In January 2018, privacy-first messaging service Telegram surprised the cryptocurrency world by announcing that it would hold a token sale—also known as an Initial Coin Offering (ICO)—in order to launch a new platform. ICOs are the issue and allocation of Bitcoin-like cryptographic coins (or “tokens”) to raise money for a project; in recent months they have become an increasingly popular (if controversial) financing method for startups. ICOs are mostly fueled by speculation, as tokens are traded on online exchanges in the same way Bitcoin is traded. But Telegram’s move—and the fact that its ICO secured the backing of VC bigshots Kleiner Perkins Caufield & Byers, Benchmark and Sequoia Capital—shows that launching a new cryptocurrency could help small projects and incumbents alike to bypass institutional investors.
As Bitcoin’s price rollercoaster keeps stealing headlines, it is not only privacy-aware startups that are looking at cryptocurrency with keen interest. In August 2017, fast-food giant Burger King announced the WhopperCoin, a “blockchain fidelity programme” launched in Russia that rewards customers with cryptographic tokens that can be parlayed into free burgers.