Cryptocurrencies, ICOs (Initial Coin Offerings), and Token Sales are the hot new thing in tech today. Many companies are turning to ICOs to raise money instead of bootstrapping or turning to Venture Capital. Why? Well according to Fred Ehrsam, co-founder of Coinbase, a few key component of tokens are:
- They are the currency that is used in the app itself.
- Contributors to the app are directly paid for their contributions in tokens. This can be extremely granular.
- The tokens are easily converted to any local currency since they are on the blockchain.
A new business model is being created from this, the decentralized business model. Companies get to create their own economic ecosystems. It is unique because it is enabled by the internet and cryptocurrencies.
You can read more about this new business model here