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What's important to note about ICOs is not necessarily whether the idea is actually practical and that it will work. What matters right now is whether the idea

What's important to note about ICOs is not necessarily whether the idea is actually practical and that it will work. What matters right now is whether the idea can stir our intellect and get the crowds excited. This is because behind the idea there's a new token which value is completely driven by the excitement of the crowds (it's pure speculation). If I invest N amount of money in a token which gets people excited, I will surely get back N + <crowd excitement>. So it's sort of like a snake that bites its own tail, and we see these crazy prices specifically for this reason. People are not investing hoping for the project to be developed - they're investing because they know others will as well, which will drive the prices up. ICOs are a new breed in economy where people can speculate, anonymously, using tokens that are distributed to the crowds in various ways (PoW, initial distribution, etc.). What does this mean for our future economy? I'm not sure, but it surely looks exciting (even though most projects behind ICOs are complete crap). If our future economies will be driven by these tokens, we might think back at this period of time, looking at perhaps the people who will be the %1 of the future.

dplgk 9y ago
ICOs are a new breed of gambling.
- tankenmate 9y ago
  I'll probably get down voted for this but nonetheless it needs to be said, partly tongue in cheek; ha ha, only serious. Gambling is not a sin / Provided that you always win. -- Roald Dahl
  - tankenmate 9y ago
    For those who abhor levity and reading between the lines the lesson is this; Risk is a spectrum; p < 1 is gambling for small n. So where does sure thing become risky become gambling become plain stupid? And one thing society as a whole will agree on is that p = 1 is not morally wrong. Therefore, "Gambling is not a sin / Provided that you always win" is true regardless of your sense of humour. The grey areas are less well defined, just like people's sense of humour.
- sktrdie 9y ago
  I'd argue that most of our current economy is gambling (stock markets).
  - soneca 9y ago
    I'd like to read your arguments on that.
    - notfromhere 9y ago
      Information symmetry between company and investor. buybacks also obscure real stock value (and something around 75% of corporate profits go to maintaining or raising stock price)
  - adventured 9y ago
    > I'd argue that most of our current economy is gambling (stock markets). I think you're confusing economy with speculative investment. Most of the US economy consists of manufacturing and service industry output, not the stray under or over valuation of the stock market (which is derived from non-gambling output in the first place). Since when is $6.3 trillion in gross manufacturing output considered gambling? If there is a major economy anywhere on earth that has been a more sure thing (aka the exact opposite of gambling) on average over the last ~140 years than the US, please point it out. Whether you value Apple at $500 billion or $800 billion right now, has no substantial impact on their sales or net contribution to the US economy / GDP. The same is true for Facebook, Microsoft, or 3M, Delta Airlines, Johnson & Johnson, GE, Berkshire Hathaway etc. Whether the S&P 500 has a PE ratio of 25 (2017) or 18 (2013), does not dramatically alter the US economy. There's also nothing "current" about it. The stock market has been important for the US economy for more than a century. It's increasingly less important, not more. The private non-bank market for business capital has expanded dramatically while the public market is contracting - and likely to continue contracting - as fewer companies go public.
  - pc86 9y ago
    You'd be wrong.
- decentralised 9y ago
  Throwing money at a business proposition is neither new nor gambling.
  - Cthulhu_ 9y ago
    It is when the investors throw money at it in the hope they'll get a return on investment. You don't need $250 million to build a distributed Dropbox clone.
    - JumpCrisscross 9y ago
