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Apologies if I ask stupid questions, but can someone explain me the relationhsip between the tokens created in ICO and ethereum (or bitcoin)? I mean, are these
by beefield 9y ago
Apologies if I ask stupid questions, but can someone explain me the relationhsip between the tokens created in ICO and ethereum (or bitcoin)?
I mean, are these new tokens completely indpendent (economical) entities with no connection to the value of other cryptocurrencies, or do they somehow derive value from ethereum?
To put this in practical terms, if I want to raise money via an ICO and promise that you can use a token in one year's time to buy USD100 worth of gadgets from me, is that doable without anyone taking any risk on the fluctuation of value of cryptocurrencies?
- wepple 9y agoThe new tokens are completely independent of other tokens. Buying at ICO, you’re acquiring tokens that you hope will have value once the system is up and running. I’m sure you could do that somehow, but I don’t believe anyone has done it.
- beefield 9y agoBut isn't there some link between ICO and traditional cryptocurrencies? I thought the transactions are somehow logged to e.g. ethereum blockchain?
- dfox 9y agoMost tokens are implemented by ethereum contracts, because it is the simplest way to implement such thing, but they don't have to be.
- beefield 9y agoHere is where I go confused. New tokens are supposed to be completely independent from ethereum economically, but at the same time they are somehow ethereum contracts. Would that not mean that someone needs at some point own ethereum and take the market risk?
- wmf 9y agoYes, to transact tokens that run on top of Ethereum you have to pay transaction fees in ETH, which AFAIK means you need to buy at least a small amount of ETH. There are some recent proposals that would allow fees to be paid in other tokens, so I guess if those go through then you could use tokens without ever touching ETH.