Bitcoins and altcoins are now being used as a source for fundraising . New startups are using the block-chain technology to fund their companies in more decentralized way. That obstacle of finding funding sources blocked many tech startups from gaining customers and running the business.
Now new startups can use block-chain technology to create new way for collecting funds needed for their companies to start running. For example startup Mastercoin managed to raise $500k back in 2013 which is based on bitcoin block chain. Another astonishing example is DAO "Decentralized Autonomous organization" which was built on etherum block chain raised an equivalent of $150 million last year.
Startups manage to raise money using "ICO" which stands for initial coin offerings. this year so far there has been around 25 icos which raised around $160 million. Initial coin offerings are selling or offering tokens "coins" to users or investors in exchange for a service or product. So if your customers are taking tokens they will want or be incentivized to expand the company customer base and want the company to be more successful which in turn will raise the value of the tokens.
These tokens value is decided by the founders and based on their expectations for market demand. Usually tokens are purchased using digital currencies or fiat currencies. Value may be appreciated over time and that in turn will be in the benefit of early investors or users buying tokens during the initial coin offerings.
Now new startups can use block-chain technology to create new way for collecting funds needed for their companies to start running. For example startup Mastercoin managed to raise $500k back in 2013 which is based on bitcoin block chain. Another astonishing example is DAO "Decentralized Autonomous organization" which was built on etherum block chain raised an equivalent of $150 million last year.
Startups manage to raise money using "ICO" which stands for initial coin offerings. this year so far there has been around 25 icos which raised around $160 million. Initial coin offerings are selling or offering tokens "coins" to users or investors in exchange for a service or product. So if your customers are taking tokens they will want or be incentivized to expand the company customer base and want the company to be more successful which in turn will raise the value of the tokens.
These tokens value is decided by the founders and based on their expectations for market demand. Usually tokens are purchased using digital currencies or fiat currencies. Value may be appreciated over time and that in turn will be in the benefit of early investors or users buying tokens during the initial coin offerings.