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This is a general blockchain question - not specifically bitcoin. Hoping this is the right place:

When a company raises money through an ICO such as Telegram, are they creating their coins and blockchains from scratch? Are they creating their own process of mining which needs to be maintained? OR, are they utilising Ethereum's blockchain and their solidity code as a platform for example?

  • Are you referring to the fundraising stage of ICOs, or the technology they claim to build? – Pieter Wuille Feb 2 '18 at 4:46
  • Im talking about the fund raising stage – DVCITIS Feb 2 '18 at 4:55
  • You can't raise money using a system that doesn't exist yet. So by definition no, that stage happens using an existing currency like BTC or ETH. Often it's also the only stage... (I'm making this a comment and not an answer as I would personally like to see a more comprehensive overview than this). – Pieter Wuille Feb 2 '18 at 5:33
  • Im thinking about the use of a token in an ICO; its purpose is to raise capital for whatever the venture might be so the coins must therefore have some use for the 'investor' in the future that can be documented in an innovative way - ie as a token for future services from that company (otherwise its no different from crowdfunding)... can you fork bitcoin blockchain and use your fork to implement smart contracts or are the concept of 'smart contracts' unique to ethereum? Im trying to get a handle on what framework allows innovation that we havent seen before.. – DVCITIS Feb 2 '18 at 15:04
  • Your last comment is about the token they're selling. The former comment was about how those are being paid for, which necessarily happens on a different system/currency. They're unrelated. Which are you asking about? – Pieter Wuille Feb 2 '18 at 22:24
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In your question statement you mentioned TON ICO, (telegram). Telegram never announced any ICO till the date. Though some scams were there cashing out the name of telegram.

Coming back to the Question, ICO may or may not have their own blockchain. Most of the ICOs issue ERC20 tokens that means they are powered by Ethereum blockchain. That means they are not actully creating their own blockchain from scratch. These tokens are backed by ETH blockchain and resources.

Few ICOs (for example electroneum) used their own platform and blockchain for raising funds.

Just like ethereum there are few other players like NEO, Tezos, Stellar, Waves etc having their own properties, advantages and disadvantages. There are many upcoming ICOs powered by Tezos as well.

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The majority of ICOs are raising funds by using ERC20 Tokens/Crowdsale contracts deployed on the Ethereum platform. This implies that they are NOT creating their own blockchains or coins from scratch which in turn implies that they are riding on the back of all Ethereum blockchain resources for mining, block exploration etc.

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You may heard the phrase ERC20 tokens, these are ICOs that have been using the Ethereum blockchain platform. Ethereum is definitely one of the most prominent options for those looking to create tokens and hold ICOs but there are also other platforms like: Wave, Bitshares, Tezos, NEO, Qtum.

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