Topic: Why does every new tech require an ICO? Is it just the funding? (Read 1313 times)

I have been in 2 unsuccessful startups (not crypto related) one as a cofounder and the other as an employee.

Back then people asked us "why are you raising money from friends and family?"

Reasons of why startups are exploiting the ICO funding:

1) No Commitment: If you go broke you don't have to pay back to frnds and fam, as oppose to a loan.
(My philosophy: I only asked and accepted money from family and friends that were in a +good financial position, and after 2-3 years I gave back all the money that was left.)

2) It's Trending: Cryptocoins are hot right now, everyone want to invest in the "next" Bitcoin, and get that sweet 25% bonus as early investor.
What I have learn after being scammed*: if you have good: marketing, website, bitcointalk ANN, and a well redacted "smart" whitepaper you can raise money really fast.
(*I was scammed in Ascendacy's ICO, my first ICO investment, but thankfully got the majority of the money back thanks to someone from this forum.
NEVER INVEST IN AN ICO THAT: YOU DON'T SEE THE TEAM MEMBERS NAMES, FACES, AND THEIR LINKEDIN. And of course do at least a little on research on them)

3) FUNDING: People raise way more money than needed, it is faster and easier than pitching the idea to friends, family, investors, bank, going startup competitions, doing networking

4) You are your own boss: You don't have to give stocks and equity to investors (pieces of your company), you keep control of your company, and have the same share before and after the funding.

I have an announcement I am starting and ICO hahah if I only knew how to code... my programmer friends know anything about btc, not even buying some in coinbase

ICO's ruined crypto for me. XBY which isn't an ICO but has just as much new tech but aren't doing a money grab like IOTA type ICO it is reminding me what I loved about it all a few years ago. I fucking hate ICO's all the money goes to some assholes just out of University who move into a new office and get drunk and high on coke in local bars high fiving each other about how fucking smart they are and how dumb people are for giving them a million dollars for just cloning a shitcoin. I just can't bear looking at their smug faces on their websites and telling everyone they need $100,000 dollars a week just for costs....fuck them!!!



FUCK ICO's and FUCK THE WANKERS WHO DO THEM




The best way is the developers have a small premine for themselves maybe 1-3%. Then at least as Nassim Taleb says they actually have skin in the game and I don't degrade developers from getting rich IF they actually deliver to investors. I mean once an ICO has got a ton of money what motivation have they got to actually deliver anything? I'm getting angry now I got to stop typing...

In the words of Dire Straits, it's because, "Money for nothin' & yer chicks fo free."

But then people end up categorizing him a scammer anyways because of premine/dev funds. It is a bit of a lose/lose situation.


This is the main reason that I don't mind ICOs and premines. People need to be compensated for their time and effort. Otherwise, it would be a better idea to simply get a job. ICOs push blockchain technology forward at a more advanced rate by allowing developers to focus on development. We have seen some really neat things come from ICOs... Ethereum, Bitshares, Nxt, Waves, etc... all of which are innovative in their own ways.

You also touched on another important thing is that there is no "best" way to fund development. Someone will always complain. Even with PoW distributed coins... if the coin becomes big enough, people will eventually complain about centralized ASIC mining due to economies of scale. It is a lose/lose proposition. At the end of the day, no matter how a coin was released or distributed, it matters more that they deliver on their vision.

Its actually a way to get money but the way people have turned it into, they have bastardized the avenue that anyone who needs a quick buck can just exploit all he has to do is to have a nice package, graphics, functioning sites, escrows and some amount of money to run a large campaign and  boom the ICO is a success and they continue to have their way but its not their fault but those of us who buy into such leaving genuine projects out of the picture because such does not possses the financial wherewithal to promote such things to our awareness.

First of all, their blockchain is the Ethereum blockchain. ICOs are basically fundraising using Ethereum's smart contracts. They don't need to develop the Ethereum protocol because it is not their purpose.

Basically, the idea is you get tokenized shares where you get your future ETH dividends. Sometiimes, the token themselves are also used as coupons.

since ICO's are a relatively new concept and the industry being very young, everyone is trying to become and "pioneer" and gain "followers"

in a couple of years when the main players will have emerged as leaders, it will make less sense to run an ICO, unless you have to offer something new to the market

I hope so... not only that, but this is sizeable business without the freakish chains of banks and bank-bought regulation.

I agree with the bulk of you that equate ICO's with scams... but you have to admit that some amazing things are happening and really getting traction even if some are out and out scams, and if most of the others crash and burn for lack of insight, experience or plain old common sense.

I love the energy and the unconstrained volatility of it all. If I had just invested $10 in each ICO, I guarantee that in 10 years I would retire. Anyway, I am starting now to invest various amounts in every ICO that comes along.

