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This is really good to see. Separating the scam ICOs from the non-scam ICOs is only going to become more important in the future.

root_axis 9y ago
I can't envision a future where they are anything but a scam. The tokens have no legal or economic connection to any business activity produced by the token creators so I don't see why any ICO token would be worth any more than any other besides hype.
- pavel_lishin 9y ago
  They seem like Kickstarter bred with stocks - mostly an unenforceable promise of future products/services/magic to the users who buy the initial coins. An employee where I work recommended we do our own ICO, but for the life of me, I couldn't figure out what it was that the coins would eventually be exchanged for. Maybe I'm just too dumb - he's objectively smarter than me, I'll freely admit - but it seemed not too different from shaking a cup to passersby.
  - joosters 9y ago
    This flaw has not stopped many ICOs!
  - root_axis 9y ago
    Yeah, being very smart doesn't seem to be an effective inoculant against blockchain hysteria. Then again, the ICO scammers are making millions and I'm not, so, maybe I'm getting ahead of myself.
  - deleted 9y ago
    [deleted]
- tekromancr 9y ago
  Sort of. For situations where the coin represents some ambiguous "share" of the project, absolutely. However, when the tokens are used as an incentive mechanism for a fledgling decentralized network, I think it makes a bit more sense. Things like Sia or Storj or Ether or Ark where the token is there to function as a cost/reward for using/providing the service that the network provides (filestorage, smart contracts, decentralized cryptocurrency exchange) I believe that it actually does have some intrinsic value.
  - root_axis 9y ago
    Although I am skeptical of the utility of 99% of these decentralized networks (Storj seems at least a worthwhile experiment), I think that's a fair distinction since the blockchain logic can ensure that tokens represent some stake in the decentralized network.
  - tlrobinson 9y ago
    I think even in most of those cases it would make more sense to use Bitcoin or Ethereum, which users are more likely to already have, and will likely be less volatile.
- smokeyj 9y ago
  What excites me most about ICOs is how accessible it makes organization. To get a group of 10 people to work on a common goal and share the reward is surprisingly difficult. The overhead of the legal and accounting costs makes it a non-start for anything worth less than a multi-million dollar venture. But what about all the opportunities below that? Local shops, gardens, and service based businesses? I'd like to see a set of standardized smart contracts, where if you adhere to the protocols of the contract, investors can enjoy the benefit of certain expectations. Such as, the cap table being accurate. The distribution of shares will be known, along with the voting power of all members. The flow of income and payout of dividends will also be transparent. If complying with regulation is cheap and accessible more people will do it. I'd like the SEC to open a github account and create regulatory compliant smart contracts. Let's welcome everyone into the business class and encourage local investments in our communities. That's my vision for ICOs at least.
- stale2002 9y ago
  Well, if the company ACTUALLY produces what was promised, and gives the token owners what they are owed, then it wasn't a scam.
IMTDb 9y ago
Which ICO was not a scam ?
- berberous 9y ago
  Scam =/= terrible investment idea. Tezos and Filecoin, for example, are not scams. They are serious projects that are attempting to bring something useful to the market. That said, they raised wayyy too much money, and may end up being terrible investments that don't return any profit, but that applies to many startups as well. PlexCoin offered guaranteed 1300% returns or your money back. That is a pure scam.
  - beager 9y ago
    Just because something is a good idea doesn't mean that it wasn't conceived or promoted specifically to scam people out of their money. Not speaking to Filecoin or Tezos specifically, but if something is a really good idea, why not take VC money or bootstrap it?
    - berberous 9y ago
      Many reasons. Here's a couple I can think of off the top of my head: 1) VC money comes with strings, and founders don't like to have the sword of Damocles hanging over their heads. (Although I think those founders are misguided, as I think most companies benefit from oversight). 2) ICO money is cheaper and plentiful. If it's available, why not take it? This is especially problematic when you have multiple companies pursuing the same idea. Take using the blockchain to create a data storage market. Filecoin raised $200mm+. Imagine they instead raised $3mm from VCs, and another competitor with less qualms raised $200mm. They would now have to compete with someone wayyyy better capitalized than they are. In the tech world, one company often wins the market. Being second could kill your company. Is Uber scamming middle east sovereign wealth funds because they are letting them invest on crazy terms, when they could just as easily start turning a profit or go public? I think a company has a duty to: (1) disclose things honestly, (2) warn people of the risks, and (3) consider the danger of raising too much public money on the success of their venture. Beyond that, if investors wants to dump cheap money on them, why is it a 'scam' to accept?

