What Makes Tezos ICO Indisputable Leader Of ICO Empire
Tezos and ICO, If you have been associated with the cryptocurrency sector lately, then these two keywords would have been definitely bouncing around your notifications and your favorite crypto-blogs (Like our updates too? Drop a feedback and your rating at our facebook page now!). And if you don’t know what the hype is about, read on.
Basic Intro To ICO
The word ICO has been causing quite the stir in the financial sector when it comes to digital currency. To break it down, an ICO (Initial Coin Offering) would be the name given to Kickstarter and Digital Currency’s love child.
It is a funding process on the likes of an Initial Public Offering (IPO), the difference being that instead of selling stocks, the company offers a number of cryptocurrency tokens. To a lay man, it can be referred to as a Token Crowdsale.
Essentially, the company lays down a few guidelines for the sale and people invest in it. Instead of relying on the usual funding channels, ICOs give businesses a huge amount of leeway and as observed recently, an incredible output to their effort.
The general pattern for an ICO is to set a time limit and an upper cap on the number of tokens being sold. Once the limit has been reached, the sale ceases to exist and the owners can do as they please with their tokens. These tokens have a value and can be traded like normal tokens. In fact, after a successful ICO, the value of the token might even double.
Offering Love-Hate Tokens
ICO’s are undoubtedly increasingly being known as revolutionary business funding models. But they have had to deal with their share of criticism over the morality of the concept.
You see, the entire idea of an ICO solely rests upon the public buying tokens in anticipation of the final product. Companies earn millions of dollars without even showcasing the product let alone launching it to the market. And this is being labeled as unethical by many individuals and organizations. And we haven’t even dived into the legalities of the same.
Nick Tomaino in an interview with Laura Shin of Forbes said, “If you look at the past 10 years in startups broadly outside of the blockchain world, pretty much every company that has raise money pre-product has failed.”
But even with questionable legalities and unethical claims, ICO’s have raised more than $350 Million for companies and startups trying to launch a new idea into the market. And that in itself is proof that public is open towards shifting to a blockchain and cryptocurrency oriented world.
A Tezzie-d market
Prediction market Augur raised around $5.2 million USD over two months in 2015; this year, its competitor Gnosis raised $12 million USD in just 15 minutes through an ICO. A few days ago, a startup called Bancor raised around $153 million USD in two hours and twenty-five minutes ONLY.
And now, taking the world by storm is Tezos. 6 more days left for the uncapped Token Crowdsale to end, and the startup has already earned a funding of more than $200 Million USD. According to the official website, 52,584 XBT and 294,503 ETH have been contributed to the sale so far. And this is only the beginning.
Investors received 5,000 Tezos Coins per bitcoin without any bonus. Early bird investors were given a 20% bonus on the purchase of coins making it 6000 Tezzies per Bitcoin. Given that in the starting of July, the price of 1 BTC was close to $2,550 USD, 1 Tezzie approximately equaled $0.51 cents without the bonus and $0.425 cents with the 20% tacked on top.
So what is Tezos?
In their technical white paper, the developers have described Tezos as a ‘Self-Amending Crypto Ledger’. In simple words, this new type of blockchain allows for consensual upgrades to its protocols, which empowers it to govern itself. Tezos is a highly secure digital ledger that’s decentralized because of the way it records information and transactions. And the hands behind it want to take the technology even farther.
Their website claims “Tezos facilitates formal verification, a technique which mathematically proves the correctness of the code governing transactions and boosts the security of the most sensitive or financially weighted smart contracts,”
Tezos can instantiate any Blockchain based ledger, it supports meta upgrades i.e. it can evolve by amending its own protocols through a voting procedure (Even the voting protocols can be amended), and in addition not only is its seed protocol based on a Proof-Of-Stake system, but it also supports the Turing Complete Smart Contracts.
Most importantly, Tezos is its own blockchain, not a derivative on other blockchains like Bitcoin or Ethereum. As tokenmarket puts it, “Tezos is a secure, future-proof smart contract system. Because Tezos has a built-in consensus mechanism, its protocol can evolve, and incorporate new innovations over time, without the risk of hard forks splitting the market.
The Tezos smart contract language is such that it makes it easier to apply formal verification to any smart contract running on the Tezos blockchain. This means that developers can rule out weaknesses in code before uploading it. Tezos relies on a less onerous, less computationally intensive, and less power-consuming proof-of-stake consensus algorithm, where bonded stakeholders validate transactions.”
So even if the method by which Tezos is raising funds is being criticized immensely, the foundation stones upon which Tezos has been built is firm enough to revolutionize the blockchain agenda.
Follow us for more updates. Stay blockchain-ed!