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You fail to understand the big picture so let me help you (and perhaps @jedberg) out a bit. Many yes, but not all, are scams and in fact the concept of an ICO

You fail to understand the big picture so let me help you (and perhaps @jedberg) out a bit. Many yes, but not all, are scams and in fact the concept of an ICO is just as significant as cryptocurrency itself (though cryptocurrency a required predecessor). ICOs (tokens) are to IPOs (stocks) what cryptocurrency is to fiat currency. Just as banks will fight and make a fuss about cryptocurrency, stock exchanges (and banks again) will make a fuss about ICOs. Why? It's because ICOs, like cryptocurrency - are decentralized & blockchain powered and as such require no regulation or centralized authority to give them legitimacy. The blockchain, an immutable append-only log of transactions gives them legitimacy. In other words, crypto currency and ICOs 'cut out the middlemen' - and the middlemen don't like it (hence they will try to give ICOs negative press; but of course the pyramid schemers and scam artists don't help the matter either). Yet banks and exchanges are perhaps the lesser of worries; it is at the end of the day big brother who is most concerned because this entire crypto/blockchain movement has the potential to render their system of control - which is based on controlling and imposing rules on capital (something very difficult to do with the aforementioned crypto tech) - totally ineffective in the future. So yes, just as in the early days of the internet there were those who used it to share & publish scams or porn - there are some ICOs or users of cryptocurrency engaged in scams or questionable activity. But just because you can share porn on the internet does not mean it isn't going to be a critical business technology one day in the near future. In the meantime, expect big brother and its friends in media to be-little and all out attack the tech and the people who use it (via more laws & regulation, censorship and ultimately intimidation & force) until it inevitably becomes apart of everyday business.

