Bitcoin, which made people learn about the world of virtual currencies, Blockchain, ICOs et al, might be trading in red, but despite that each day we keep learning about new cryptocurrencies and blockchain-based solutions. This time it is BananaCoin that is catching eyeballs. And the interesting thing about BananaCoin is that it is not a cryptocurrency, but a “token” or initial coin offering (ICO) to be used in the production of organic bananas.
According to BananaCoin’s website, it is model of crowdfunding that allows us to issue digital tokens in exchange for investments. BananaCoin, which is being called an “organic token”, can be bought using Ethereum and Bitcoin, and the price of one token is tied to the price of 1 kilograms of bananas in the international market. This garnered reactions from people on micro-blogging site Twitter when a picture of its advertisement from a cryptocurrency conference went viral.
We live in a post-parody society where it’s impossible to invent anything more ridiculous than reality pic.twitter.com/HPGekRKENz
— Zack Bloom (@zackbloom) January 20, 2018
There’s always money in the banana stand ???? pic.twitter.com/STjUA9BZ8N
— Chris Maddern (@chrismaddern) January 21, 2018
This is going to be huge.
Also, not my photo. I can’t find the article I downloaded it from. If it’s yours, hmu so I can accredit it. pic.twitter.com/RB9L8SKcZ1
— D. Bizmark Nelson (@AppositeRiposte) January 21, 2018
Method in madness?
BananaCoin tokens constitute utility tokens in the form of a contract for the purchase of goods to be produced in the future. The cost of the first million BCO is 0.25 US dollars per one token. The cost of one token on the main event is 0.5 US dollars. The BananaCoin team is planning to increase the production area to 1,000 hectares in Vientiane province, Laos, and for them, this is a method for crowdsourcing fund using ICO. Each token gives its owner the right to receive profit according to the declared conditions. Unlike, other cryptocurrencies, its founders are not anonymous, and are the owners of the real banana plantation.
What is ICO?
An initial coin offering (ICO) is a means of crowdfunding centred around cryptocurrency. In an ICO, some quantity of the crowdfunded cryptocurrency is preallocated to investors in the form of “tokens,” in exchange for legal tender or other cryptocurrencies such as Bitcoin or Ethereum. These tokens become functional units of currency if or when the ICO’s funding goal is met and the project launches. However, the US Securities and Exchange Commission (SEC) has warned investors to beware of scammers using ICOs to execute “pump and dump” schemes.