      > It is when the investors throw money at it in the hope they'll get a return on investment Traditionally, the gambling-investment line is drawn at the zero-sum boundary. If you're buying these tokens because you think the encrypted storage business is worth that much (i.e. based on profits), it could be investing. If you're buying to avoid missing out on something other people will want to buy because it's cool (i.e. there is no discussion or thought given to profit) it's probably pyramidesque gambling.
    - decentralised 9y ago
      How is that different from any other investment?
  - matthewbauer 9y ago
    But is this really an investment in a company? It looks like they're just buying tokens in the hope that when people start using FileCoin there will be more demand for it.
    - decentralised 9y ago
      It works as an investment precisely because the tokens will be tradable, and with use and demand they should increase in value significantly.
    - decentralised 9y ago
      It's an investment because the coins are usable as a medium of exchange and as a store of value. If you can have Amazon S3 type service hosted in IPFS and actually get paid for it instead of paying for it... what is the problem with this business proposition?
- koolba 9y ago
  One distinction is that legalized gambling is highly regulated. ICOs, not so much.
  - bko 9y ago
    Are the gambling regulations actually there to protect consumers? The largest form of gambling in the us is probably lottery, which is exclusively controlled by state and local governments. The regulations don't prevent extremely poor odds (much worse than private gambling) and marketing targeted to low income Americans. At least ICOs require some sophistication
    - koolba 9y ago
      Regulations aren't there to protect against stupidity. They're there to protect against fraud. It's to stop someone from setting up a fly by night lotto, collecting ticket money, then leaving town.
      - philipov 9y ago
        If you are tasked with making a better society and you use the opportunity to promote and entrench greater stupidity, is that fraud?
        ada1981 9y ago
        I'm always outraged when I see NY Lotto ads on the subway. This is just a way to profit off people who don't understand math and have some sort of addiction. It's a poor tax. I once saw an ad that said something like "if you are putting in your resume to be a door man, it's time to play the lottery"!!!! Not, time to go back to school, time to vote for better income redistribution, not good for you for looking for work -- no, the city decided to trivialize unemployment and poverty AND make the claim playing the lottery is better than hunting for a job. Regulation seems to be about limiting who gets to extract the profit from the poor, not protecting the poor / the people.
- KillerWhale 9y ago
  Holding $,€,£ etc. is gambling even if you don't realize it.
  - webXL 9y ago
    What’s a truly risk-free alternative though?
    - bovine3dom 9y ago
      Entropy. It's guaranteed to go up.
      - axplusb 9y ago
        In a closed system, hence not the Earth.
    - KillerWhale 9y ago
      Life itself is a risk which includes everything in it.
  - simias 9y ago
    That's a rather ridiculous reductio ad absurdum. The euro/USD exchange rate has varied between roughly 1 and 1.6 over the past 10 years. That's including the 2008 crisis. Meanwhile over the last year alone the BTC/USD exchange rate varied between about 500 to 3400. My 10 euro bill is extremely unlikely to suddenly massively increase or lose in value. That's the difference.
    - deleted 9y ago
      [deleted]
    - elmar 9y ago
      > The euro/USD exchange rate has varied between roughly 1 and 1.6 over the past 10 years. This low range variation is only possible because of government monetary intervention that doesn't exist on CryptoCurrency.
simias 9y ago
>If our future economies will be driven by these tokens, we might think back at this period of time, looking at perhaps the people who will be the %1 of the future. I get your point but please don't feed this "fear of missing out" that I'm sure many are feeling (myself included, to a certain extent). Some people are going to invest money they can't afford to lose. Maybe they'll be the next 1%ers. Or maybe they're just like the folks who bought pets.com shares. There's simply no way to know and at this point it's more akin to gambling than investment. Play the roulette, bet everything on red. You wouldn't want to miss out, would you? If red does come out and you don't bet you'll feel like a loser.
- coryfklein 9y ago