jedberg 9y ago
That explains the philosophical reasons, but just like cryptocurrency is weak compared to fiat currency, ICOs still sound even weaker than stocks. It's nice that there is no regulation, but in the case of both fiat currency and stock, it is the regulation that gives it value, because they are backed by a system of laws and an army to protect those laws. Like with stocks, they are already somewhat subject to the psychological whims of the shareholders, but what keeps most stock prices fairly stable is the fact that everyone who holds it knows that the worst case scenario is that the underlying company is liquidated and everyone gets some money back. With a crypto coin, if the masses just decide that it isn't worth anything anymore, then it just isn't worth anything anymore. It has no backing in reality as far as I can tell.
- jstanley 9y ago
  > With a crypto coin, if the masses just decide that it isn't worth anything anymore, then it just isn't worth anything anymore. Note that this is true of every currency, not just cryptocurrency.
- mrschwabe 9y ago
  > "It's nice that there is no regulation, but in the case of both fiat currency and stock, it is the regulation that gives it value, because they are backed by a system of laws and an army to protect those laws." Sure, but ultimately the value is not for you or me or the government to decide necessarily - it is a collective decision by the market. If the market eventually comes to a consesus that this whole idea of large scale government is a failed concept and that it only results in monopolies, wars, and extreme inequalities - then people can choose to abandon that system in favor of something they might prefer and see a brigther future for; something that is decentralized without any central authority perhaps. Personally, I would rather invest in companies that don't have to pay enormous legal fees and jump through umpteen regulations designed to benefit a failed system - I'd rather my capital flow away from violent 'armies' as you say and directly into the hands of those implementing new ideas on the front-line of innovation. Just so happens I can do just that, just send me your BTC address. And if you'd like to give me a return, you need only a BTC address of mine - there we just transacted a stock using no more than two Bitcoin addresses. See the power here? If even not for philosophical reasons, people are going to choose this method for trading securities (or whatever you want to call them) because it is easier. You can't reverse that; the cat is already out of the bag so to speak. > "With a crypto coin, if the masses just decide that it isn't worth anything anymore, then it just isn't worth anything anymore. It has no backing in reality as far as I can tell." That is a natural course of any failed business. Try not to invest in the ones that you feel people may one day decide isn't worth anything anymore and you'll be fine. We don't need the government to hand-hold us in our day to day lives; certainly not in what we eat, consume, read, or invest (or not invest) in.
alexasmyths 9y ago
"ICOs (tokens) are to IPOs (stocks) what cryptocurrency is to fiat currency." No - absolutely not. An IPO is the sale of shares in a company. It comes with a whole set of legal rights - most importantly, legal rights to the assets of the company. Crypto-currencies are just another form of arbitrary currency that have different parameters - and by the way - crypto currencies are definitely 'fiat' currencies (i.e. they have value because they are declared to have value and that's it) - a non-fiat currency would be backed by an asset like Gold or property. Crypto-currencies imply zero rights to assets of the company, which is a pretty big deal. Most currencies in the world are in fact 'backed' by something. USD are backed by TBills and crap property. The Euro is backed by 'good assets' generally. "In other words, crypto currency and ICOs 'cut out the middlemen'" No - definitely not. ICOs are way to sell NOTHING to people for actual money. 'Cutting out the middle man' in an IPO would be akin to skipping brokerages or something of the like - i.e. direct sales to consumers. With ICO's - coin owners get nothing in return, i.e. no rights to assets or future profits. "there are some ICOs or users of cryptocurrency engaged in scams or questionable activity" Can anyone name any ICO's wherein the coins have gone on to support a healthy economy for which that currency was supposed to support? Because the Kin (i.e. Kik) coins are down to 1/5th their original valuation - they are not being used for anything in the economy - and Kik owns enough Kin to devalue the current economy by over 90%, meaning the current Kins are worth about 1/10th of their value. "You fail to understand the big picture so let me help you (and perhaps @jedberg) out a bit." No - I'm sorry but you fail to understand. So many people on here who support BTC have no financial or economic understanding of what it is - they are blinded by the admittedly very cool technological aspects and the 'utopian promises'. The notion of a 'decentralized currency' is really cool, but it's not likely to happen for a variety of reasons. Basically all ICOs are scams. Most coins will die soon - BTC will be around for a while yet.
- mrschwabe 9y ago
  > "set of legal rights to assets" ... "zero rights to assets" Who cares who gives you rights to the assets? If I invest in a company, I've already decided to bet on them. If they choose to screw me over - fine, I will no longer invest in them - and neither should anyone else. Why do you want to involve the government to enforce 'your right' over someone else - why don't you take responsbility for your own failed investment? Let the company set the terms, including for insolvency scenarios, and take the risk knowing that they may or may not be able to fulfil them but it's up to you to give them that chance. When I make an investment, I am willing to trust the business issuing the share/token 100% to do the right thing. If the business is run by left-nut SJWs drinking soy latte's all day then I'm gunna run away or pull my funds out ASAP cause these are the types who will most likely fail or compromise when big brother comes along and demands to undermine the business by installing a backdoor for which to expose all of said business' customer data. > "would be akin to skipping brokerages or something of the like - i.e. direct sales to consumers." Exactly. > "blinded by the admittedly very cool technological aspects and the 'utopian promises'." It's not a utopia - it's a vision for the future unfolding, 'happening right now' , for a variety of reasons. And yeah, at $7.5k per coin today I agree it's going to be around for a while yet. > "With ICO's - coin owners get nothing in return, i.e. no rights to assets or future profits." That is, for the scams - yes. But same line of thinking as I described above - stop assuming the government can enforce anything and instead trust the company to follow through on what it has promised you in the initial offering. If they say they will issue you a dividend in proportion to your total number of tokens - you and every other token holder should hold them accountable to do that (the blockchain and open bookkeeping btw can make it even easier to audit them in this regard) > "Basically all ICOs are scams" Let's agree to disagree on that one - but full disclosure, other than ETH (later sold for ETC after the fork), I have never invested in a hyped up ICO myself. But when and if I do, I certainly don't want big brother 'enforcing' anything with regards to the transaction or the business issuing the token.
bfuller 9y ago
You really wasted your breath here
- mrschwabe 9y ago
  You're not the only one who reads HN, but thx for the input - I'll try to avoid replying to you in the future.
  - bfuller 9y ago
    I am attempting to be constructive here and not insulting. We fundamentally agree, and your response just like a condescending adderal fueled tirade.
    - mrschwabe 9y ago
      Duly noted; it was certainly a late night tirade - no adderal but lot's of carbs & sugar - I apologize for coming across as condescending.
knowThySelfx 9y ago
Hashgraph seems a promising alternative: http://www.thewindowsclub.com/what-is-hashgraph http://www.thewindowsclub.com/what-is-hashgraph http://www.swirlds.com/whitepapers/ http://www.swirlds.com/whitepapers/ https://hashgraph.com/ https://hashgraph.com/

