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Why do ICOs Matter to Ethereum and Bitcoin?

Why do ICOs Matter to Ethereum and Bitcoin?

ICOs can help the market and developers test the waters for new concepts using blockchain technology.

When a new idea succeeds or fails after using an ICO, it could be said that the company had made use of every advantage at its disposal and that it had the best chance at success in that environment as it could have had anywhere else. It could have done so more cheaply, and with less interference, than in the “real world,” generally speaking.

This proving ground can create new wealth and more players in the cryptocurrency markets. More leaders, thinkers, and doers in the cryptocurrency space is definitely the desired outcome for the Bitcoin and Ethereum community. More concepts and code can be tested and fleshed out without necessarily affecting the price of either of the two largest cryptocurrencies. Frequently the newcomers are seen, by some anyway, to be threats set to depose the old regents if they gain enough traction-- boasting faster speeds, more scalability, and so forth. In an open-source community like the one that surrounds cryptocurrencies, however, such new innovations are not really seen as a threat, but instead, are viewed as windfalls. Naturally the people with the largest stake in either of these two older coins would welcome new technologies that legitimize the cryptocurrency even more to the mainstream markets, and, if it turned out that the old coins were going to replaced by new standards, these coin-holders would undoubtedly participate by exchanging their Ether or Bitcoin at a time and degree that seemed suitable to them.

No one, in particular, owns Bitcoin, or Ethereum for that matter, and, given that the community holds many billions of dollars-worth of the cryptocurrency, it is unlikely that anything overnight is going to change that. They have both have tremendous staying power and inertia in the cryptocurrency world.

If anything, new coins will only give them more value over time, as different currencies are used for their various strengths and purposes. Many ICOs use an Ethereum-based token protocol called ERC-20. The more companies use this standard, the more each Ether is worth, at least as a medium of exchange. There is the small problem that many ICOs turned out to be scams that have given the cryptocurrency community a few black eyes, but this is natural with any emerging market, and some cryptocurrencies have economies stronger than many developing countries do.

Keywords: Bitcoin, Ethereum, Initial Coin Offering (ICO), ERC 20, open-source developments,