  You don't have to bet the barn for heaven's sake. $800 in bitcoin 5 years ago makes you a millionaire today. Most software engineers are going to be just fine making one or two gambles on that order, and if it means they get more involved in new tech and have fun all the while I think it's a great idea.
Mahn 9y ago
> but it surely looks exciting Or terrifying, take your pick.
deleted 9y ago
[deleted]
Taek 9y ago
I can't tell if you intentionally passed over the point, but this kind of circular investing is not sustainable. If something has value only because people buy it, at some point there are going to be more people taking profit than putting new money in. That's when the price starts to fall. If Bitcoin's price history is anything to go by, when the prices start to fall, they will fall fast and hard. At least in Bitcoin's case, there's a core value proposition that's actually worthwhile, so it's able to recover. With most of these ICOs, the core value proposition isn't actually valuable. When the price finally starts to collapse, the floor could be very low, and there may not be a recovery. See the old tokens Quarkcoin, Primecoin, and most of the rest of the top 25 altcoins from 2013
- saimiam 9y ago
  I know very little about ICOs other than what I have read on HN and HN comments so take what I'm saying with a pinch of salt. My understanding is that an ICO is like an IPO minus a century+ of regulation and oversight by the authorities and instead of a share of future earnings, you get a share of a closed economy. The oversight and rules governing stock offerings is fantastic no doubt but when you describe a Coin as a circular investment scam, I think you are glossing over the possibility that the economy you are buying into could become valuable. An example of this would be Second Life which at one point had a thriving virtual economy in digital goods. Extrapolating further, ICOs, due to their horizontal, borderless nature, are going to be instrumental in further tying together a global economy. Just like they used to say no two countries on the Dell supply chain would fight wars with each other, I can't imagine a world dominated by ICOs for different slivers of the online economy actually fighting an IRL war. Probably utopian but I think worrying about ICOs being a ponzi/greater fool get rich scheme overshadows its potentials.
  - Taek 9y ago
    In 2001 if you said that the Internet was going to be worth $1 trillion dollars, you were correct. But 99% of investments on internet companies in 2001 were bad investments. That's where we are today with ICOs. Cryptocurrency is going to be absolutely massive, and it has some very intelligent people doing amazing things. But the vast majority of ICOs are going to flop. Look at the rankings in 2013: http://web.archive.org/web/20131218060943/http://coinmarketcap.com/ http://web.archive.org/web/20131218060943/http://coinmarketc...
nicpottier 9y ago
While by and large I agree about most ICOs, I think the value proposition is a lot clearer for something like Filecoin. Does that necessarily mean it is worth what it is valued at? No, but comparing the IPFS folks with total snake oil is a bit unfair.
- krrrh 9y ago
  Sure, but it's kind of like saying that FTP looked like it would be a useful protocol in 1985, and an early draft of RFC 959 should have been adequate to raise gobs of money. In the end FTP added a lot of value to the internet, but it doesn't mean that the folks who wrote the reference implementations would have known what to do with the equivalent of $1B.
  - nicpottier 9y ago
    Sure, but there's a weird / interesting aspect to these ICOs here as well, in that the valuation of the coin is also what will drive adoption of the providers. Since miners will be paid in coin to validate providers and providers will also be paid in coins, then there needs to be some value associated with it. The ICO in this case kind of bootstraps the value of the coin in a way that is needed in order to bring on miners and providers. So in a way the value being raised is a bit like capital costs that the network will "spend" to bootstrap and verify the network. Don't get me wrong, this is a lot of money to raise, but saying this is totally nuts without taking into account that the model is very different (and interesting!) is not giving credit where its due. Will it work? Who knows and certainly most startups fail, but it isn't a foregone conclusion.
- Taek 9y ago
