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What is an Initial Coin Offering and How Does it Work?

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Re: What is an Initial Coin Offering and How Does it Work?

#21

Post by wyldfire »

Previously, we had a filter screening new altcoins (expletive deleted) in that you had to know enough about bitcoin to at least fork the repo, build it and make some modest changes to create a new namespace. We could see whether those coins are worth anything by looking to see if there was a novel PoW or other network changes, premine, etc.

Now, Counterparty and much moreso Ethereum have created an opportunity for anyone to mostly click through to a new asset/token and make claims about some abstract business idea. FOMO drives folks to invest in the pump-n-dump of the day. Very few of these have any real claim of value.

Please, tell your friends not to invest in these ludicrous scams.

Re: What is an Initial Coin Offering and How Does it Work?

#22

Post by richardknop »

wyldfire wrote: post #21

Previously, we had a filter screening new altcoins (expletive deleted) in that you had to know enough about bitcoin to at least fork the repo, build it and make some modest changes to create a new namespace. We could see whether those coins are worth anything by looking to see if there was a novel PoW or other network changes, premine, etc. Now, Counterparty and much moreso Ethereum have created an opportunity for an…

Exactly my thoughts. This is pure gambling. Lots of people will end up losing money while a small amount of people will make millions from these scams.

Re: What is an Initial Coin Offering and How Does it Work?

#26

Post by Anderkent »

jcoffland wrote: post #23

Usually this kind of blatant negativity would be down voted to oblivion but for some reason HN has a special place in it's heart for crypyocurrency haters.

Nope, HN can just see when a 'crowdfunding' system is designed to support scammers.

For fucks sake, even kickstarter etc is full of scams that never deliver - and they work within a legal system, with clear lines of identity and responsibility, and build things that are much easier to understand ahead of the time.

It's obvious that the ICO buyers are half clueless people who can't evaluate the risks, and half folks exploiting the former by buying early and trying to flip the tokens once the market opens up.

Sure, there's certainly some teams that are trying to build legit things with ICOs. But when you have two funding systems, where one is completely open, and the other requires certain guarantees (identity, legal responsibility), the first is always going to be full of scammers.

Re: What is an Initial Coin Offering and How Does it Work?

#27

Post by Anderkent »

Subcide wrote: post #12
fiatjaf wrote: post #3

In the past history of ICOs, did anyone gain from participating in the ICO more than they could have gained by buying the coin later in an exchange?

Yes, though usually not by just holding. ICOs with small caps often list on exchanges at a decent % profit in the first few days, while the people that missed out on the ICO buy in. The link the other user posted obviously doesn't take this into account, and only tracks holding the token indefinitely. In all likelihood, a LOT of people profited on the ICOs that ICOStats lists as negative right now.

I.e. the greater fool theory - buy the ICO so that you can sell it for someone who bought into the hype at a higher price later on.

Re: What is an Initial Coin Offering and How Does it Work?

#28

Post by frgtpsswrdlame »

fowlerpower wrote: post #18

A lot of people are calling these things Scams. People arent wrong and to a certain degree they do attract the "quick buck" type to them. Keep in mind though that these are also very useful for companies to get the Digitial Currency and block chain into the hands of the masses without some of this money, which large parts of that may be burned, will yield some killer apps. The people doing an ICO do it to raise a bun…

That's the point isn't it? A company is offering this to raise money but doesn't actually give anything away? Then where is the value coming from? It's all based on herd mentality and trying to buy the first ticket on the free money train. ICOs are pyramid schemes, the sad thing is that there's a bunch of smart, young internet types falling for it.

Re: What is an Initial Coin Offering and How Does it Work?

#30

Post by objclxt »

jcoffland wrote: post #23

Usually this kind of blatant negativity would be down voted to oblivion but for some reason HN has a special place in it's heart for crypyocurrency haters.

I think there's quite a big difference between hating on crypto-currency as a concept and hating on ICOs. People here very much do the latter, for good reason.
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