Half of ICOs Die Within Four Months After Token Sales Finalized (bloomberg.com) 101
An anonymous reader quotes a report from Bloomberg: About 56 percent of crypto startups that raise money through token sales die within four months of their initial coin offerings. That's the finding of a Boston College study that analyzed the intensity of tweets from the startups' Twitter accounts to infer signs of life. The researchers determined that only 44.2 percent of startups survive after 120 days from the end of their ICOs. The researchers, Hugo Benedetti and Leonard Kostovetsky, examined 2,390 ICOs that were completed before May.
Acquiring coins in an ICO and selling them on the first day is the safest investment strategy, Kostovetsky said in a phone interview. But many individual investors can't participate in ICOs, so this option isn't open to them. Still, all investors should probably sell their coins within the first six months, the study found. "What we find is that once you go beyond three months, at most six months, they don't outperform other cryptocurrencies," Kostovetsky said. "The strongest return is actually in the first month." The Boston College study also found that ICO returns are declining, as startups have becoming savvier about pricing coin offerings and more people have jumped into ICO investing. According to Bloomberg, "Returns of people who sold tokens on the first day they were listed on an exchange have been declining by four percentage points a month, Kostovetsky said."
Acquiring coins in an ICO and selling them on the first day is the safest investment strategy, Kostovetsky said in a phone interview. But many individual investors can't participate in ICOs, so this option isn't open to them. Still, all investors should probably sell their coins within the first six months, the study found. "What we find is that once you go beyond three months, at most six months, they don't outperform other cryptocurrencies," Kostovetsky said. "The strongest return is actually in the first month." The Boston College study also found that ICO returns are declining, as startups have becoming savvier about pricing coin offerings and more people have jumped into ICO investing. According to Bloomberg, "Returns of people who sold tokens on the first day they were listed on an exchange have been declining by four percentage points a month, Kostovetsky said."
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An ICO is a short lived event by definition. It's the cryptocurrency that will live a few months after.
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I don't think you understand what that acronym means.
die = decease in earnest.
There have long been too many Earnests in the world. I knew one and he was a total [REDACTED]!!!
LOL (Score:2)
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Daytraders and idiots.
The trick is to fleece the idiots, sociopathy helps.
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The goal is to get in early and out on time. It's pretty much like the stock market, you pick one company and hope it does better before you sell out at peak performance.
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The goal is to get in early and out on time. It's pretty much like the stock market, you pick one company and hope it does better before you sell out at peak performance.
That is pretty much also the definition of winning in a Ponzi scheme.
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Yes, that's true, the difference is how the gains are distributed. If the gains funnel to the top regardless of risk, it's a Ponzi scheme. If the gains funnel to a random single person or very small group, then it's a gamble, if the gains (rewards) and losses (risks) are equally distributed according to the funds they put in the "pot" then it's an investment.
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With half of them dying in 4 months, it's basically playing rouge or noir.
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Acquiring coins in an ICO and selling them on the first day is the safest investment strategy, ...
That's not investing. Speculating, maybe. More like gambling.
Investing is gambling.
Those who claim otherwise are trying to sell you a "sure thing", which only reinforces my point.
Re:Investment? (Score:4, Insightful)
No, investing isn't gambling, it's not black and white like that.
There's more of a scale. At one end you have "gambling" and at the other you have "investing". At the far gambling end of the spectrum you have games of chance (e.g. roulette), binary options (which is gambling dressed up to look like investing), slot machines etc - basically all the types of things where the house always win. At the other end you have things like bonds, traditional long term buy and hold in blue chip companies etc. There's still some risk but on that end of the spectrum, it's not a zero sum game nor "the house always wins".
If you say all investing is gambling because there's some risk and can never be a sure thing, then you get to the reductio ad absurdum argument that absolutely everything is gambling, e.g keeping your money in a savings account is also gambling because that's not a sure thing either.
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No you're not telling the truth.
The truth isn't the truth if you leave out things. Such as important details. In some cases the law has a word for that, Fraud.
There are no regulations for coin yet. So the fraudsters are out there. Pump & Dump, etc.
Just look at the youtube videos. You don't want bitcoin, buy Tron. It's about to take off! It might blip a little. If that went up to $20,000 a coin, that would be great.
In last year's bitcoin runup people were mortgaging their houses to buy bitcoin. My wife a
Re: Investment? (Score:2)
So, according to your definition BTC is not gambling since I keep winning year after year.
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No, investing isn't gambling, it's not black and white like that.
