ICOs eased the way to start a business — and damaged its original purpose
Thousands of start-ups chose already to get funded via own cryptocurrency during an ICO. This development however undermines the original purpose of Blockchain and the use of cryptocurrency.
The problem with ICOs
ICOs are nowadays a very popular funding model and can be a powerful tool. They allow projects to kick-off outside the traditional VC methods and without founders who bring in the company’s assets. ICOs are targeting towards gaining investor’s trust through the potential of the entire project.
Unfortunately, this is why ICOs were soon abused by scam artists and opportunists. Misuse has brought distrust in the underlying technology. Far more too often, blockchain is getting associated in one breath with cryptocurrency. The focus on new blockchain projects almost immediately shifts from the product to its coin.
Since the rise of Bitcoin and other cryptocurrencies many people dream of becoming a millionaire overnight. No one can blame that people have dreams but the misuse of a great tool resulted in empty promises, shattered dreams for the believers and a damaged image.
The tricky question
The first question must be: Do you really need to use Blockchain for your Business? And the second: Do you really need to launch an ICO? Only if both questions have a different reson than raising quick funds, you might proceed. But the hard part is not yet to be over. Only if you are having a product or service what is good enough to be valuable by itself and what will function with the connected cryptocurrency, it will make sense to do an ICO for fundraising.
LoveBlock.one and Blockchain
The reason for all the talk on cryptocurrency and blockchain isn’t just purely hype — there are really some true meaningful benefits in the underlying concept of Blockchain no one can deny. These are essential for the LoveBlock System what operates on Blockchain and has an own token.
Blockchain is decentralized with no single computer housing user data. The way the network is constructed also makes it immutable — removing the threat of hacking or data loss, giving rise to huge security enhancements compared to the platforms of today.
With the secure nature of the blockchain you can be guaranteed the validity of data as it can be easily verified. The area of operation for LoveBlock is Online Dating what has been plagued by scams, fraud and data breaches for many years.
A secure method is of huge importance in building a platform for the dating industry to eliminate fraudulent behavior. This is also of significance in securing transactions of currency and data on the platform, by ensuring they are immutable and unchangeable. This key feature makes it possible to link fraudulent activities to their exact origin.
As a result, with the loveblock.one blockchain platform the whole industry can be removed of fraud and fake profiles at the source. The LoveBlock blockchain will allow any dating platform to join to secure their own service. The platforms will then be able to share encrypted data on scammers to rid them completely from the systems, this will drastically improve user experience and providers will be rewarded with the LoveBlock DDD token to encourage this positive behavior.
The DDD token — backed by users
To allow a decentralized interaction on its blockchain, LoveBlock is establishing its own token. But creating a coin just that some businesses can exchange some information and getting paid is not justifying its existence. The purpose of DDD is therefore much more complex: It is getting integrated into its partners what means that users on these platforms are using DDD or will be using it.
For example, LoveBlock partnered earlier this year with dating app Luxy. Right now, Luxy is already accepting DDD to purchase all membership subscriptions and on-platform goods.
Only a high-demand token ensures stable and reliable prices and can function as a platform currency. And this is were most projects that perform an ICO are lacking in: The coin is misused for raising quick money. After the first exchange period, every token holder is divesting, the value of the coin reaches zero and usually the project dies, as well.
In the end it is a matter of decision. Every founder has to check weather an own coin can be valuable for the product in the long-term. If not, additional fundraising options should be taken into consideration. They might be more benefitting if the new product should make it on the market.
About LoveBlock
Founded in 2017, LoveBlock is building an infrastructure to exchange security-relevant data about dating to combat fraud. On LoveBlock, entities can interlink, request and share information in order to improve security and limit fraud attempts.
For more information, please visit www.loveblock.one