jedberg 9y ago

That explains the philosophical reasons, but just like cryptocurrency is weak compared to fiat currency, ICOs still sound even weaker than stocks. It's nice that there is no regulation, but in the case of both fiat currency and stock, it is the regulation that gives it value, because they are backed by a system of laws and an army to protect those laws. Like with stocks, they are already somewhat subject to the psychological whims of the shareholders, but what keeps most stock prices fairly stable is the fact that everyone who holds it knows that the worst case scenario is that the underlying company is liquidated and everyone gets some money back. With a crypto coin, if the masses just decide that it isn't worth anything anymore, then it just isn't worth anything anymore. It has no backing in reality as far as I can tell.

jstanley 9y ago
> With a crypto coin, if the masses just decide that it isn't worth anything anymore, then it just isn't worth anything anymore. Note that this is true of every currency, not just cryptocurrency.
mrschwabe 9y ago
> "It's nice that there is no regulation, but in the case of both fiat currency and stock, it is the regulation that gives it value, because they are backed by a system of laws and an army to protect those laws." Sure, but ultimately the value is not for you or me or the government to decide necessarily - it is a collective decision by the market. If the market eventually comes to a consesus that this whole idea of large scale government is a failed concept and that it only results in monopolies, wars, and extreme inequalities - then people can choose to abandon that system in favor of something they might prefer and see a brigther future for; something that is decentralized without any central authority perhaps. Personally, I would rather invest in companies that don't have to pay enormous legal fees and jump through umpteen regulations designed to benefit a failed system - I'd rather my capital flow away from violent 'armies' as you say and directly into the hands of those implementing new ideas on the front-line of innovation. Just so happens I can do just that, just send me your BTC address. And if you'd like to give me a return, you need only a BTC address of mine - there we just transacted a stock using no more than two Bitcoin addresses. See the power here? If even not for philosophical reasons, people are going to choose this method for trading securities (or whatever you want to call them) because it is easier. You can't reverse that; the cat is already out of the bag so to speak. > "With a crypto coin, if the masses just decide that it isn't worth anything anymore, then it just isn't worth anything anymore. It has no backing in reality as far as I can tell." That is a natural course of any failed business. Try not to invest in the ones that you feel people may one day decide isn't worth anything anymore and you'll be fine. We don't need the government to hand-hold us in our day to day lives; certainly not in what we eat, consume, read, or invest (or not invest) in.

