number of investors have been hesitant to invest in ICOs. They feel that the risk of being scammed is so high, that it does not warrant the potential returns that could be made.


What is an STO?

Now, we will briefly go into detail about what an STO is.

Whenever explaining what an STO is, it is always important to explain what a security is.

“In terms of finance, a security is a certification or some other financial instrument, that has an intrinsic monetary value. These securities can then either be traded by exchanges, who will broker the transaction or, they can be traded directly from peer-to-peer. These securities are then broken down into two subcategories, equity, and debt securities. This is in effect, owning part of a company, without actually taking it into your possession.”
Companies use this as a way of offering part of their business to investors, in return for a short-term cash injection that can help them to realize their latest goals and plans. Investors can also be entitled to profits, dividends and interest rates.

So, a Security Token is a crypto token which can entitle the owner to either a share of the profits of the business, a stake within the business itself or some other form of reward in exchange for their own money.
Security Tokens also have to fulfill the requirements of the Howey Test to be considered as a security. The requirements were established in the case SEC vs W.J. Howey Co. 1946.

The requirements are as below:

It involves an investment of money.
There is an expectation of profit from the investment.
The investment of the money is in a common enterprise.
The profits are derived from a promoter or a third-party.
STOs are always backed by some form of tangible asset, which helps to prevent investors from falling prey to fraudulent business practices.
Due to the fact that STOs are classed as securities, they are also subject to securities regulations for the country they are launched in and for the countries of their investors. For example, if you were launching an STO
 in the United States and you have an investor from the United Kingdom, you will have to comply with both the American Securities and Exchange Commission (SEC) and the British Financial Conduct Authority.

In the US, you will need to register with the SEC, meaning you will need to provide them with the following information:

A description of your company’s property and business purpose.
A description of the security you are offering.
Information on your management structure.
Your companies financial statements, confirmed by an independent accountant.
This means that when launching an STO, you would need to enlist legal support to help you properly understand the required regulatory practices.

All of this legal red tape can be expensive, however, it also provides protection for businesses who are looking for investment. Due to the fact that investors in an STO, have to be identified, there is less chance of an investor using your business for illegal monetary activities. This can help to preserve the image of your business and can prevent you from falling into any legal trouble.

The legal ramifications of STOs mean that there is a slight barrier for entry for investors. In the United States, when registering your STO with the SEC, you will need to apply for an exemption to seek investment. At the moment, all STOs are registered under a Regulation D exemption. This means that in the US, only accredited investors will be able to put money into your business.

Despite this, offering your business to investors through an STO is still more cost effective than the traditional method of making an Initial Public Offering on your country’s stock market. There is a lot less expensive administration involved and the number of regulatory hoops that you need to jump through, are still lesser than the traditional method.

Also, when you have the correct set-up and you have marketed your STO correctly, Security Tokens can be traded incredibly easily on your chosen exchange. They are a lot less cumbersome than traditional company stocks and more secure than ICOs.

STOs have also helped to provide a better reputation for the crypto world. This is because currently, as we mentioned before, ICOs have a reputation for being a hotbed for fraudsters. Due to the more regulated nature of STOs, they have made it so that token offerings are seen as more credible to investors. This is predicted to help the token offering movement to scale up even more in future.

These factors have led to many predicting that STOs will replace ICOs in the coming years. Others argue that they defeat the original purpose of ICOs due to the fact that they are subject to regulations and red-tape.

STOs have already resulted in some big moves for businesses. For example, crypto-exchange LXDX offered out 10% of their business, which could be bought through 5 million Security Tokens. They offered these tokens for one Euro per token, which led to an earning of $5 Million for them. As time goes on, we will see STOs that are a lot bigger than this and time will tell, if they’ll be able to surpass the money raised by filecoin.

The Differences Between ICOs and STOs:
Now that you have read to this point, you probably realize that there are a lot of differences between ICOs and STOs, despite their similarities. So, we have composed an easy to understand table, which will clearly display the similarities and differences between the two funding methods.

2  Other / Meta / When my account rank will change? on: December 21, 2018, 01:49:02 PM
Hi there
I wonder how can I know when my rank will change and I will become a full member.

3  Economy / Trading Discussion / Anyone here that experience a long bear market besides this one? on: December 17, 2018, 12:43:23 PM
Anyone here that experience a long bear market besides this one? Did you know when the bear market ended?

