Revolutionizing Blockchain
The growing popularity of cryptocurrencies owes everything to the system that makes it all possible — the blockchain. Basically, this is a highly secure digital ledger that's decentralized because of the way it records information and transactions. It's already impressive as it is, but the innovators behind blockchain startup Tezos want to take the technology even farther.
Tezos is a new crowdfunded blockchain. It allows for consensual upgrades to its protocols, which empowers it to govern itself via what the Tezos white paper calls a "self-amending" cryptoledger. "It 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 claims.
Now, to get it's blockchain up and running, Tezos is running an "initial coin offering" (ICO) through Bitcoin and Ethereum funding. At the time of this writing, the Tezos ICO has already received 53,418 Bitcoins and 273,068 Ethereum. That's roughly $207 million at current valuation, making the Tezos ICO the largest "crypto-funding" to date. Moreover, the Tezos ICO is uncapped — there's no upper limit to how much funding the company can raise, given the remaining eight days of crowdfunding it has left.
The ICO Phenomenon
What is an ICO, anyway? Laura Shin describes it wonderfully in an article she wrote for Forbes. "An ICO is what you get if bitcoin and Kickstarter had a baby — a crowdsale of a new crypto asset (with a cryptocurrency like bitcoin being one type of crypto asset) that powers some kind of peer-to-peer blockchain network," she wrote.
Essentially, Shin wrote, it enables companies to develop new business models while "making a lot of money for the developers and entrepreneurs who are launching them." Instead of relying on the usual funding channels, ICOs give businesses a huge amount of leeway. However, it's not without its dangers. "And we’re not really sure how legal they are," Shin added.
"ICOs which are uncapped are dangerous as they imply and show a complete disregard for corporate discipline — and to an extent an element of disrespect for the investor," Charles Hayter, CEO of CryptoCompare, told Mashable. "The question that needs to be asked is can the job be done with less money (...) and that throws a spotlight on the fairness and truthfulness of the proposition being offered."
But despite its yet unsolved legalities, ICO crowdsales have become popular. Prior to Tezos, there was that recent Bancor ICO which raised $153 million. It's proof that blockchains and cryptocurrencies are, indeed, changing the way we conduct business.
Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.
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