  Yes, but is the value proposition really $2.5 billion _pre-product_ for a team of maybe 20 (not sure exactly how many people are on Protocol Labs payroll)? And, did people actually do their diligence? Did any of the investors confirm with qualified academics and blockchain specialists that their Proof-of-Spacetime paper is secure and functional? Or did the market blindly throw $186 million in one hour into a hot deal because it's the hottest deal? Juan has been saying for years that one of their primary goals for Filecoin was a token sale to fund Protocol Labs.
al2o3cr 9y ago
ICOs are a new breed in economy Pumping up worthless crud with tons of PR to get suckers, er "investors" to "get in now" is an old old old scam. Adding "with cryptocurrency" onto the end of it doesn't make it new.
- igorgue 9y ago
  You get liquidity the next day instead of in 5 or 10 than with regular startups, I don't see a problem with that, investors are here to make money right? Is not like it doesn't happen with the regular VC cash money right? E.g. Color? Or with regular stock market. e.g. Enron. Clueless investors are always gonna be there.
  - loceng 9y ago
    How can you make the claim that that $186M is liquid? Last time someone dumped a large amount - $1-2M worth of Etheruem's Ether? - it tanked.
    - ojr 9y ago
      it was a flash crash as in it ended in a flash/quickly and the price rebounded, central banks becoming insolvent and not being liquid and needing bailouts are the reason there is high speculation in crypto tokens in the first place, the trust is shifted from the bankers to the developers
      - loceng 9y ago
        That's a neat distraction from how crypto-assets will ultimately shift a lot (an unreasonable amount) of wealth to early adopters simply because they were early adopters, if it gains a legitimate status as a currency throughout nations.
    - nicpottier 9y ago
      1) The $186M raised was a mix of Ethereum, Bitcoin and cash. We don't really know how much was of each. 2) They really don't need to sell all at once and who knows, may even have engineers willing to be paid in cryptocurrencies.
Cakez0r 9y ago
> People are not investing hoping for the project to be developed - they're investing because they know others will as well, which will drive the prices up. I found out recently that this is called the Greater Fool Theory - https://en.wikipedia.org/wiki/Greater_fool_theory https://en.wikipedia.org/wiki/Greater_fool_theory
- beepboopbeep 9y ago
  Bingo.
- mtgx 9y ago
  Reminds me of the time Facebook's valuation was growing by +$5 billion every 2 weeks, and Techcrunch was writing an article about it every time, further passing the hot patato along to late investors, while making the initial investors richer and richer.
- Confiks 9y ago
  Or, perhaps with a better name, a Keynesian beauty contest: https://en.wikipedia.org/wiki/Keynesian_beauty_contest#Overview https://en.wikipedia.org/wiki/Keynesian_beauty_contest#Overv...
beepboopbeep 9y ago
>I'm not sure, but it surely looks exciting (even though most projects behind ICOs are complete crap). Bubbles and fraud are not really exciting per se...
shykes 9y ago
Maybe I'm the exception, but I invested in filecoin because I'm excited about IPFS and believe coin-incentivized storage would be a very powerful feature and something I would love to spend my week-ends hacking on. I'm also an early investor in the company behind IPFS for the same reason. I haven't invested in any other crypto-currencies, and don't have any plans to do so. Just one datapoint.
nerfhammer 9y ago
> If our future economies will be driven by these tokens, It won't. This is zero sum gambling, not investment. Economic growth does not come from this.
- evv 9y ago
  I think its pretty short-sighted to say that ICO craze will not result in economic growth. As one early example, take a look at the Ethereum DAO, which allows arbitrary investors to participate in opportunities that may not otherwise exist.
  - gus_massa 9y ago
    Until it was hacked and no one dare to build the 2.0 version. Moreover. In The DAO, the "tokens" gave you voting rights so the "curators" couldn't pick up all the money and go to the small island in the Caribe on vacation^H^H^H^H^H^H^H^H^H^H^H to write a white paper. Also, in The DAO you can get (most/hopefully) of your Ethereum back, with a (incredible useful) one month delay. I.E. someone realize that you can pick all the money without giving any concrete right to the "investors".

