Initial coin offerings have gotten a bit of a bad rap over the past few months. That is not entirely surprising, as this method of raising money raises a lot of questions and provides very few answers. Over in Japan, it seems the people are more open-minded when it comes to ICOs. In fact, one local government is planning to use this business model as a way to preserve a village and provide an economic boost in the process.
Nishiawakura Embraces the ICO Model
One of the main issues people have with initial coin offerings is how the tokens are supposed to have any value. In the world of cryptocurrencies, most tokens are issued for projects which don’t exist in any way other than on paper. If there is no tangible or useful technology or product to back the value of these tokens, they are nothing more than empty promises. That doesn’t make the business model itself less viable, mind you, but it also shows something will need to change sooner rather than later.
In that respect, the Japanese village of Nishiawakura hopes to give ICOs a slightly better reputation. Located in Okayama Prefecture, this village has been looking for ways to revitalize itself, and recently started looking into holding an initial coin offering. It is an interesting approach, considering it could also ask for support from the national government or even seek private investment. Instead, this transparent and public approach may prove to be more successful in the long run, assuming there is any interest in this venture to begin with.
For the time being, the local government is “researching” the possibility of holding an ICO. It is very different from what most people would associate with an initial coin offering, to say the very least. Investing in important upgrades is one of this village’s top priorities, but obtaining the required backing to do so is difficult. A municipal ICO in collaboration with private enterprise will yield some interesting results; that much is almost guaranteed. In a way, the future of this village may very well be determined by how this ICO – if it occurs – is received by the public.
The potential impact of private enterprise should not be overlooked either. There are plenty of partners willing to help out the village in this regard, even though it remains to be seen what their actual roles will be in the end. A blockchain provider has already been found in the form of Chaintope Co Ltd. Hosting an ICO requires a blockchain infrastructure of some kind, and it does not appear Nishiawakura’s government is interested in using Ethereum or WAVES. That’s an interesting decision, although it can easily be justified.
What is remarkable is how every blockchain created by this particular firm has taken a page out of Bitcoin’s playbook. The chains use a very similar model and can serve many different purposes. One potential weakness is that it completely relies on Amazon’s AWS for data storage, which is a rather centralized approach. At the same time, these new chains can connect to the Bitcoin blockchain for live timestamping. It’s an interesting concept, although a private and centralized ledger is always a topic of substantial debate among blockchain enthusiasts.
Although it remains to be seen if this particular ICO will ever happen, the development is pretty interesting in its own way. More specifically, Japan seems pretty keen on the concept of ICOs in general, even though it’s questionable how local governments feel about developments such as these. Without any clear regulatory framework in place for initial coin offerings, there are some intriguing public and private ventures waiting to be explored.