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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?

#171

Post by max_ »

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…

First you it's spelled "Ethereum" not "Etherium".

Second, the smart contracts industry has barely made two years and we already have lots of successfull Dapps running on the Ethereum platform(Dex, CryptoDerivatives.Market)

About TheDAO failing, how many air planes crashed before they finally succeeded. And contributed to the current massive mprivement in logistics.

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

#172

Post by drcode »

petertodd wrote: post #164
drcode wrote: post #105

Earlier quoted context omitted.

Vitalik has conceded this was a mistake and has stated he will no longer have any formal role in outside ethereum businesses. He also stated that he was not paid for any of these advisory positions he held.

I've personally seen the price sheets for what he's billed out per hour, and sat through advisory work meetings with him. While it's possibly he wasn't officially paid for those specific ICO advisory positions, he certainly was getting paid for advisory work.

Yes, he meant specifically for ICO advisory positions. Certainly (like almost every other developer) he has been paid for contract work/consulting for some project at some point.

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

#173

Post by aaron-lebo »

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…

Cheers.

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

#174

Post by ethpod »

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…

i was looking for a breakdown like this, thanks. newbie question: hey how about an ICO where token control actually does allow for voting out the CEO. or smart contract delivery of token after development ACTUALLY occurs (approved by stakeholders). any ideas please contact @ethpod on twitter

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

#175

Post by sidko »

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…

Also, an additional note to your comment - remember that the Ethereum network has been backlogged for several hours to almost a day after an ICO (Bancor, Status). Now imagine one production application running on Ethereum. Now imagine several. How would they really even work?

And some projects thought Bitcoin wouldn't scale for micropayments so they should move to Ethereum because they have solved it. Oh boy.

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

#176

Post by ufo »

nostrademons wrote: post #140
ufo wrote: post #92

Earlier quoted context omitted.

A stock is an ownership share in a real (money-making) company. Criptocoins, on the other hand, have questionable intrinsic value.

To be fair, regular currency (USD, Euro, etc.) also has zero intrinsic value, and economists like it that way. Currencies that have intrinsic value (gold, copper pennies, cigarettes) tend to get taken out of circulation as they're used for that value, which makes the money supply freeze up when the value of the currency starts rising and people start hoarding it for price appreciation.

Good point. Although that is another reason why investing in criptocurrencies sounds sketchy: if a currency has a stable and predictable value then it is a lousy form of investment.

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

#177

Post by fiatjaf »

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.

Well, these statistics take in account only a short period of time in which all coins and tokens were going upward like crazy.

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

#178

Post by wyldfire »

coolspot wrote: post #156
hoofish wrote: post #137

Earlier quoted context omitted.

Not necessarily true at all. ICOs can offer revenue pegged tokens against company future revenue - which is then used to buy back the tokens from the investors.

But there is nothing that forces such company to actually share the revenue. Tokens are not legally enforcable.

> Tokens are not legally enforcable

I think this is not accurate. It's more likely accurate to state that their use is not tested in courts. But if you could show corporate communications indicating "such and such mechanism will be how we track obligations to shareholders or creditors" and establish that the tokens were not paid back per the operations of the token mechanism, then in all likelihood a court would agree and find evidence of damages and/or criminal wrongdoing.

Lawyers strike me as a particularly pedantic crowd (similar to programmers) and I would suppose if pressed about such tokens they'd say "this is a grey area because there's no precedent here yet." But AFAICT intent trumps everything else. If you make a new contract that's not called a contract but smells like a contract and get everyone to agree to it but not write their signature on paper, you have not dodged responsibility.

OTOH regulators like SEC might balk and throw their hands up at things like this and claim that they're not securities or that it's out of their scope. But district attorneys, attorneys general -- they probably wouldn't back down from a case like this if it happened to constituents that they think are important enough to stand up for.

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

#179

Post by TylerE »

claudiulodro wrote: post #112

All the people crying "Scam!", I have a question for you: How is this fundamentally different than pre-orders? It seems to me like these ICOs are selling future access to some software that hasn't been built yet. Game companies sell pre-orders to the public all the time to finance the development of the software. (I don't have any money in cryptocurrencies, but the ICO seems like a good way to fund a seed round for c…

The vast majority have no existing implementation of what they claim to do, if they even STATE what they aim to do.

It's like pre-ordering a game where they don't tell you the genre, won't tell you what platforms it runs on, and don't have any concept art drawn.

Oh, and the fine print says they make no promises to actually make a game, and if they do, they don't have to give you a copy.

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

#180

Post by calafrax »

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…

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 exit your position.

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