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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?

#211

Post by satyrnein »

blhack wrote: post #87

I can't believe there is no mention of tezos here ( https://www.tezos.com/ ). Which currently has raised $123,317,760.00 in bitcoins and $68,709,765.86 in ethereum. Almost $200,000,000 raised for something that doesn't even exist yet, all so that the founders can create it. It's basically $200,000,000 into a kickstarter. What the absolute frell is going on there I have no idea.

Kickstarter! Thank you!

I had been wondering what the appropriate comparison was for ICOs, which don't confer ownership, dividends, etc.

The difference I guess is that these are tradable immediately, whereas with Kickstarter, you have to hope they produce something tangible you can eventually sell on eBay.

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

#212

Post by erikb »

curiousgal wrote: post #51
erikb wrote: post #42

Earlier quoted context omitted.

Ethereum has the right play here though. They go to where the gold rush is and sell the shovels.

I think the exchanges are the ones selling shovels and am certain that they have a horse in that race; e.g. Kraken added support for trading EOS yesterday, started at $1 now it's at $4.16. With potential ROIs like that (all across the board) I am certain that Wall Street cowboys are all over this market. But at least we have the SEC to protec..oh we don't.

The thing about proverbs is that you shouldn't apply them literally. "selling shovels" here means: Instead of taking part in the hype something that is used by hype-seekers to fascilitate their yearning is sold. It's often very likely that there are a lot of different kinds of businesses who profit this way. Sure the exchanges are profiting, the hash-box-producers profit, the VCs profit. In the original sense there were also different businesses profiting from the gold rush. Besides shovels you also had to buy food, other tools, shelter, a claim to a piece of land, etc.

The special thing about Ethereum here is that they act like a participant in the gold rush to some degree. I actually thought they produce coins and try to find a meaningful use for them, just like bitcoin. But in fact they provide an infrastructure for coin producers. That's really interesting, imo. Since no matter how it goes, they will profit from it, and can easily exit any time when they feel the profits are diminishing too much.

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

#213

Post by netsharc »

jo909 wrote: post #131
bhouston wrote: post #100

Earlier quoted context omitted.

Where is this 200M coming from? Just random people on the internet? I guess some of this is from Etherum and Bitcoin early investors who have been their holdings appreciate? The numbers are staggering given that I think institutional and professional investors are not in this market?

I feel like thinking about it as "200M USD" is not helpful when talking about the source of that "money". I'm sure the amount of "fresh" USD that where recently exchanged to a crypto-currency only to participate in this ICO is absurdly small. This is a very very small amount of current total bitcoin market cap when expressed in USD. What might illustrate this is the famous pizza that was purchased with bitcoin in 201…

Hah, great comparison. But somewhere in the world there must be a Lamborghini that's been traded for a slice or 2 of pizza...

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

#214

Post by netsharc »

sktrdie wrote: post #74

Rather than thinking about the businesses that currently are trying to get rich by doing ICOs, I'd like to point out that the idea of creating tokens out of thin-air, and having them obtain value purely by speculation, is an interesting system we should ponder more about. We're now capable, thanks to these consensus systems, of creating tokens that have certain properties. For instance Bitcoin is a specific kind of t…

To abstract it a bit further, the banknotes and coins you have in your wallet are also just tokens of value, just widely more accepted than cryptographic signatures. I have a hundred trillion dollars, Zimbabwean, in my wallet, and its worth comes just from the novelty. Although their government did try to enforce the value of their currency once by threat of violence, so shops were forced to give up TVs for worthless pieces of paper...

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

#215

Post by jonnathanson »

omarchowdhury wrote: post #196
calafrax wrote: post #180

Earlier quoted context omitted.

You have to wonder how much insider trading goes into this. I would assume there are some big bitcoin/ether holders from the early days now who are sitting on billions in theoretical worth and the ICOs provide an inflow of cash that allows them to cash out. If you have a big bitcoin/ether position then you can make these ICOs pop and then the momentum ends up pulling more people into ether/bitcoin which allows you to…

This is exactly what has to be happening.

Totally. I would actually be surprised if it's not the case.

I'd also expect a decent amount of what is essentially wire fraud from "startups" who never intend to ship anything.

The blockchain is a revolutionary concept, but right now it's looking like little more than a wild west of fly-by-night opportunism.

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

#216

Post by banku_brougham »

dandero wrote: post #195
Animats wrote: post #161

Mastercoin, mentioned in the article, is now down to 85th place on Coin Market Cap. Despite all this smart contract stuff, few of these "ICO coins" give the holders any authority over anything. It's not like 51% of the coin holders can fire management. Ethereum now has half the market cap of Bitcoin, despite the total failure of the DAO, the one big application of the smart contract technology. See "Use Cases Of Ethe…

"Ethereum now has half the market cap of Bitcoin, despite the total failure of the DAO, the one big application of the smart contract technology. See "Use Cases Of Ethereum In Different Sectors 2016" It's funny how tech people can't understand that innovation is a trial and error path. Ethereum is doing something that has never been done, trying to disrupt the concept of finance and you are talking here about the DAO…

Technical failures are lethal to many kinds of enterprise, I'd put technical failures of financial instruments in a category of its own.

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

#217

Post by marknyc »

omarchowdhury wrote: post #37
bitxbitxbitcoin wrote: post #35

Earlier quoted context omitted.

I wonder what percentage of ICO investors actually read through the corresponding whitepaper to try and discern the real claim of value... I truly do.

They just scroll it. And do you know who they are? The Chinese. The Chinese are the ones fueling the ICO craze. How do I know? I'm hanging out in a Slack channel full of them. I asked them how did you get into crypto? Verbatim response was that "friend said it easy money". Then he said "China full of money." Full of money indeed. In fact the majority of ICOs are not even open to Americans.

Can you tell me the slack channel and how to get invited? I'm located in the US but would love to hear and see what investors in China are thinking. Thanks.

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

#218

Post by hellbanner »

api wrote: post #96
blhack wrote: post #87

I can't believe there is no mention of tezos here ( https://www.tezos.com/ ). Which currently has raised $123,317,760.00 in bitcoins and $68,709,765.86 in ethereum. Almost $200,000,000 raised for something that doesn't even exist yet, all so that the founders can create it. It's basically $200,000,000 into a kickstarter. What the absolute frell is going on there I have no idea.

> What the absolute frell is going on there I have no idea. Money laundering? Flight capital? Under the table payments for services rendered in some other area? I have no insider knowledge. It's just a speculation. But if even 10% of this actually exists in some liquid sense this is serious money. The number of participants in these markets is far lower than Kickstarter and yet the money in question here is massive.…

Re your last sentence: http://www.nytimes.com/2013/05/13/arts/design/art-proves-att...

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

#219

Post by stefek99 »

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…

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

Psychology?

Telling about something increases interest...

I have a website https://icofomo.com

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