Overstock, the eCommerce giant and Telegram, the mobile chat application, have both turned to ICOs to raise capital for their new ventures. Overstock launched an ICO to fund its new platform and cryptocurrency, tZERO, due to the uncompromising privacy it offers. Telegram, on the other hand, has gained huge popularity among the crypto community and has become an important tool for ICO marketing. Telegram plans to launch a chat platform, equipped for cryptocurrency payments. Its private ICO has raised $1.7 billion as of November 20, 2018.

Why ICO?

Here’s a look at why businesses are looking at ICOs as a viable means to raise funds:

1.      Gives life to innovation

ICOs can be said to be a combination of a coin offering and crowd funding. This is why, instead of relying on traditional means of funding, such as venture capital, companies look towards the community to back their idea. ICOs can be a good way to build acceptance among the public for an innovative solution.

2.      Creates a Community

ICOs not only provide funding, but also create a community around your project, because anyone can participate in an ICO. A well planned ICO marketing strategy will enhance the outreach of your ICO and will help build trust among a wider audience base.

3.      Saves Shares of the company for future

Choosing the ICO route gives additional options for raising capital by selling shares or additional coins in the future. It provides a long-term strategy for raising funds at various points of time.

So, Should You ICO?

A number of questions should be answered for you to understand whether ICO is the best route for your business, such as:

  • Does your business model easily lend itself to blockchain?
  • Do you need to issue your own token?
  • Is the token key to the product/service being offered?
  • Do you have strong network effects?
  • Can your company afford the legal fees necessary for an ICO?

If the answer to all the questions is yes, then you an ICO could be a good option.

Industries that Can Benefit from Blockchain

Today, applications of blockchain technology are being researched across almost every industry, from banking and payments to supply chain and even real estate. Here’s a look at some other industries that can benefit from an ICO.

1.      Music and Entertainment and Intellectual Property Rights

The security blockchain-based decentralised networks provide advantages for safeguarding intellectual property rights across all industries. Entrepreneurs have started using smart contracts, backed by blockchain, to distribute revenue generated on the purchase of artwork to the parties holding rights to that piece of work. It will also reduce cases of piracy and increase revenues for artists.

Ascribe.io provides a trackable authentic record of ownership between Intellectual Property and the artists owning them.

2.      IoT and Networking

Blockchain offers vast potential in IoT and networking. IBM and Samsung have started using ADEPT, which works using a blockchain-like technology. The blockchain works as a distributed ledger for a number of devices, which communicate via blockchain instead of using a centralised server. It enables these devices to work in absence or during the failure of a central server, thus enhancing security and eliminating the risks associated with single point failure.

3.      Cab Services

Taxi services like Uber operate on centralised systems, controlling the network of cabs and drivers. They act as the central authority that decide fares and maintains control over the floor via an algorithm.

Arcade City is a startup that provides all riding transactions on a blockchain system. This is lucrative to cab owners or drivers who want to operate independently. Arcade City works similar to Uber’s application, but provides full autonomy to drivers to decide fares, while charging a percentage of the fares as its fees.

4.      Forecasting

Records of transactions, if stored on a blockchain, could provide a strong base for analysis, research and forecasting. This will ensure that the data is not tampered with and is maintained in its original form. It will also prove beneficial for further advancements in the field of AI, machine learning and targeted predictions.

5.      Voting

Voting in an election requires authentication of voters, database to collect votes and crosschecking to confirm the turnout of voters. Use of blockchain will eliminate the problem of voter frauds and foul play during elections.

Various firms have implemented the use of blockchain in voting done in board meetings. In fact, Sierra Leone used blockchain for its polling in March 2018.

There are clear benefits of using the ICO route to raise funds over other means, but you need to be sure that this is the most feasible one for your business. Remember, while blockchain offers almost limitless potential, it might not be suitable for every type of company.