Do You Know ICO’s Have Started Changing Tech Startups

In the recent past, it was a reliable revenue model to scrap a flat fee off of a user’s transaction. But now a new wave of startups is setting their sight on something different with the advent of cryptocurrencies. Brands like Kik and Telegram which are considered as mainstream brands have started embracing an alternate model.

Cryptocurrencies might be used by such companies in a more equitable way to distribute revenue. Just like bitcoin and either this digital asset might give users an actual tradable stake in a platform’s growth.

A certain amount of crypto tokens issued by the companies could be presently used on a platform or they can be preserved for future. In order to interact with that platform, users may purchase tokens if they witness value in the platform.

However, the value of crypto token goes up and down because of supply and demand since its amount is limited.

According to the announcements, it is pretty much clear that to get involved you do not have to be a new company. With proceeds from the coin offerings, payroll is covered in the early years and sales revenue is being replaced with asset appreciation effectively.

YouNow CEO Adi Sideman talked to Coindesk stating that the company’s revenue strategy has changed because in December $24 million worth of its etherium based tokens were sold.

According to Mason Borda, this trend will continue. He is CEO and co-founder of a token sale company named Token Soft Inc.

“The more ethnically pure way to look at this is the company will be rewarded because their metrics will go up because they will have been able to drive user engagement,” he stated.

  • About the Switch

All the companies might not be benefited. In fact, few of these companies may not be able to execute on the switch to a revenue model which relies on crypto.

In making the transition YouNow has a head-start. Since years this company possesses a traditional virtual currency called “bars”. YouNow believes that an equivalent of $24 million is spent by the users every year on the bars and they use it for buying virtual gifts including digital stickers and super-likes. Hence they are able to shower videos and content creators with whom they enjoy.

Money spent by the users is shared by YouNow on the purchase of digital gifts on a broadcasters channel with the creator. Till 23rd of February, the company plans to release a new App called Rize. Similar to Bars it would be a virtual currency and it would be termed as coins and it might work in tandem with the cryptocurrency props.

  • Would This Be a Slow Transition?

Users will earn the cryptocurrency props for engaging content and they will buy coins to purchase digital gifts on the platform. The number of digital gifts sent will increase with such an engagement which might garner revenue for the company. It is possible as the company keeps 30 percent of 1 million tokens issued not just from the bar sales but also from the new users interested in trading props.

In an effort to see the rising value of prop YouNow is focusing on building new products and services into the platform. Earlier the company maximized its gains through person to person payments.

  • Future Perspective

Many people are still skeptical but YouNow recently called ICO’s a new lifeline for failing or stalling startups. Many other people also echoed such statements.

“I’m very bullish on the crypto space in general,” founder and managing partner of crypto hedge Aranna Sympson said, “but to think all of these networks are going to have billions of dollars in value accrue on top of them is a little bit naive.”

Simpson believes that majority of those who issue ICO are taking advantage of an un-skeptical market which may buy any pitch.

Although Kik seems to be interested in earning and spending crypto tokens on its platform because the company recently published a new beta test report on its crypto token along with the app’s most engaged users.

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