dplgk 9y ago

ICOs are a new breed of gambling.

tankenmate 9y ago
I'll probably get down voted for this but nonetheless it needs to be said, partly tongue in cheek; ha ha, only serious. Gambling is not a sin / Provided that you always win. -- Roald Dahl
- tankenmate 9y ago
  For those who abhor levity and reading between the lines the lesson is this; Risk is a spectrum; p < 1 is gambling for small n. So where does sure thing become risky become gambling become plain stupid? And one thing society as a whole will agree on is that p = 1 is not morally wrong. Therefore, "Gambling is not a sin / Provided that you always win" is true regardless of your sense of humour. The grey areas are less well defined, just like people's sense of humour.
sktrdie 9y ago
I'd argue that most of our current economy is gambling (stock markets).
- soneca 9y ago
  I'd like to read your arguments on that.
  - notfromhere 9y ago
    Information symmetry between company and investor. buybacks also obscure real stock value (and something around 75% of corporate profits go to maintaining or raising stock price)
- adventured 9y ago
  > I'd argue that most of our current economy is gambling (stock markets). I think you're confusing economy with speculative investment. Most of the US economy consists of manufacturing and service industry output, not the stray under or over valuation of the stock market (which is derived from non-gambling output in the first place). Since when is $6.3 trillion in gross manufacturing output considered gambling? If there is a major economy anywhere on earth that has been a more sure thing (aka the exact opposite of gambling) on average over the last ~140 years than the US, please point it out. Whether you value Apple at $500 billion or $800 billion right now, has no substantial impact on their sales or net contribution to the US economy / GDP. The same is true for Facebook, Microsoft, or 3M, Delta Airlines, Johnson & Johnson, GE, Berkshire Hathaway etc. Whether the S&P 500 has a PE ratio of 25 (2017) or 18 (2013), does not dramatically alter the US economy. There's also nothing "current" about it. The stock market has been important for the US economy for more than a century. It's increasingly less important, not more. The private non-bank market for business capital has expanded dramatically while the public market is contracting - and likely to continue contracting - as fewer companies go public.
- pc86 9y ago
  You'd be wrong.
decentralised 9y ago
Throwing money at a business proposition is neither new nor gambling.
- Cthulhu_ 9y ago
  It is when the investors throw money at it in the hope they'll get a return on investment. You don't need $250 million to build a distributed Dropbox clone.
  - JumpCrisscross 9y ago
    > It is when the investors throw money at it in the hope they'll get a return on investment Traditionally, the gambling-investment line is drawn at the zero-sum boundary. If you're buying these tokens because you think the encrypted storage business is worth that much (i.e. based on profits), it could be investing. If you're buying to avoid missing out on something other people will want to buy because it's cool (i.e. there is no discussion or thought given to profit) it's probably pyramidesque gambling.
  - decentralised 9y ago
    How is that different from any other investment?
- matthewbauer 9y ago
  But is this really an investment in a company? It looks like they're just buying tokens in the hope that when people start using FileCoin there will be more demand for it.
  - decentralised 9y ago
    It works as an investment precisely because the tokens will be tradable, and with use and demand they should increase in value significantly.
  - decentralised 9y ago
    It's an investment because the coins are usable as a medium of exchange and as a store of value. If you can have Amazon S3 type service hosted in IPFS and actually get paid for it instead of paying for it... what is the problem with this business proposition?
koolba 9y ago
One distinction is that legalized gambling is highly regulated. ICOs, not so much.
- bko 9y ago
  Are the gambling regulations actually there to protect consumers? The largest form of gambling in the us is probably lottery, which is exclusively controlled by state and local governments. The regulations don't prevent extremely poor odds (much worse than private gambling) and marketing targeted to low income Americans. At least ICOs require some sophistication
  - koolba 9y ago
    Regulations aren't there to protect against stupidity. They're there to protect against fraud. It's to stop someone from setting up a fly by night lotto, collecting ticket money, then leaving town.
    - philipov 9y ago
      If you are tasked with making a better society and you use the opportunity to promote and entrench greater stupidity, is that fraud?
      - ada1981 9y ago
        I'm always outraged when I see NY Lotto ads on the subway. This is just a way to profit off people who don't understand math and have some sort of addiction. It's a poor tax. I once saw an ad that said something like "if you are putting in your resume to be a door man, it's time to play the lottery"!!!! Not, time to go back to school, time to vote for better income redistribution, not good for you for looking for work -- no, the city decided to trivialize unemployment and poverty AND make the claim playing the lottery is better than hunting for a job. Regulation seems to be about limiting who gets to extract the profit from the poor, not protecting the poor / the people.
KillerWhale 9y ago
Holding $,€,£ etc. is gambling even if you don't realize it.
- webXL 9y ago
  What’s a truly risk-free alternative though?
  - bovine3dom 9y ago
    Entropy. It's guaranteed to go up.
    - axplusb 9y ago
      In a closed system, hence not the Earth.
  - KillerWhale 9y ago
    Life itself is a risk which includes everything in it.
- simias 9y ago
  That's a rather ridiculous reductio ad absurdum. The euro/USD exchange rate has varied between roughly 1 and 1.6 over the past 10 years. That's including the 2008 crisis. Meanwhile over the last year alone the BTC/USD exchange rate varied between about 500 to 3400. My 10 euro bill is extremely unlikely to suddenly massively increase or lose in value. That's the difference.
  - deleted 9y ago
    [deleted]
  - elmar 9y ago
    > The euro/USD exchange rate has varied between roughly 1 and 1.6 over the past 10 years. This low range variation is only possible because of government monetary intervention that doesn't exist on CryptoCurrency.

