Ankur Agarwal holds a knowledgeable authority when it comes to boosting startup business via ICO and Email Marketing. He is has invested in different platforms and made them a great success through consultation and strategies. A recent talk with him reflects his views on ICO for startups.
Blockchain, the next generation of internet holds vast promises for every businesses and individual. Startup founders and companies who are trying to raise the capital investment and to fund their companies are embracing the Initial coin offering system. The initial coin offering or initial token offering is a special kind of crowdfunding method that has been used by startup companies, especially the software industry to fund their efforts.
Company use cases of Blockchain technology:
- Firstly, you have a public and a private blockchain. For example, Bitcoin and Ethereum are public blockchains. However, they have some drawbacks and scalability is one of them. You can’t have a hundred transactions per second on any coin. Therefore there are a few private technologies that you can use in order to develop private blockchain solutions. So some of them are like Hyperledger, Multichain, and Stratis. You can build things on the public blockchain, but if they are too slow and you can’t solve your problems using public blockchain, you can always use the private ones.
- You need to think about the pain points. When it comes to transparency and accountability, they are present in many industries, and manufacturing and supply chain is one of them. For example, you are selling clothes. You are required to show your customers that they can scan the QR code embedded on your products and they can exactly know where those clothes have been produced. The idea of maintaining a normal database is quite vague as that can be changed or altered by people who have the control. Thus, the concept of Origin technology is really helpful when one wants to track exactly where this product was produced. Just like in Bitcoins, no one can mess with the transactions.
- When you manufacture the things that are delicate or need to handle gently, all the important parts of these products need to be certified and verified. And currently, manufacturing is losing millions of dollars each year. Because the party before you in the supply chain or the company you’ve got your parts from didn’t have the correct certification nor the up to date documentation. This is where blockchain technology saves the day.
- When you buy an advertisement on Facebook, how can you trust the numbers they are showing? Due to the lack of transparency, a lot of money is wasted because of the scams and presence of middlemen. So the blockchain removes these middlemen. The advertiser can pay you directly for your attention. You are doing business on the blockchain and using decentralized applications that run on the blockchain. So removing middlemen will revolutionize advertising in social media platform.
ICO or token sales and investments:
- In a blockchain firm, the company develops a token that is used as a utility or application. Then this token is specific to the platform that they are developing and they want a crowdfunding campaign to the contributors or to the investors. Then the investors in the campaign will send an amount of value in the form of an actual currency token like Bitcoin or Ethereum to the company. This is then sent directly to the company or sent through a special blockchain based application that runs on the blockchain called a smart contract. Now in return, the investor receives a corresponding amount of the specialty utility token that gets converted like market spot prices. Let us say the value of Bitcoin is $8000 when they send it to the company and the specialty token is being sold at $1 each, the investor is going to get 8000 of the project utility token for a whole Bitcoin. Then the company funds the development of their project by paying for salaries and all of the fixed overhead things by selling the currency tokens off on the open market in exchange for the actual fiat dollars in currency to pay for expenses.
- From the startup perspective, token sales are awesome because they represent quick and direct access to the market for the capital formation. There is no broker or intermediary to deal with. In the case of blockchain software start-ups, selling utility tokens represents non-dilutive capital. That means you’re not giving up equity in your company as a utility token.
- For investors, they’re putting money into the startup projects and tokens represent a solution to one of the big problems that is liquidity. So tokens are easily tradable either directly or via cryptocurrency exchanges immediately when they’re listed. So the investor looking at the landscape can still get the opportunity for returns through the growth of the value of the tokens without necessarily locking up their capital for long. Consequently, early-stage investment on a global basis has become easy for the people worldwide to move their money into the projects they like. It’s super easy for someone in India to buy into a startup in Australia with tokenized blockchain investing.
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