I wonder when will be the end to our bear market. I see so many negative news here lately
4  Bitcoin / Bitcoin Discussion / How many times you heard the bitcoin gonna die? on: December 13, 2018, 08:50:09 AM
I'm in this market for almost 2 years.
I think that I heard about the death of Bitcoin a thousand times already. It's becoming ridiculous.
Is there any site that tracks all the time that 'Bitcoin good die' was in the news? I want to print it and put it on my wall.
5  Alternate cryptocurrencies / Altcoin Discussion / All About STO Marketing on: December 04, 2018, 10:31:30 AM
Currently, it seems like everyone is talking about Security Token Offerings (STOs).

From YouTubers, investors, and gurus to reputable news outlets, there is a massive amount of exposure regarding these offerings around the industry.

Before I explain to you about STO Marketing here for those of you that never heard about STO here is a short explanation:

What is STO (Security Token Offering):
To understand what an STO is, firstly, we must look at what security is. (Taken from the Previous Guide).

In terms of finance, security is a certification or some other financial instrument, that has an intrinsic monetary value. These securities can then either be traded by exchanges, who will broker the transaction or, they can be traded directly from peer-to-peer. These securities are then broken down into two subcategories, equity, and debt securities. This is in effect, owning part of a company, without actually taking it into your possession

Companies use these methods so that they can raise capital from investors, to fund other parts of the business, such as expansion plans. In return for their investment, the financiers are normally offered to make their money back, and make a profit through means such as dividends, interest rates or a share on the company profits.

Security Tokens are in essence, cryptographic tokens that can pay the owner dividends, entitle them to a share of profits, pay them interest, or, they can be used to reinvest into other Security Tokens.

There is a prerequisite to qualify a crypto token as a Security Token. As a requirement, the token must pass the Howey Test, which was set out in the case of SEC vs. Howey (1946) in the United States.

This means that if the token aligns with the following rules, it will be considered a security token:

-It involves an investment of money.

-The investment is in a common enterprise, where there is more than one investor.

-There is an expectation of turning a profit from the works of either a third party or the promoter of the token.

Security Tokens, generally garner their market value from outside, asset that is tradable. Because these class as securities, regulations apply to them and a breach in regulations will leave the offerer exposed to potential liability.

If marketed effectively, with a platform that can help advertise your business through an STO, it can be a very powerful and effective tool in raising capital. It is also widely believed that STOs will eventually outgrow traditional ICOs due to the fact that they offer more security for investors, due to the regulations in place.

Selling a Security Token is comparable to an ICO in the sense that coins are issued to the investors. However, whilst an ICO investor would seek to gain value through the unlocking of a platform, or the appreciation in value of the coin, an STO investor would seek to gain cash flow in future, potential dividends or any potential right to vote that comes with the security.

Security Tokens are backed by outside assets that give them an intrinsic monetary value as soon as they are issued. This is in contrast to the use of a regular, utility token, where the actual value is based on speculation until a platform is developed and marketed for it.

In essence, the model of using a security token makes the process of raising capital for your project, look less like a Kickstarter page and more like a professional stock that is for sale.




source


STO Marketing:

The main difference between ICO marketing and STO marketing is the target audience.
In STO only accredited investor can get involved. That's why the whole process of getting a person to invest in your project is different.

I recommend you to go over The Complete STO Marketing Guide 2019
before starting your STO marketing campaign. It might save you a lot of time and money.

 
6  Bitcoin / Bitcoin Discussion / Describe what is bitcoin for a 7 year old kid in few words on: November 29, 2018, 06:31:32 PM
Hi there
What's the most simple way to describe what bitcoin is for people?
Will be cool to read in the comments some new creative ways to do that! Grin
7  Economy / Speculation / Do you HODL because you believe the price will go up? Or are you lost too much? on: November 17, 2018, 03:42:36 PM
I wonder if you HODL because you believe the price will go up? Or are you lost too much already so you don't see any reason to sell because you won't be satisfied with the money you will cash out?
I have this self-conflict for a few months already

8  Alternate cryptocurrencies / Altcoin Discussion / To all the ICO founders out there on: November 09, 2018, 09:51:08 AM
Cool post that I saw 2 days ago on Reddit:
https://old.reddit.com/r/CryptoCurrency/comments/9v00s2/to_all_the_ico_founders_out_there_you_are_one_of/

To all the ICO founders out there, You are one of the reasons our market have a bad reputation. So, before the next bull run, I gather for you a few basic resources that may help you to make better decisions

Fairness

SEO

Transparency

Bitcoin WhitePaper

Andreas M. Antonopoulos official site.

