I did a fair amount of googling before posting.
Let's just say, I am planning to create a yet-another-blog-engine which is noway related to blockchain. Can I use ICO (Initial Coin Offering) to fund such projects?
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It's possible to treat an ICO as nothing more than a funding mechanism, yes. Filecoin, for example, ran an ICO on the Ethereum blockchain, but will be operating on a separate chain, indicating that there is no hard relationship between the ICO chain and the eventual product. Taken further, there is no technical reason for the product to be blockchain related at all.
Note that although there are no technical restrictions here, there may be other issues. For example, investors may not trust a developer's ICO if he has no evidence of using the blockchain in a meaningful way. It might also be a sign of a scam - since the tokens will have no intrinsic value within the context of the application, the price will be driven purely by speculation, which can lead to an unstable market.
Initial Coin Offering means you are offering a COIN before the project goes live. This coin is supposed to appreciate in the future, this is why everybody is going to get in and buy your coin. If you are not offering a COIN, then it is an IPO (Initial Public Offering) where you offer something else than a coin, say a share of your newly created company. If you are offering a PRODUCT, then it is more like a Crowdfunding Campaign. If you offer nothing valuable, then it is called charity.
To collect funds you can use anything, a credit card, a deposit, cryptocurrency or whatever. Just make sure this is legal in your country.
ICOs are popular because it is very easy to take ETH or BTC and exchange it for a token, which is some sort of like a ticket, when you go to the movie. With this ticket the user has some rights to do something or to claim some assets inside the virtual "world" of your project.
Blockchain has nothing to do here, it is just an algorithm, but many companies use this popular word to make their project more appealing.