root_axis 9y ago

I can't envision a future where they are anything but a scam. The tokens have no legal or economic connection to any business activity produced by the token creators so I don't see why any ICO token would be worth any more than any other besides hype.

pavel_lishin 9y ago
They seem like Kickstarter bred with stocks - mostly an unenforceable promise of future products/services/magic to the users who buy the initial coins. An employee where I work recommended we do our own ICO, but for the life of me, I couldn't figure out what it was that the coins would eventually be exchanged for. Maybe I'm just too dumb - he's objectively smarter than me, I'll freely admit - but it seemed not too different from shaking a cup to passersby.
- joosters 9y ago
  This flaw has not stopped many ICOs!
- root_axis 9y ago
  Yeah, being very smart doesn't seem to be an effective inoculant against blockchain hysteria. Then again, the ICO scammers are making millions and I'm not, so, maybe I'm getting ahead of myself.
- deleted 9y ago
  [deleted]
tekromancr 9y ago
Sort of. For situations where the coin represents some ambiguous "share" of the project, absolutely. However, when the tokens are used as an incentive mechanism for a fledgling decentralized network, I think it makes a bit more sense. Things like Sia or Storj or Ether or Ark where the token is there to function as a cost/reward for using/providing the service that the network provides (filestorage, smart contracts, decentralized cryptocurrency exchange) I believe that it actually does have some intrinsic value.
- root_axis 9y ago
  Although I am skeptical of the utility of 99% of these decentralized networks (Storj seems at least a worthwhile experiment), I think that's a fair distinction since the blockchain logic can ensure that tokens represent some stake in the decentralized network.
- tlrobinson 9y ago
  I think even in most of those cases it would make more sense to use Bitcoin or Ethereum, which users are more likely to already have, and will likely be less volatile.
smokeyj 9y ago
What excites me most about ICOs is how accessible it makes organization. To get a group of 10 people to work on a common goal and share the reward is surprisingly difficult. The overhead of the legal and accounting costs makes it a non-start for anything worth less than a multi-million dollar venture. But what about all the opportunities below that? Local shops, gardens, and service based businesses? I'd like to see a set of standardized smart contracts, where if you adhere to the protocols of the contract, investors can enjoy the benefit of certain expectations. Such as, the cap table being accurate. The distribution of shares will be known, along with the voting power of all members. The flow of income and payout of dividends will also be transparent. If complying with regulation is cheap and accessible more people will do it. I'd like the SEC to open a github account and create regulatory compliant smart contracts. Let's welcome everyone into the business class and encourage local investments in our communities. That's my vision for ICOs at least.
stale2002 9y ago
Well, if the company ACTUALLY produces what was promised, and gives the token owners what they are owed, then it wasn't a scam.

IMTDb 9y ago

Which ICO was not a scam ?

berberous 9y ago
Scam =/= terrible investment idea. Tezos and Filecoin, for example, are not scams. They are serious projects that are attempting to bring something useful to the market. That said, they raised wayyy too much money, and may end up being terrible investments that don't return any profit, but that applies to many startups as well. PlexCoin offered guaranteed 1300% returns or your money back. That is a pure scam.
- beager 9y ago
  Just because something is a good idea doesn't mean that it wasn't conceived or promoted specifically to scam people out of their money. Not speaking to Filecoin or Tezos specifically, but if something is a really good idea, why not take VC money or bootstrap it?
  - berberous 9y ago
    Many reasons. Here's a couple I can think of off the top of my head: 1) VC money comes with strings, and founders don't like to have the sword of Damocles hanging over their heads. (Although I think those founders are misguided, as I think most companies benefit from oversight). 2) ICO money is cheaper and plentiful. If it's available, why not take it? This is especially problematic when you have multiple companies pursuing the same idea. Take using the blockchain to create a data storage market. Filecoin raised $200mm+. Imagine they instead raised $3mm from VCs, and another competitor with less qualms raised $200mm. They would now have to compete with someone wayyyy better capitalized than they are. In the tech world, one company often wins the market. Being second could kill your company. Is Uber scamming middle east sovereign wealth funds because they are letting them invest on crazy terms, when they could just as easily start turning a profit or go public? I think a company has a duty to: (1) disclose things honestly, (2) warn people of the risks, and (3) consider the danger of raising too much public money on the success of their venture. Beyond that, if investors wants to dump cheap money on them, why is it a 'scam' to accept?