81% of Recent ICOs Were Scams, Research Finds (bleepingcomputer.com) 81
Four out of five initial coin offerings (ICOs) that have taken place in the last year have been classified as scams, according to a recent study by Satis Group, an ICO advisory firm. From a report: ICOs have been the rage of the cryptocurrency world because they allow companies to raise money for various ventures by issuing cryptocurrency tokens that users could buy and later trade on cryptocurrency exchanges. The concept is similar to an IPO, but instead of shares, companies issue tokens, and some companies promised to buy tokens back from users after a product became successful and the token's value increases.
The study's results don't bode well for people who've invested in one or more and are expecting profits sometime in the near future. The Satis study organized ICOs in six categories, based on their current status. Only ICOs with a market cap of $50 million or higher have been included in the results, and the percentage of scammy ICOs would have probably bee higher if researchers looked at the smaller ICOs. According to researchers, 81% of ICO's were Scams, 6% were classified as Failed, 5% had Gone Dead, and 8% went on to trade on a exchange.
The study's results don't bode well for people who've invested in one or more and are expecting profits sometime in the near future. The Satis study organized ICOs in six categories, based on their current status. Only ICOs with a market cap of $50 million or higher have been included in the results, and the percentage of scammy ICOs would have probably bee higher if researchers looked at the smaller ICOs. According to researchers, 81% of ICO's were Scams, 6% were classified as Failed, 5% had Gone Dead, and 8% went on to trade on a exchange.
Best Nelson voice .... (Score:3, Insightful)
Ha ha!
A fool and his money are parted, especially when that fool wants to play in unregulated financial markets.
Don't tell us you didn't see this one coming.
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free money? where do I sign?
Venezuela. The problem is somebody has to make something before you can buy it, otherwise inflation cancels out the free money.
Re:Best Nelson voice .... (Score:5, Insightful)
Yep.
I can't believe anybody on the planet could read "Initial Coin Offering" and not think "Bunch of guys who want to get rich by selling made-up-shit to idiots".
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BITCONNEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEECT
https://www.youtube.com/watch?v=61i2iDz7u04
This one is so fresh it still has shill vids posted on youtube.
https://www.youtube.com/watch?v=Gu126dXUSh4
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Yep.
I can't believe anybody on the planet could read "Initial Coin Offering" and not think "Bunch of guys who want to get rich by selling made-up-shit to idiots".
Who's to say they didn't think that?
You can make a lot of money investing in a scam as long as you get out before it collapses.
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Except you're not getting in at the top level with a pre-mined ICO...
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Given that 92% of the ICO didn't even follow through far enough to actually make it to public - I'd say even "just get out before it collapses" is wishful thinking.
You'll pretty much has to be the founder and tiny handful of people working around him to have a high success chance. I bet even some of the late-coming employees will get their fingers burned when they got taken by the hype surrounding them, and judgements are easily clouded by sheer time in the office and fatigue of working 15 hour days.
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I suspect it's a phenomenon similar to the Cow Clicker effect [wired.com], where people just want in because it feels good.
And the other 19% of ICOs were hoodwinks (Score:3)
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What a coincidence, "ShenaniCoin" is my new startup. ("SuckerCoin" was taken.)
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What about "Morono" as coin-name?
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Isn't there a Book of Morono?
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That is a great one!
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Those were not coins, they were tokens. They don't need to be mined or anything, they're just made up.
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Simply untrue, but hey, you+'re welcome to continue believing nonsense.
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WTF. They are not created in similar manners.
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The initial motivation is for a mechanism for transferring value between two parties, without requiring a central entity to mediate the exchange.
We can do this in the real world by handing cash from one party to the second.
Cryptocurrencies allow us to do this over the internet. The problem at the moment is that they do not allow us to do this *well*.
I'm shocked, I tell you, shocked! (Score:5, Insightful)
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https://en.wikipedia.org/wiki/... [wikipedia.org]
It's hard out hear for a blockchain dev (Score:1, Interesting)
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Keep dreaming buddy!
81%... (Score:2)
... so far.
19% to go.
Only 81%? (Score:5, Insightful)
Although according to the summary the number is closer to 8%.
Re:Only 81%? (Score:5, Insightful)
81% of ICO's were Scams, 6% were classified as Failed Scams, 5% as Scams Gone Dead, and 8% went on to trade on a exchange
So it's more like 92%. And I'm not so sure about the remaining 8% either.
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So, 92% are scams that have reached their conclusion. The other 8% are scams that are still ongoing.
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That is not scams, as much as scams in the terms of reference. So not that make believe money with no backing is a scam but that there was no real intent to create make believe money with no backing, just charging for attempting to do so and keeping the money when failing. So just way more scammy, rather than not just plain scammy. In this case, scam is very much tied to the terms of reference, being able to create make believe money with no backing in the public market or even intending to attempt to do so
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I think this study just has a margin of error of 19%.
How many of the survivors are worth anything? (Score:2)
I'd be curious to see how much the surviving currencies are actually trading for, given how most cryptos that aren't Bitcoin or Ethereum trade for under a dollar, with many trading for a fraction of a penny per coin. I somehow doubt that any of the surviving coins have made money for anyone but their creators and those firms that will do pump and dumps on various cryptos and spread the news to their paying clients.
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I've been sitting on the sidelines and not bought in a single ICO, although there is the potential for some enormous opportunities --- Perhaps in 12-24 more months when the dust settles; people can start looking at the OLDER ICOs for ones that have some merit: and then very carefully vet the code that the ICOs represent to make sure there's an actual project with realistic expectations......
Hmm... (Score:5, Insightful)
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Libertarian paradise in our times! [see my signature!]
Corporate Cavemen [Re:Hmm...] (Score:1)
Their pursuit of a Mad-Max-esque (MME) world may be legitimate, from a certain angle. One cannot say that a MME world is objectively bad. It's a matter of preference.
A libertarian may reply and say, "I made an x-coin purchase choice and it didn't work out. Live and learn. If I die due to my bad decision, so what. The species overall will be stronger. Survival as a species is better than fluffy comfort in the short term. It's not about just me."
I consider many libertarians a hybrid between Kling
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An Ayn Randian and Libertarian are not necessarily the same thing.
Just gotta pick the good ones! (Score:3)
Personally, I pledge my faith in Dogecoin.
Re: Just gotta pick the good ones! (Score:3)
It's funny ... I got some dogecoin just as a laugh and forgot all about it. Given the hashing rate i expected it to be in a constant state of inflation, so I never expected to get my money back.
A year later I checked the price and it was selling for 10 times what I paid.
People are nuts. I cashed out and called it a win.
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I can tell crypto-currency is hurting (Score:2)
In other news... (Score:1)
Researchers unable to identify the scam in 19% of ICOs.
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Indeed.
Darlose Award (Score:1)
Is there a Darwin Award for big monetary loss?
This study has exactly 19% error (Score:2)
Obviously. Greed makes people blind.
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That too. It this case greed may make them even more blind to their own stupidity, or they may already be completely blind to it without the greed.
Re: This study has exactly 19% error (Score:1)
I don't get the math. Of 5 ICOs, 4 were scams, and that's 81%? Or does it mean one was only slightly scammy?