simias 9y ago

>If our future economies will be driven by these tokens, we might think back at this period of time, looking at perhaps the people who will be the %1 of the future. I get your point but please don't feed this "fear of missing out" that I'm sure many are feeling (myself included, to a certain extent). Some people are going to invest money they can't afford to lose. Maybe they'll be the next 1%ers. Or maybe they're just like the folks who bought pets.com shares. There's simply no way to know and at this point it's more akin to gambling than investment. Play the roulette, bet everything on red. You wouldn't want to miss out, would you? If red does come out and you don't bet you'll feel like a loser.

coryfklein 9y ago
You don't have to bet the barn for heaven's sake. $800 in bitcoin 5 years ago makes you a millionaire today. Most software engineers are going to be just fine making one or two gambles on that order, and if it means they get more involved in new tech and have fun all the while I think it's a great idea.

Mahn 9y ago

> but it surely looks exciting Or terrifying, take your pick.

deleted 9y ago

[deleted]

Taek 9y ago

I can't tell if you intentionally passed over the point, but this kind of circular investing is not sustainable. If something has value only because people buy it, at some point there are going to be more people taking profit than putting new money in. That's when the price starts to fall. If Bitcoin's price history is anything to go by, when the prices start to fall, they will fall fast and hard. At least in Bitcoin's case, there's a core value proposition that's actually worthwhile, so it's able to recover. With most of these ICOs, the core value proposition isn't actually valuable. When the price finally starts to collapse, the floor could be very low, and there may not be a recovery. See the old tokens Quarkcoin, Primecoin, and most of the rest of the top 25 altcoins from 2013

saimiam 9y ago
I know very little about ICOs other than what I have read on HN and HN comments so take what I'm saying with a pinch of salt. My understanding is that an ICO is like an IPO minus a century+ of regulation and oversight by the authorities and instead of a share of future earnings, you get a share of a closed economy. The oversight and rules governing stock offerings is fantastic no doubt but when you describe a Coin as a circular investment scam, I think you are glossing over the possibility that the economy you are buying into could become valuable. An example of this would be Second Life which at one point had a thriving virtual economy in digital goods. Extrapolating further, ICOs, due to their horizontal, borderless nature, are going to be instrumental in further tying together a global economy. Just like they used to say no two countries on the Dell supply chain would fight wars with each other, I can't imagine a world dominated by ICOs for different slivers of the online economy actually fighting an IRL war. Probably utopian but I think worrying about ICOs being a ponzi/greater fool get rich scheme overshadows its potentials.
- Taek 9y ago
  In 2001 if you said that the Internet was going to be worth $1 trillion dollars, you were correct. But 99% of investments on internet companies in 2001 were bad investments. That's where we are today with ICOs. Cryptocurrency is going to be absolutely massive, and it has some very intelligent people doing amazing things. But the vast majority of ICOs are going to flop. Look at the rankings in 2013: http://web.archive.org/web/20131218060943/http://coinmarketcap.com/ http://web.archive.org/web/20131218060943/http://coinmarketc...

nicpottier 9y ago

While by and large I agree about most ICOs, I think the value proposition is a lot clearer for something like Filecoin. Does that necessarily mean it is worth what it is valued at? No, but comparing the IPFS folks with total snake oil is a bit unfair.

krrrh 9y ago
Sure, but it's kind of like saying that FTP looked like it would be a useful protocol in 1985, and an early draft of RFC 959 should have been adequate to raise gobs of money. In the end FTP added a lot of value to the internet, but it doesn't mean that the folks who wrote the reference implementations would have known what to do with the equivalent of $1B.
- nicpottier 9y ago
  Sure, but there's a weird / interesting aspect to these ICOs here as well, in that the valuation of the coin is also what will drive adoption of the providers. Since miners will be paid in coin to validate providers and providers will also be paid in coins, then there needs to be some value associated with it. The ICO in this case kind of bootstraps the value of the coin in a way that is needed in order to bring on miners and providers. So in a way the value being raised is a bit like capital costs that the network will "spend" to bootstrap and verify the network. Don't get me wrong, this is a lot of money to raise, but saying this is totally nuts without taking into account that the model is very different (and interesting!) is not giving credit where its due. Will it work? Who knows and certainly most startups fail, but it isn't a foregone conclusion.
Taek 9y ago
Yes, but is the value proposition really $2.5 billion _pre-product_ for a team of maybe 20 (not sure exactly how many people are on Protocol Labs payroll)? And, did people actually do their diligence? Did any of the investors confirm with qualified academics and blockchain specialists that their Proof-of-Spacetime paper is secure and functional? Or did the market blindly throw $186 million in one hour into a hot deal because it's the hottest deal? Juan has been saying for years that one of their primary goals for Filecoin was a token sale to fund Protocol Labs.

