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Regarding ICOs, I have noticed a fair number of submissions to HN titled something along the lines of "[Insert market] ICO : sale opens [date]". These submissio

Regarding ICOs, I have noticed a fair number of submissions to HN titled something along the lines of "[Insert market] ICO : sale opens [date]". These submissions are from new accounts with newly created Github and other social media handles with an anonymous user behind the submissions. Most of the submissions get flagged and the ICO never happens. Do these people think they can raise hundreds of thousands or millions of dollars anonymously with newly created accounts? It just screams scam. All of the successful ICOs seem to have a team full of PHDs, investors, and seasoned entrepreneurs and they also have commitment from a few well known investors and entrepreneurs as social proof. Some even have "pre ICO sales" to reward their inner circle. For people in the know, I have a few questions: * Who invests in these ICOs apart from the "pre ICO investors" who are generally close friends of the founders? * How do ICOs reach these people (I'm guessing a subset are clueless retail investors and the average Joe who gets excited by the words blockchain, cryptocurrency and ICO)? * What is the legal status of ICOs? * Are there any case studies regarding how successful ICOs take place? (I have no plans of starting my own ICO, just want to understand how these ICOs work.)

noddy1 9y ago
> Who invests: - Some of the hundreds of thousands of people who have made big $ in crypto - especially ether > How do ICOs reach these people: - There are numerous forums/chatrooms/reddits/twitter posters etc etc. One of the common tricks is for ICOs to reward 2-3% of tokens in "bounty programs" which basically rewards participants for facebook/forum/blog/youtube posts/spam. Very large ICOs like bancor have done this > Legal status of ICO's - Unclear, but they are global and switzerland - where many of them are based out of seem to have liberal laws. For the SEC they seem to have indicated that you are likely to get in trouble if ICO's are more equity based, whereas "token" based network payment stuff is less clear. The high early liquidity of ICO's basically mean that if an ICO has capped investment and has any sort of credibility, the ICO will reach its cap rapidly and when it opens on the exchanges it'll be up 3-10x and you can dump it and make a fortune, regardless of whether it is actually vaporware or a ponzi. This does not really happen in the past 3 months as the high demand ICO's generally take as much money as possible and don't cap it. I think its sad that this business is going the way of the venture capital biz where well connected people get early/cheap dibs and average joes only get in once all the potential gains have been sucked out. Compare this to the ethereum ICO where everyone really got a fair short. I also think that if these have ponzi elements, being a preferred/connected/private investor in a ponzi makes you complicit in the ponzi scheme, whereas being an average joe just means you're playing the game.
- ploggingdev 9y ago
  > How do ICOs reach these people: - There are numerous forums/chatrooms/reddits/twitter posters etc etc. Can you post a few links to the forums/chatrooms/subreddits/twitter accounts?
  - dekz 9y ago
    Each chain/dapp/offering usually has its own slack or discord. coinfund.io/steemit.com
  - slewis 9y ago
    https://www.smithandcrown.com/icos/ https://www.smithandcrown.com/icos/ Mostly memes and mindless speculation, but you can get an idea of sentiment here: https://www.reddit.com/r/ethtrader/ https://www.reddit.com/r/ethtrader/ That's the tip of the iceberg.
pmorici 9y ago
> Who invests in these ICOs? Mostly idiots. or people who think they can pump the price and flip it to a greater fool before the "founders" exit scam everyone. > How do ICOs reach these people? Reddit forums, Ads on crypto-currency related sites (ie: coindesk.com, etc...) and on Facebook etc... > What is the legal status of ICOs? SEC says[0] if you operate your ICO like a securities offering then your tokens are securities and you are subject to applicable federal laws. [0] https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_coinofferings https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_co... > Are there any case studies regarding how successful ICOs take place? No idea, most ICOs I'm aware of are hugely problematic and on the grey side of ethics at best. If the founders are pre-mining/keeping a large portion of the coins for themselves I would stay way far away. Bitcoin by contrast wasn't an ICO the only way someone got Bitcoin was by mining it.

noddy1 9y ago

> Who invests: - Some of the hundreds of thousands of people who have made big $ in crypto - especially ether > How do ICOs reach these people: - There are numerous forums/chatrooms/reddits/twitter posters etc etc. One of the common tricks is for ICOs to reward 2-3% of tokens in "bounty programs" which basically rewards participants for facebook/forum/blog/youtube posts/spam. Very large ICOs like bancor have done this > Legal status of ICO's - Unclear, but they are global and switzerland - where many of them are based out of seem to have liberal laws. For the SEC they seem to have indicated that you are likely to get in trouble if ICO's are more equity based, whereas "token" based network payment stuff is less clear. The high early liquidity of ICO's basically mean that if an ICO has capped investment and has any sort of credibility, the ICO will reach its cap rapidly and when it opens on the exchanges it'll be up 3-10x and you can dump it and make a fortune, regardless of whether it is actually vaporware or a ponzi. This does not really happen in the past 3 months as the high demand ICO's generally take as much money as possible and don't cap it. I think its sad that this business is going the way of the venture capital biz where well connected people get early/cheap dibs and average joes only get in once all the potential gains have been sucked out. Compare this to the ethereum ICO where everyone really got a fair short. I also think that if these have ponzi elements, being a preferred/connected/private investor in a ponzi makes you complicit in the ponzi scheme, whereas being an average joe just means you're playing the game.

ploggingdev 9y ago
> How do ICOs reach these people: - There are numerous forums/chatrooms/reddits/twitter posters etc etc. Can you post a few links to the forums/chatrooms/subreddits/twitter accounts?
- dekz 9y ago
  Each chain/dapp/offering usually has its own slack or discord. coinfund.io/steemit.com
- slewis 9y ago
  https://www.smithandcrown.com/icos/ https://www.smithandcrown.com/icos/ Mostly memes and mindless speculation, but you can get an idea of sentiment here: https://www.reddit.com/r/ethtrader/ https://www.reddit.com/r/ethtrader/ That's the tip of the iceberg.

pmorici 9y ago

> Who invests in these ICOs? Mostly idiots. or people who think they can pump the price and flip it to a greater fool before the "founders" exit scam everyone. > How do ICOs reach these people? Reddit forums, Ads on crypto-currency related sites (ie: coindesk.com, etc...) and on Facebook etc... > What is the legal status of ICOs? SEC says[0] if you operate your ICO like a securities offering then your tokens are securities and you are subject to applicable federal laws. [0] https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_coinofferings https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_co... > Are there any case studies regarding how successful ICOs take place? No idea, most ICOs I'm aware of are hugely problematic and on the grey side of ethics at best. If the founders are pre-mining/keeping a large portion of the coins for themselves I would stay way far away. Bitcoin by contrast wasn't an ICO the only way someone got Bitcoin was by mining it.