Blockchain has been an enormous trend in the recent market and technological world. Ever since the invention of Bitcoin in 2009, the speculated founder Satoshi Nakamoto has been silent. No one knows the true origins of Bitcoin. But everyone knows about the technology and the development of Bitcoin or cryptocurrencies or blockchain in total.
Businesses and developers quickly found that Bitcoin or the technology it uses could be more than just coins hidden from the real password. With these developments, there came more cryptocurrencies and finally, the ICOs (ICO stands for Initial Coin Offering).
What qualifies as a Blockchain business?
Blockchain businesses are the businesses where people use the blockchain technology and provide services. Blockchain business provides a client to provide a secure platform to build up smart contracts to complete very secure transactions. The Blockchain based technology of smart contracts can help businesses to offer services directly to the customers, while removing the middle man.
Cryptocurrencies and ICO projects use blockchains. However, not all blockchain businesses are cryptocurrencies or ICO projects. Blockchain can be simply used in other ways, like in a blockchain based voting machine, or blockchain based services, to offer services anonymously.
What is a Cryptocurrency?
Cryptocurrencies are a type of currencies, but they only exist as simple segments or phrases of codes. Like Bitcoin, Litecoin, Ethereum, etc. there are over 1300 cryptocurrencies. Out of these, some are ICOs for a project. Cryptocurrencies are digitalized and decentralized currencies that are available on the online market. They can be bought on exchanges and can be used for various things. Nowadays, cryptocurrencies like Bitcoin, can be used to buy properties and some cryptocurrencies are also available as debit cards which can be used in the real world as a VISA card to shop in the market.
Cryptocurrencies are available to the public to get away from the centralized fiat currencies of the real world. Cryptocurrencies use the technology of blockchains to make themselves self-sufficient. The smart contracts of the blockchains allow the users of cryptocurrencies to perform transactions without a central organization controlling its flow and values. Through the smart contracts, the cryptocurrencies become truly decentralized.
What in the world are ICOs?
ICO stands for Initial Coin Offering. This is a fundraising mechanism for any company or organization that is developing a blockchain based business or technology. In ICO, the projects sell their self-developed token, mainly in exchange for Bitcoin or Ether. ICO are similar to IPO (Initial Public Offering). They are relatively new in the blockchain and cryptocurrency world.
ICO are used by many companies that are still developing their projects. The funds that they gain from this are entirely used to develop their respective technologies. ICOs are mostly for companies who develop blockchain-based projects, but sometimes they can be used for scams. One can create a false project with a false token to rip people off of their Bitcoin or Ether.
How these three are related but Different?
In general, ICO, cryptocurrency and blockchain businesses are all related to each other. It is noteworthy of mention that they all use each other’s technology to develop themselves. Cryptocurrencies use blockchain, but blockchain can be used for other innovations too, mostly due to its privacy and anonymity.
Cryptocurrencies can be used by ICOs as well. They, however, are mostly used to get funds for their project, but cryptocurrencies are also currencies accepted at a lot of places. ICOs are just a means to get funds. The funds are mostly, if not entirely, in cryptocurrencies. In this way, they all are linked but are different in a lot of ways.