Oh, I See! I.C.O.
Initial Coin Offering, aka ICO, is pretty much like that of IPO in the traditional sense. IPO, Initial Public Offering, is a way for a company to raise funds from the “public” to expand its operation. You see, for a company to scale its operation, it needs funding or capital. Otherwise it may need to wait longer. It needs to save its profit for a longer period before it can fund its own expansion.
Raising funds from the public, however, can afford companies access to a large pool of capital to be used for scaling. The public, in turn, receive a piece or pieces of ownership of the company. This ownership is commonly called a stock. When stock price goes up, the investors (public) can benefit from it. If they have bought stocks at a lower price, they may already have profited from the increased value of the stock of the company.
With blockchain, the fund raising is in the form of an ICO. However, ICOs don’t have to go through rigorous governmental regulation like their IPO fundraising counterpart. This is a different ballgame. Pretty much anyone can buy a piece of stock, in this case, a coin or coins. And this is not only confined in one geographic area.
ICO investors can be someone from the caves of Uzbekistan. As long as he has access to an internet connection, he can participate in an ICO of a crypto company located anywhere in the world, whether it be in Silicon Valley in California, or Silicon Wadi in Israel.
Blockchain technology is a game changer. This is like the Gold Rush, where the innovation is so fast paced that the government and its regulatory bodies cannot keep up with it. Even the crypto companies and leaders can’t keep up with the latest in the blockchain universe.
This form of fundraising, ICO, is so shocking to the regulators that they try to find holes in the technology and hold the companies accountable. But essentially that is what you get when the common public is sick and tired of the centralized system because it can be corrupted.
If you see a pattern here, even history tells us a similar dynamic. When people revolt against the oppression of the ruler(s), they try to either create their own system of governing themselves or try to take down the existing structure. Bitcoin, the first application of blockchain technology, itself is a reaction to the 2008 financial crisis. The creators of Bitcoin for sure were tired of the financial system that they wanted to break away from it.
This reminds me of the saying: “Necessity is the mother of invention” when you are pressed against a wall, all you can do is to just be bold enough to extricate yourself away from being stuck. It seems that things happen for a reason. In fact, many innovators could not have invented their products or technology had it not been from either necessity or desperation.
Now back to ICO. This may seem like it’s a technical innovation, but it’s also a social innovation. You see, innovation may usually be thought of as technical, like a tangible object such as a smartphone; but essentially, innovations can also be social. In fact, money can be considered a social innovation. Money is a an agreement among people that it has value, it can be stored, and exchanged. Without the agreement, the bill you are holding may not mean anything at all.
ICOs may look like it’s a technical innovation. Yes, it is both. While the coins are held in the blockchain, a technical innovation, there is still an element of consensus, an agreement that it has value. The point is that as long as there are human beings living on this ball-shaped rock traveling in space at breakneck speed, we will always have innovations in different shapes and form.
The theme of this article, “Oh, I see; ICO”, signifies the importance of educating ourselves and embracing change. Haven’t you had any light bulb moment when you understood a concept that you took for granted before? You may exclaim: “Oh, I see!” after you have wrapped your head around an elusive notion. Then after you understood it, you can now view it from an elevated plain, a more holistic perspective.
That way you don’t have to be afraid of the change anymore. We only fear what we do not understand. And with fear come other emotions, such as anger, threat, apathy, and so on. Therefore, stop being fearful of blockchain and crypto. Actually, crypto sounds similar to “creepy.” We tend to associate what we don’t understand with things we already understand. And depending on our development, we may just automatically fear something we don’t understand.
In this publication, NEAR Protocol Philippines, we create blockchain and crypto-related themes and topics, so our readers can have a bigger picture of the concepts and its applications in the real world. That way you can little-by-little wrap your cognitive head around these seemingly esoteric concepts.
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