What is Blockchain VERY IMPORTANT

What is cold storage?

How to keep Your Cryptocurrency and investors protected

basics about marketing your ICO

How to Store Your Bitcoin as Securely as Possible

How to keep your investors happy

  Head of BitConnect cryptocurrency scam arrested in Dubai
9  Bitcoin / Bitcoin Discussion / any early bitcoin adopter here? What's your opinion about the long bear market? on: November 03, 2018, 04:17:34 PM
any early bitcoin adopter here? What's your opinion about the long bear market?
I would like to hear an opinion from someone that experience long bear market in the crypto world before.
Where do you think we are heading?
10  Alternate cryptocurrencies / Announcements (Altcoins) / Coinbase Just Partnered With A Token Startup in Bid to Attract Pro Traders on: October 07, 2018, 10:27:06 AM
U.S.-based crypto exchange Coinbase has teamed up with the token-based trading protocol startup Caspian in an effort to boost its offerings aimed at pro traders and financial firms.

Under the deal, Coinbase Pro will integrate Caspian's "full stack" of tools to bring additional trading and portfolio management capabilities, according to a Caspian Medium post published recently

Kayvon Pirestani, director of institutional sales at Coinbase, said in the post:

Quote
"Customers will be able to take advantage of the best elements of both platforms  –  accessing Coinbase's extensive historical market data and deep pool of liquidity, and combined with Caspian's suite of seamless trading tools."

More than just a commercial opportunity, the partnership is an opportunity to "move forward the institutional adoption of crypto as a mature, tradable asset class," Pirestani added.

Caspian – which offers what it says is an "institutional grade full-stack crypto trading and risk management platform" – currently connects to 25 crypto trading platforms, including Coinbase, Gemini, Bitfinex, Poloniex, Huobi, OKEx and Binance.

As reported by CoinDesk, Caspian
 was launched just days ago as a joint venture of Kenetic, a crypto firm based in Hong Kong, and Tora, a trading systems firm that already supplies order execution, portfolio management, risk assessment and compliance services for well-established asset classes. The project has already raised $16 million in funding via a token presale.

The firm said the partnership with Coinbase is part of its strategy to "connect institutional investors and active traders with multiple trading platforms from a single interface."

As part of its aim to bring cryptocurrency to the mainstream of finance, Coinbase also announced in June that it was making moves to become a federally regulated broker-dealer.

The firm indicated at the time it was attempting to acquire several companies – Keystone Capital Corp., Venovate Marketplace and Digital Wealth LLC, – to ease the process of acquiring a broker-dealer license, an alternative trading system license and a registered investment advisor license.

Once those are in place, the company said it aims to seek approval from the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) to offer blockchain-based securities.

source: https://www.coindesk.com/coinbase-just-partnered-with-an-open-source-crypto-trading-marketplace/

11  Economy / Speculation / Is it true that the market usually rises before the end of the year? on: September 30, 2018, 10:26:59 PM
Is it true that the market usually rises before the end of the year?
If so, why do you think it happens?
I spoke with few people that already said that in the last 5 years the market became really bulish
12  Alternate cryptocurrencies / Announcements (Altcoins) / qiibee crowdsale is live - Here's all you need to know about the project on: September 27, 2018, 11:55:25 AM
Everything you want to know about qiibee:


In light of our recently kicked off Crowd Sale, we want to provide an executive summary of our most recent blogposts describing our business, product and technology. So keep on reading if you want a short take on what we are all about!




qiibee’s working product

Today’s point-based loyalty market is inefficient for both brands and customers and we from qiibee are making the loyalty landscape more secure, efficient and user-friendly, by bringing loyalty programs to the blockchain. And, we are firmly convinced that our solution for the issues inherent in today’s loyalty programs is very attractive due to the flexibility and value it provides for both brands and customers. Converting points into real-value loyalty tokens on the blockchain has enormous potential.



qiibee’s token economics

Our token economics is designed to provide the parties in our ecosystem with a token that has a value anchored in fundamentals. And, based on how our business model is structured, we can project that the supply of our token, the QBX, will be outweighed by the demand, which is driven by the B2B business. Simply put, the more brands choose to join our ecosystem (for obvious reasons), the higher the demand and the lower the supply for QBX.On the other hand, a larger number of participating brands also increases the set of options for customers. It’s a win-win for everyone!


