The cryptocurrency market is awash with news that the popular messaging app, Telegram has raised $850 million in a presale, the first step toward an eventual token crowdsale. An ICO (Initial Coin Offering), also called token sale or token crowdsale is an innovative way for businesses to raise money.
Similar to an IPO, a company can raise money from thousands of investors – the main difference is that ICO investors get cryptocurrency tokens and not shares in the company. Unfortunately, the lack of serious regulation around ICOs makes them subject to abuse by unscrupulous folks who raise money with nothing more than a whitepaper and a landing page.
Such ICOs tend to end up being a waste of money for investors if the team behind the ICO is unable to successfully execute the ideas in their whitepaper. ICOs initially started out as a tool for startups to raise money without going to Wall Street.
Interestingly, many existing businesses are now taking the ICO route to raise money to expand their business, launch new products/services, or to pivot their business models into the blockchain ecosystem. This piece examines some developments hinting that the popular social networking Q&A website Ask.fm might be planning to launch an ICO a la Telegram style.
Is Ask.fm planning an ICO?
Ask.fm, the popular social networking site where people can ask and answer questions openly or anonymously might be one of the existing businesses towing the ICO line to raise funding and transition into the blockchain ecosystem. Founded in 2010 in Riga, Latvia, Ask.fm has grown into a worldwide social network with more than 215 million users in 49 languages across more than 70 countries.
In the last couple of months, rumors have been swirling all over cyberspace that Ask.fm might be gearing up to pivot to the blockchain ecosystem. One of the factors hinting at the possibility that Ask.fm might soon be running an ICO are some job postings that could be traced back to the social network.
For instance, a job posting by headhunter Brain Combinator says the client is “looking for an Ethereum Solidity Developer to join their team to help develop a new blockchain / cryptocurrency project globally.” Another job posting by the same recruiter says the client is looking for a blockchain developer.
The client descriptions in both instances described the client as a global Q&A network with more than 200 million registered users – the client description could be representing Quora or Stack Overflow.
However, the fact that the client is looking for developers in Ukraine and Ask.fm’s Eastern Europe origins suggests that Ask.fm is more likely to be the client.
The second factor supporting the rumours of Ask.fm’s interest in the blockchain space is the company’s introduction of new features and the hints of a Ask.fm 2.0. The firm has already parked the domain http://ask-fm.pro/ as part of efforts to launch its 2.0. In addition, domain names related to Ask.fm and ICOs such as askfmtokens.comaskfm.io and askfmcoin.com are no longer available.
Pivoting to the blockchain is a smart move
The fact that cryptocurrencies are struggling to get acceptance on Wall Street is a demotivator. Yet, there’s more to blockchain than cryptocurrencies – people tend to think Bitcoin at the first mention of blockchain.
Blockchain technology it is starting to shake off the creepy connotations it has with Bitcoin and altcoins. The disruptive nature of blockchain is extending from the financial sector, enterprise, real estate, and now social networks.
Nothing has been confirmed about Ask.fm’s plan to run an ICO; yet, a pivot to blockchain technology could help the social network stay ahead of the competition by improving its competitive edge.