{"id":390,"date":"2018-08-28T17:30:09","date_gmt":"2018-08-28T15:30:09","guid":{"rendered":"http:\/\/blog.satt-token.com\/?p=390"},"modified":"2022-02-25T16:44:05","modified_gmt":"2022-02-25T15:44:05","slug":"the-origins-of-ico","status":"publish","type":"post","link":"https:\/\/satt-token.com\/blog\/archives\/390","title":{"rendered":"The origins of ICO"},"content":{"rendered":"

In the real world, companies can always secure funds by approaching angel investors and venture capitalists but by doing that, they would have to give away a share of their equity to them. What companies wanted, was to get a lot of funds without giving away equity and ownership. The only way that they could do that was by going public.<\/span><\/p>\n

The way companies do this is by holding an IPO aka Initial Public Offering. How does an IPO work?<\/strong><\/p>\n

Basically, a private company decides to put up its private shares up for sale to the general public. Anyone and anywhere can buy the shares of the company. Initially, these shares are low-priced and if the company hits it big then there is a chance of your shares rising up to enormous prices. We have all heard stories of the masseuse who became a multi-millionaire after her 500 \u201cuseless\u201d stocks in Google matured over time.<\/span><\/p>\n

So, people started wondering what would happen if we used the same concept and put it on a blockchain based environment. This is how the concept of ICOs was created. They are pretty similar to IPOs but with 3 major differences.<\/span><\/p>\n

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Firstly, the ICO was decentralized with no central authority.<\/span><\/p>\n

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Secondly, they lacked the tedious red tape that most IPOs were bogged down by and finally, they were unregulated while IPOs have always under been heavy regulation.<\/span><\/p>\n

Now there was a problem that blockchain based companies were facing when it came to ICOs. In an IPO, the investors got shares in return of their investment. What would a blockchain based company give away in exchange of capital? They had to invent the blockchain equivalent of a share.<\/span><\/p>\n

So they came up with the idea of \u201cTokens\u201d<\/strong>.<\/span><\/p>\n

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Table des mati\u00e8res<\/p>\n