I am newbie to cryptocurrencies and just read an article about ICO (Initial Coin Offerings). However, I didn’t quite get the functioning and role of tokens. Lets say there is a company that plans to build a marketplace that operates on blockchain, where you can buy and sell many different things. To use the marketplace the user however needs to buy company’s tokens.
To raise money to build the marketplace, the company one day decides to participate in an ICO, where it will issue its tokens for a low price. The ICO is very successful and the company manages to build the platform and attract a reasonably sized customer base.
Let’s say that in a few years the value of the company goes up, which means that the value of the token will also increase. Then come new users who are attracted to the platform and want to participate in it. This is the part which I don’t understand. Because they need to buy the tokens to participate in the market, wouldn’t the high price of tokens (compared to their original price at ICO) significantly deter new users from coming to the platform? The new users would have to pay high costs (buying the tokens) just to enter the platform. How do blockchain companies (like Status.im) solve this problem?
Thanks a lot for clarifying the problem.