al2o3cr 9y ago

ICOs are a new breed in economy Pumping up worthless crud with tons of PR to get suckers, er "investors" to "get in now" is an old old old scam. Adding "with cryptocurrency" onto the end of it doesn't make it new.

igorgue 9y ago
You get liquidity the next day instead of in 5 or 10 than with regular startups, I don't see a problem with that, investors are here to make money right? Is not like it doesn't happen with the regular VC cash money right? E.g. Color? Or with regular stock market. e.g. Enron. Clueless investors are always gonna be there.
- loceng 9y ago
  How can you make the claim that that $186M is liquid? Last time someone dumped a large amount - $1-2M worth of Etheruem's Ether? - it tanked.
  - ojr 9y ago
    it was a flash crash as in it ended in a flash/quickly and the price rebounded, central banks becoming insolvent and not being liquid and needing bailouts are the reason there is high speculation in crypto tokens in the first place, the trust is shifted from the bankers to the developers
    - loceng 9y ago
      That's a neat distraction from how crypto-assets will ultimately shift a lot (an unreasonable amount) of wealth to early adopters simply because they were early adopters, if it gains a legitimate status as a currency throughout nations.
  - nicpottier 9y ago
    1) The $186M raised was a mix of Ethereum, Bitcoin and cash. We don't really know how much was of each. 2) They really don't need to sell all at once and who knows, may even have engineers willing to be paid in cryptocurrencies.

Cakez0r 9y ago

> People are not investing hoping for the project to be developed - they're investing because they know others will as well, which will drive the prices up. I found out recently that this is called the Greater Fool Theory - https://en.wikipedia.org/wiki/Greater_fool_theory https://en.wikipedia.org/wiki/Greater_fool_theory

beepboopbeep 9y ago
Bingo.
mtgx 9y ago
Reminds me of the time Facebook's valuation was growing by +$5 billion every 2 weeks, and Techcrunch was writing an article about it every time, further passing the hot patato along to late investors, while making the initial investors richer and richer.
Confiks 9y ago
Or, perhaps with a better name, a Keynesian beauty contest: https://en.wikipedia.org/wiki/Keynesian_beauty_contest#Overview https://en.wikipedia.org/wiki/Keynesian_beauty_contest#Overv...

beepboopbeep 9y ago

>I'm not sure, but it surely looks exciting (even though most projects behind ICOs are complete crap). Bubbles and fraud are not really exciting per se...

shykes 9y ago

Maybe I'm the exception, but I invested in filecoin because I'm excited about IPFS and believe coin-incentivized storage would be a very powerful feature and something I would love to spend my week-ends hacking on. I'm also an early investor in the company behind IPFS for the same reason. I haven't invested in any other crypto-currencies, and don't have any plans to do so. Just one datapoint.

nerfhammer 9y ago

> If our future economies will be driven by these tokens, It won't. This is zero sum gambling, not investment. Economic growth does not come from this.

evv 9y ago
I think its pretty short-sighted to say that ICO craze will not result in economic growth. As one early example, take a look at the Ethereum DAO, which allows arbitrary investors to participate in opportunities that may not otherwise exist.
- gus_massa 9y ago
  Until it was hacked and no one dare to build the 2.0 version. Moreover. In The DAO, the "tokens" gave you voting rights so the "curators" couldn't pick up all the money and go to the small island in the Caribe on vacation^H^H^H^H^H^H^H^H^H^H^H to write a white paper. Also, in The DAO you can get (most/hopefully) of your Ethereum back, with a (incredible useful) one month delay. I.E. someone realize that you can pick all the money without giving any concrete right to the "investors".