A brief overview of the blockchain technology

In October 2008, Satoshi Nakamoto published a landmark white paper titled Bitcoin: A Peer-to-Peer Electronic Cash System. Although the true identity of Satoshi has not been ;revealed, this paper triggered a gold rush to cryptocurrency and led to the birth of a new technology—blockchain. While the initial rush to cryptocurrency has suffered a severe setback due to dramatically descending prices of main cryptocurrencies such as BTC (bitcoin), XRP (Ripple), and ether (Ethereum), blockchain as a technology is alive. Numerous blockchain projects are being worked on worldwide. The technology will fundamentally change the way most businesses will be conducted and how people will live. ICOs, a primary fundraising method used in the cryptocurrency and blockchain world, have played the main role in this gold rush, driving up the BTC's price to an unprecedented level, by over USD 19,000 in December, 2017. The cryptocurrency bubble burst in late 2018 as BTC's price crashed. It is below $4,000 as of January, 2019. The dramatic drop in price of the main cryptocurrencies led to the death of ICOs.

It is not coincidental that the ICO bubble burst. A similar event occurred in the financial world over ten years ago—the 2008 financial crisis. The primary reason for the 2008 crisis was the lack of control in lending standards, resulting in the issuances of many loans to unqualified borrowers. The loans were then packaged via a financial-engineering process called securitization, and sold to unsuspecting investors worldwide. When enough borrowers started to default on their mortgages, a worldwide financial crisis broke out. The ICO fundraising model is fundamentally flawed in its lack of control on many of the proposed projects, for which funds were raised. Via an ICO, an entrepreneur can raise tens of millions of US dollars within minutes without a real product or even a company! All it has is a white paper, sometimes only a few pages long. To address the issues of ICOs and support the blockchain industry's future growth, the blockchain community has proposed and promoted the STO idea. STO has attracted a lot of attention and it is expected to play a promising role in the replacement of ICOs.