Ethereum Tutorials



ICO Toolkit FAQ

Q: What is the difference between Tokens and Shares?

A: Tokens are used in most of Ethereum crowd funding campaigns. They can be used as "proof of payment", but in reality, no one cares. It means that the company has no legal bounding obligations to reward token holders. Think about it: after token is sold (during the ICO), it can be traded on secondary market (online exchanges). But, unless a company promiced otherwise, there will be no "buy back" at a specified price, no dividends... Token is a speculative tool. Of course there are exceptions, but they are rare.

As for the Share, it is a totally different animal. Stock acts as a cumulative account, and (it is written in an Ethereum contract) a pre-defined fraction of company's profit is automatically being sent there.

Price of the Share can only go up. It is a tool that allows to make a share holder an owner - just like a "real world" share (except no price fluctuations).

Please refer to ShareHolder Manual for details.

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