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Right, but at that point, what's the difference between an ICO and a security? If I was an investor, why would I want to go into an ICO vs traditional means?

vkou 8y ago
A non-security ICO coin is not a share, it's a pre-order for a product that may or may not ever exist. It's like a Kickstarter project[1], except most of the backers don't actually want the backed product, they want to resell their pre-order to someone who does. At least, that's how it's supposed to work, in theory. In practice, it's a hotbed for scams. Most of the re-sales happen from one speculator to another, until some fool is left holding a bag of worthless pre-orders. [1] Which is also incredibly constrained, because it needs to do something useful with a cryptocurrency, and all the overhead and complexity associated with that. [2] [2] Building a file-hosting service is not good enough - you have to make it a file-hosting service with a crypto-coin bolted on to it for some weird reason.
- JumpCrisscross 8y ago
  > it's a pre-order for a product that may or may not ever exist I'm not even sure it's this. Pre-orders come with rules. ICOs do not. (Or more accurately, they make them difficult and unrewarding to enforce.)
  - vkou 8y ago
    Do they? I was under the impression that I could sell as many pre-orders for my anti-gravity skateboards, and my marks would have very little recourse, as long as I had the right disclaimers, and I don't sell to Europeans. [1] [2] [3] [4] [1] Product might not perform as advertised. [2] Product might not be delivered in the promised timeline. [3] Product might not be completed at all, due to unfortunate circumstances, such as exhaustion of funds, acts of God, or the laws of physics. [4] All pre-orders are final, no refunds.
    - JumpCrisscross 8y ago
      > I could sell as many pre-orders for my anti-gravity skateboards, and my marks would have very little recourse If you had zero intent of making anti-gravity skateboards, they would have criminal recourse. If you had every intent but were marketing the impossible, they may have civil recourse. Not everything can be disclaimed away. Pre-orders, moreover, are regulated in many states. Disclaimer: I am not a lawyer. This is not legal advice. Don't scam people.
      - vkou 8y ago
        I think that proving I had zero intent of building the product in question is about as difficult (Or easy) as proving that I had zero intent of building any useful features for my crap-coin.

vkou 8y ago

A non-security ICO coin is not a share, it's a pre-order for a product that may or may not ever exist. It's like a Kickstarter project[1], except most of the backers don't actually want the backed product, they want to resell their pre-order to someone who does. At least, that's how it's supposed to work, in theory. In practice, it's a hotbed for scams. Most of the re-sales happen from one speculator to another, until some fool is left holding a bag of worthless pre-orders. [1] Which is also incredibly constrained, because it needs to do something useful with a cryptocurrency, and all the overhead and complexity associated with that. [2] [2] Building a file-hosting service is not good enough - you have to make it a file-hosting service with a crypto-coin bolted on to it for some weird reason.

JumpCrisscross 8y ago
> it's a pre-order for a product that may or may not ever exist I'm not even sure it's this. Pre-orders come with rules. ICOs do not. (Or more accurately, they make them difficult and unrewarding to enforce.)
- vkou 8y ago
  Do they? I was under the impression that I could sell as many pre-orders for my anti-gravity skateboards, and my marks would have very little recourse, as long as I had the right disclaimers, and I don't sell to Europeans. [1] [2] [3] [4] [1] Product might not perform as advertised. [2] Product might not be delivered in the promised timeline. [3] Product might not be completed at all, due to unfortunate circumstances, such as exhaustion of funds, acts of God, or the laws of physics. [4] All pre-orders are final, no refunds.
  - JumpCrisscross 8y ago
    > I could sell as many pre-orders for my anti-gravity skateboards, and my marks would have very little recourse If you had zero intent of making anti-gravity skateboards, they would have criminal recourse. If you had every intent but were marketing the impossible, they may have civil recourse. Not everything can be disclaimed away. Pre-orders, moreover, are regulated in many states. Disclaimer: I am not a lawyer. This is not legal advice. Don't scam people.
    - vkou 8y ago
      I think that proving I had zero intent of building the product in question is about as difficult (Or easy) as proving that I had zero intent of building any useful features for my crap-coin.