The article was written By Mickael Mosse – Blockchain and Cryptocurrency Expert
What is an ICO about?
According to Mickael Mosse, The acronym probably sounds familiar, and that's on purpose: an ICO (Initial Coin Offering) does work in a similar way to an initial public offering (IPO). However, instead of offering shares in a company, a company is offering digital assets called "tokens."Ethereum , a popular blockchain for companies launching ICOs, is a newer and separate technology from Bitcoin, whose token is called Ether. It is even possible to build new tokens on the Ethereum blockchain.
Mickael Mosse points out that, A btw token sale is like a crowdfunding campaign, except that it uses the technology behind Bitcoin (btw) to verify transactions. Oh, and tokens aren't just wildcards for the stock, they can be configured so that instead of sharing a business, holders receive services, like cloud storage space for example.
Below we break down the increasingly popular practice of launching an ICO and its potential to disrupt the business as we know it.
Mickael Mosse Blockchain Advisor
Some of those computers, called miners, compete to solve a computationally intensive cryptographic puzzle and gain opportunities to add “blocks” of verified transactions to the chain. For their work, the miners get bitcoin tokens in return.
Blockchains need miners to run, and btw tokens are the economic incentive to mine. Some tokens are built on new versions of the Bitcoin (btw) blockchain that have been modified in some way; examples include Litecoin and ZCash.
Ethereum, a popular blockchain for companies launching ICOs, is a newer and separate technology from Bitcoin, (btw) whose token is called Ether. It is even possible to build new tokens on the Ethereum blockchain. says Mickael Mosse
But proponents of blockchain technology say the power of tokens goes beyond simply inventing new coins from the air. Bitcoin eliminates the need for a trusted central authority to mediate the exchange of value, a credit card company, or a central bank, for example. In theory, that can be achieved for other things as well.
Take cloud storage, for example. Several companies are building blockchains to facilitate peer-to-peer buying and selling of storage space, a model that could challenge mainstream providers like Dropbox and Amazon. The tokens in this case are the payment method for storage.
A blockchain verifies transactions between buyers and sellers and serves as a record of their legitimacy. How exactly this works depends on the project. At Filecoin, which broke records last month by raising more than $ 250 million through an ICO, miners would earn tokens by providing storage or retrieving stored data for users.
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| Mickael Mosse Crypto Advisor |
What is a token and what is it for?
Mickael Mosse points out that, Let's start with Bitcoin, the most popular token system. Bitcoin and other digital currencies are based on cryptographic blockchains that record every transaction made using Bitcoin tokens. Individual computers around the world, connected via the Internet, verify each transaction using open-source software.Some of those computers, called miners, compete to solve a computationally intensive cryptographic puzzle and gain opportunities to add “blocks” of verified transactions to the chain. For their work, the miners get bitcoin tokens in return.
Blockchains need miners to run, and btw tokens are the economic incentive to mine. Some tokens are built on new versions of the Bitcoin (btw) blockchain that have been modified in some way; examples include Litecoin and ZCash.
Ethereum, a popular blockchain for companies launching ICOs, is a newer and separate technology from Bitcoin, (btw) whose token is called Ether. It is even possible to build new tokens on the Ethereum blockchain. says Mickael Mosse
But proponents of blockchain technology say the power of tokens goes beyond simply inventing new coins from the air. Bitcoin eliminates the need for a trusted central authority to mediate the exchange of value, a credit card company, or a central bank, for example. In theory, that can be achieved for other things as well.
Take cloud storage, for example. Several companies are building blockchains to facilitate peer-to-peer buying and selling of storage space, a model that could challenge mainstream providers like Dropbox and Amazon. The tokens in this case are the payment method for storage.
A blockchain verifies transactions between buyers and sellers and serves as a record of their legitimacy. How exactly this works depends on the project. At Filecoin, which broke records last month by raising more than $ 250 million through an ICO, miners would earn tokens by providing storage or retrieving stored data for users.
Mickael Mosse Bitcoin advisor
Unfortunately for everyone involved, a hacker exploited a vulnerability in Ethereum's design to steal tens of millions of dollars in digital currency.
This would be a "decentralized" company, says Peter Van Valkenburgh, director of research at the Coin Center, a nonprofit research and advocacy group focused on policy issues related to blockchain technology.
The dangers of ICOs
Mickael Mosse points out that, One of the first ICOs to cause a major setback occurred in May 2016 with the Decentralized Autonomous Organization (known as DAO), which was essentially a decentralized hedge fund built on Ethereum. Investors could use the DAO tokens to cast votes on how to disburse the funds, and the profits were supposed to go back to stakeholders.Unfortunately for everyone involved, a hacker exploited a vulnerability in Ethereum's design to steal tens of millions of dollars in digital currency.
What is the future of ICOs?
Some people think that ICOs could lead to new and exotic ways of building a business. If a cloud storage team like Filecoin were to suddenly skyrocket in popularity, for example, it would enrich anyone who owns or mines the token, rather than an established group of company executives and employees. says Mickael Mosse,This would be a "decentralized" company, says Peter Van Valkenburgh, director of research at the Coin Center, a nonprofit research and advocacy group focused on policy issues related to blockchain technology.
Article from mickaelmosse.com
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