STOs are emerging to be the new way of crowdfunding since they offer investors with the governance and protection that isn't provided by ICOs. A Toronto-based company, Node Blockchain Inc., has published a recent study (https://drive.google.com/file/d/1Kuwu0bWR8Mk5TOErJ1QNBbM3bLj0T6_p/view) supporting the idea of STOs being the future fundraising methods to support the growth of the blockchain industry.

An ICO issues either a coin (cryptocurrency) or utility token. STO issues a security token, which is a digital stock certificate. It is different from a utility token. A utility token is treated to be a commodity, like gold with a useful value, but isn't used for security. To compare STOs and ICOs in detail, we need to explore the concept of security first.