Technology adoption lifecycle

Above all, we are excellently set-up to successfully push for our overarching goal of crypto and blockchain mass adoption. Think about the more than 10’000 digital wallets that have been created as a direct result of our partnership with Lattesso (within less than 2 months), and put this into relation with the current outstanding number of 30m wallets worldwide and you can begin to grasp the potential reach we can develop. If we managed to increase the global number of wallets by 0.03% in only two months with 1 Swiss brand, imagine what happens with hundreds of brands all over the world Smiley

https://cdn-images-1.medium.com/max/800/0*eyO4PyXmtKnvnK_U

Besides our high caliber team made up of individuals from across the globe and a variety of industries, we are backed by our high-profile trusted contributors such as FIAT CAPITAL, TLDR CAPITAL, Fingenom, bamboo FUND, FBG One and many more. Moreover, we are supported by well-known advisors such as Omer Ozden, Tom Graham and Tal Cohen — just to name a few.



Last but certainly not least, qiibee has been enthusiastically picked up by the media across the globe, with some of the most prominent news outlets, covering our project: We’re talking news-heavyweights such as Forbes, CNN, Nasdaq, and Bloomberg to name a few. And we are positive that we will continue to gather attention from around the world…as we have the product, team, and vision to knock your socks off! 🚀

Join us NOW (before it’s too late)👉 https://qiibee.com/tokensale


Disclaimer:All of the information presented in this blog post is tentative and is subject to change at any time. None of the information herein should be construed as legal, accounting, or investment advice of any kind. This blog post does not represent a solicitation for investment, nor does it represent an offering or sale, public or private, of any kind of financial instrument, security or otherwise, in any jurisdiction. This blog post is provided as-is, for informational purposes only, with the intention of describing a prospective software system.

13  Economy / Service Discussion / what are my options for paying bitcoin with it comes to flying and vacations? on: September 15, 2018, 09:54:20 PM
If i want to buy flight ticket with bitcoin or book some nice hotel/airbnb style
car rent etc

what are my options?
will be great if you share some useful links here
14  Bitcoin / Bitcoin Discussion / Do you reccomend family and friends to join the market when it's crashing? on: September 09, 2018, 08:58:26 AM
Do you recommend family and friends to join the market when it's crashing?
We pray for the prices to go up and to more people join the market, but will you recommend someone close to you to join when the prices are dropping like crazy?

If you do, explain why.
15  Economy / Speculation / How do you think Bitcoin & Crypto would look like in 10 years? on: September 07, 2018, 11:35:00 AM
I see a lot of people claims that crypto is the currency of the future and in few years the value of one BTC would be around 70-100k
How do you think this industry will evolve in the future and what would really happen?

Remember the date, 10 years from now we can come back and see if we right XD
16  Economy / Economics / If the stocks market will crash again like 2008, what will happen to bitcoin on: September 07, 2018, 07:49:53 AM
If the stocks market will crash again like 2008, what will happen to bitcoin?
I personally think that people will take their money out and will invest it somewhere else.

Do you think that bitcoin will be a good alternative?
17  Bitcoin / Bitcoin Discussion / Do you think that the HODL approach is good bitcoin? on: September 05, 2018, 03:00:43 PM
Do you think that the HODL approach is good bitcoin?
Sometimes I think that because so many people HODL it makes is easier for some big players to manipulate the price.

I wonder what the community think about it.
I personally HODL for almost a year, I made some money and lost some money, But generally, I'm positive about the long run. I'm just curious about the fact that maybe we are the one who make it possible for big companies to influence the price in such an easy way
18  Bitcoin / Bitcoin Discussion / Anyone here got into crypto before 2017? How was it before the hype? on: September 05, 2018, 08:45:43 AM
I spoke with few friends recently about the hype that the crypto market received at the end of 2017.
I wonder how was it before 2017.
Was the market easy to manipulate?
pump and dumps were more common?
Were people more into ICO's? the ICO image was better than it is today?


19  Bitcoin / Bitcoin Discussion / What new feature could potentially make bitcoin more valuable? on: September 01, 2018, 04:27:29 PM
I know that it's kinda 'big' question but it will be great to see what the community think about that.

what do you think can cause the price to go up?

20  Bitcoin / Bitcoin Discussion / What will happen to my Bitcoins if I divorce? on: August 24, 2018, 11:03:31 AM
I was always wondering what will happen to my Bitcoins if I divorce? By the law, my wifi needs to get 50% of all the bitcoins?
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