alexasmyths 9y ago

"ICOs (tokens) are to IPOs (stocks) what cryptocurrency is to fiat currency." No - absolutely not. An IPO is the sale of shares in a company. It comes with a whole set of legal rights - most importantly, legal rights to the assets of the company. Crypto-currencies are just another form of arbitrary currency that have different parameters - and by the way - crypto currencies are definitely 'fiat' currencies (i.e. they have value because they are declared to have value and that's it) - a non-fiat currency would be backed by an asset like Gold or property. Crypto-currencies imply zero rights to assets of the company, which is a pretty big deal. Most currencies in the world are in fact 'backed' by something. USD are backed by TBills and crap property. The Euro is backed by 'good assets' generally. "In other words, crypto currency and ICOs 'cut out the middlemen'" No - definitely not. ICOs are way to sell NOTHING to people for actual money. 'Cutting out the middle man' in an IPO would be akin to skipping brokerages or something of the like - i.e. direct sales to consumers. With ICO's - coin owners get nothing in return, i.e. no rights to assets or future profits. "there are some ICOs or users of cryptocurrency engaged in scams or questionable activity" Can anyone name any ICO's wherein the coins have gone on to support a healthy economy for which that currency was supposed to support? Because the Kin (i.e. Kik) coins are down to 1/5th their original valuation - they are not being used for anything in the economy - and Kik owns enough Kin to devalue the current economy by over 90%, meaning the current Kins are worth about 1/10th of their value. "You fail to understand the big picture so let me help you (and perhaps @jedberg) out a bit." No - I'm sorry but you fail to understand. So many people on here who support BTC have no financial or economic understanding of what it is - they are blinded by the admittedly very cool technological aspects and the 'utopian promises'. The notion of a 'decentralized currency' is really cool, but it's not likely to happen for a variety of reasons. Basically all ICOs are scams. Most coins will die soon - BTC will be around for a while yet.

mrschwabe 9y ago
> "set of legal rights to assets" ... "zero rights to assets" Who cares who gives you rights to the assets? If I invest in a company, I've already decided to bet on them. If they choose to screw me over - fine, I will no longer invest in them - and neither should anyone else. Why do you want to involve the government to enforce 'your right' over someone else - why don't you take responsbility for your own failed investment? Let the company set the terms, including for insolvency scenarios, and take the risk knowing that they may or may not be able to fulfil them but it's up to you to give them that chance. When I make an investment, I am willing to trust the business issuing the share/token 100% to do the right thing. If the business is run by left-nut SJWs drinking soy latte's all day then I'm gunna run away or pull my funds out ASAP cause these are the types who will most likely fail or compromise when big brother comes along and demands to undermine the business by installing a backdoor for which to expose all of said business' customer data. > "would be akin to skipping brokerages or something of the like - i.e. direct sales to consumers." Exactly. > "blinded by the admittedly very cool technological aspects and the 'utopian promises'." It's not a utopia - it's a vision for the future unfolding, 'happening right now' , for a variety of reasons. And yeah, at $7.5k per coin today I agree it's going to be around for a while yet. > "With ICO's - coin owners get nothing in return, i.e. no rights to assets or future profits." That is, for the scams - yes. But same line of thinking as I described above - stop assuming the government can enforce anything and instead trust the company to follow through on what it has promised you in the initial offering. If they say they will issue you a dividend in proportion to your total number of tokens - you and every other token holder should hold them accountable to do that (the blockchain and open bookkeeping btw can make it even easier to audit them in this regard) > "Basically all ICOs are scams" Let's agree to disagree on that one - but full disclosure, other than ETH (later sold for ETC after the fork), I have never invested in a hyped up ICO myself. But when and if I do, I certainly don't want big brother 'enforcing' anything with regards to the transaction or the business issuing the token.

bfuller 9y ago

You really wasted your breath here

mrschwabe 9y ago
You're not the only one who reads HN, but thx for the input - I'll try to avoid replying to you in the future.
- bfuller 9y ago
  I am attempting to be constructive here and not insulting. We fundamentally agree, and your response just like a condescending adderal fueled tirade.
  - mrschwabe 9y ago
    Duly noted; it was certainly a late night tirade - no adderal but lot's of carbs & sugar - I apologize for coming across as condescending.

knowThySelfx 9y ago

Hashgraph seems a promising alternative: http://www.thewindowsclub.com/what-is-hashgraph http://www.thewindowsclub.com/what-is-hashgraph http://www.swirlds.com/whitepapers/ http://www.swirlds.com/whitepapers/ https://hashgraph.com/ https://hashgraph.com/