I am waiting for "GiveAllEtherToMe Coin", yeah, I will throw $10 there too.

because they need money!!! lots and lots of money!!
they share those money to participants of their campaigns though so in a way they have some accomplice to scam users through the promise of certain profit.

nemgun, weren't you one of those people who once tried to have an ICO?

They want to "create" their own coin to scam people, in reality they don't need it at all, just a bitcoin address provided by an escrow and that's all. If they do ICO with home made coins, it is just to get the full controle over it, either to scam people and run with the money, or to scam them using different schemes, like Ponzy, Pyramid, MLM ...

I seriously advise people to consider twice before investing in a project who uses his own crypto.

There needs to be a new name for these companies. They are no longer altcoins but sizeable businesses with funding.

This is not Mickey Mouse industry anymore.

Are we witnessing the birth of Blocktech?

Wow, that was a lot of feedback! Thanks all.

I am a programmer myself and trying to get my head around it all.

There are some hilarious examples, like golos.io getting $5M to set up a forum... 0.o lol, wow!

On the other hand, if they actually pull off becoming one of the biggest social networks in the Russian speaking market, then that $5M will look like a drop in the bucket and create many happy investors...

As far as I can tell, they are well on their way.

So... you loose 7 for every 10, that's what the VC's say... but you hope to home-run 1 for every 20. That's the name of the game. Unless you are Elon Musk, then you home-run two out of three... heh.

ERC20 coins are so easy to create that it makes it super-simple to scam or collect funds quick and easy.

Hopefully the ERC20 coin fad will die and we will start to see some more dev on the Eth chain itself or we'll see more technology built on top of things.

Since everything is open-source, can't anyone just re-use the code anyways?

i think its easy to create one ICO to scam people if the dev is not serious with his project and like others said, with some graphical chart and some promise to their investor, the dev can reach as much as money that they can get from the investor. without investor, they can not doing anything and this is why they are make one serious project in the beginning and after they got the money, they run away with the investors money. but i think its not all the ICO like that and i am sure that there is still many ICO that have reputable dev and the team and the ICO can success in their journey.

Because they get no need to return few years high salary to work on project they dreamed off. Problem i see here is that they just jumped few important steps in their company growth and will latter on get them in troubles.
And what i mention are projects with something to offer. There are also not just some but many that dont bring almost nothing new and will never succeed. But there is so much capital right now ready to get in crypto that such "project" gets founded fast.

ethereum is an upward movement (a price pump if you will) and because it is backed by gigantic whales it is making a lot of noise these days. and it always takes time for people to catch on what is happening behind the scene. now when something like this is going one, everybody wants in. in most altcoin cases it is about forking the altcoin and making a similar coin and hyping it up to make profit, but in case of eth since it is offering a way to connect your shitcoin to their platform it is making things easier for "altcoin makers" to have an easier way of doing what they always do: make a new altcoin and P&D for profit!

also all these ICOs are bought with (surprise surprise) ethereum and that is creating a fake demand for ETH which is also causing the price of it go up in a fake manner. so it is a win win situation for both sides. and the main purpose of ICO is what i said "to make money from your shitty project"

ive also seen great devs struggling tough having no resources, i think both is needed, alot of effort from the devs and some backup from investors to get huge.

tough i agree the way icos are made is insane, they make 1 graphic collect MILLIONS and then dont answer for weeks and start to work slowly or not at all. thats pure greed and scam.

also the way they first collect money and then act like a standard company making all descicions alone is very wrong imo

Yes, ethereum will be a very good altcoin, I see ERC20's every month there are two tokens that appear , some dev is easier to use smartcontrac from ethereum because it is more flexsibel, making altcoin with code is very complicated, and need time-consuming research, ethereum read this opportunity so as to create token with ethereum, it is very helpful In some dev which is specialized to make contract work, ethereum project has good long-term development.

ICOs would actually be the perfect investment plans for blockchains, if they weren't so easily abusable. We are, after all, talking about an idea that wants to be decentralized in most manners, which, for me at least, includes staying away from single big entities. This rules out companies as money givers and begs for a system in which average joe can buy into the project.

But as stated, ICOs create huge problems. If the issuer has half a brain, it is close to impossible to prove malicious intent, because of plausible deniability: It's always possible to claim that you overestimated your abilities, the project was bigger than anticipated and so on.

Best practice would be to have a viable product to sell, instead of an ICO which is merely based on a lofty idea. However, I understand that most people can't work full-time for years on an idea which might at some point give them a decent return.

Other models, such as Zcashs developer shares are just as disliked by the community, but at least those give the developers incentive to keep the market value of their product high.

But blockchains aren't corporations. Important difference.