Welcome to the Age of ICOs
Startups are pioneering the use of blockchain technology, and they are quickly starting to gain mainstream attention. These startups are not only changing the way we track, store and send information, but are also creating a brand-new way for smaller businesses to raise capital. This new model of funding is called an initial coin offering, or ICO. This model can also be referred to as a â€œcrowdsaleâ€ or â€œtoken sale.â€ ICOs function as a hybrid model of stock IPOs and crowdfunding pre-sales that greatly reduce the barriers to entry for both investors and businesses alike (similar to Kickstarter). Instead of a stock, these innovations offer cryptocurrency-based tokens to the public, specific to their own initiative.
These tokens can serve a myriad of purposes that vary depending on the platform they are created for. In exchange for tokens, businesses generally receive either bitcoin (BTC) or ether (ETH) and use the raised funds to pay out their team and cover future expenses.
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