by The Economist on “initial coin offerings:” Many ICOs are designed to finance applications that will make use of the blockchain … In some cases, the “coins” can be exchanged for services on the site. In a way, this is like selling air miles in a startup airline; investors can either use the miles for flights or hope they can trade them at a profit. For the business, it is also a way of creating demand for the product they are selling. But in plenty of cases, an ICO is just a way of raising capital without all the hassle of meeting regulatory requirements, or the burden of paying interest to a bank.
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Dirk Niepelt considers the following as important: Blockchain, Distributed ledger, Initial coin offering, Notes
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The Economist on “initial coin offerings:”
Many ICOs are designed to finance applications that will make use of the blockchain … In some cases, the “coins” can be exchanged for services on the site. In a way, this is like selling air miles in a startup airline; investors can either use the miles for flights or hope they can trade them at a profit. For the business, it is also a way of creating demand for the product they are selling.
But in plenty of cases, an ICO is just a way of raising capital without all the hassle of meeting regulatory requirements, or the burden of paying interest to a bank.