There's more of a scale. At one end you have "gambling" and at the other you have "investing". At the far gambling end of the spectrum you have games of chance (e.g. roulette), binary options (which is gambling dressed up to look like investing), slot machines etc - basically all the types of things where the house always win. At the other end you have things like bonds, traditional long term buy and hold in blue chip companies etc. There's still some risk but on that end of the spectrum, it's not a zero sum game nor "the house always wins".
As you have stated, there are levels of risk. Any level above zero would be considered gambling, because you're wagering on an uncertain outcome. You can use many terms to describe it, but at the end of the day it's still rather black and white as to you accepting a risk with the potential outcome of losing your entire investment.
And quite honestly, the "house" here would be considered Wall Street, and in the end they sure as hell aren't losing regardless of your performance or even your participation.
If you say all investing is gambling because there's some risk and can never be a sure thing, then you get to the reductio ad absurdum argument that absolutely everything is gambling, e.g keeping your money in a savings account is also gambling because that's not a sure thing either.
Yes
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If you could count cards in blackjack and achieve a 51% win rate mathematically would you consider that gambling or investing?
If you've removed all inherent risk of losing your capital, then it is an investment. That said, not too many investments are actual investments with zero risk. A savings account is not an investment vehicle; it's a method of insulating an investment to protect it.
As far as your scenario goes, you've manipulated the outcome to minimize the risk of losing everything, but at 51% it's still going to take you quite a long time for the game of chance to come up in your favor enough to call it an investment. T
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As you have stated, there are levels of risk. Any level above zero would be considered gambling, because you're wagering on an uncertain outcome. You can use many terms to describe it, but at the end of the day it's still rather black and white as to you accepting a risk with the potential outcome of losing your entire investment.
under that definition everything in life is gambling and the word investment doesn't exist. Even putting your money in a bank account or under your mattress is just gambling.
With investments their is NOT always a winner and loser, both sides of the transaction can win, so no you are not playing against the house. investment is a weighted risk where the return outweighs the risk, gambling is hoping to get lucky and beat the odds/house.
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Investing is not gambling, it is choosing to not spend money today in order to increase productivity (and spending ability) tomorrow. Speculation isn't even gambling - that involves transferring an existing risk to someone more capable of managing it (think farmers locking in the price of their crops, through investors purchasing commodity futures). Gambling is about creating financial risk out of thin air. No one actually stands to lose anything based on the order in which a bunch or horses cross a line (except maybe the time wasted watching said horses), nonetheless they choose to create financial risk for themselves by betting on which horse will cross first.
By these definitions, I would classify ICOs as gambling - you are betting on the possibility that there are still greater fools in line behind you.
Gambling is simply defined as an activity that involves wagering on an uncertain outcome. You can try and use many terms to describe the various levels of risk, but unless you reduce the risk down to zero and remove the possible outcome of losing your investment, it's called gambling.
Nothing you have described above changes the fact that investing is gambling. It all still involves an element of chance. There's a chance you could win, and there's a chance you could lose. That pretty much describes Las
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You seem to be very determined to convince us that anything with an uncertain outcome is gambling. The problem is that everything has some element of risk. I could wake up tomorrow morning, slip on the tub and hit my head on the edge of the sink. So is it a gamble to get up in the morning? Where do we draw the line?
The definitions of gambling that I see include terms like "high risk" and "games of chance". If everything is gambling then the term looses all meaning.
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You seem to be very determined to convince us that anything with an uncertain outcome is gambling. The problem is that everything has some element of risk. I could wake up tomorrow morning, slip on the tub and hit my head on the edge of the sink. So is it a gamble to get up in the morning? Where do we draw the line?
Uh, you draw the line around this particular topic of financial investments, which is what we're discussing. Yes, everything in life is essentially a gamble, but let's keep the lines drawn where they logically should be. I've not escaped that logical border when I define any financial investment that involves risk as gambling, because it is. There is a chance that you could lose your entire financial investment. If you can afford to do that, then go for it. Gamble away. Take risks. If you can't affor
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You seem to be very determined to convince us that anything with an uncertain outcome is gambling.
I think almost everybody else agrees on the meaning of the words, and they acknowledge that every time you get out of bed you're gambling that it is worth the risks involved, like slipping in the bath.
Where you're expected to draw the line is based on the context of the sentence; if the context is investing, then you should probably be advised that investors casually use the word "gambling" to describe investments with unacceptable risk, but also that certainty is inversely proportionate to rewards, and hig
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Acquiring coins in an ICO and selling them on the first day is the safest investment strategy, ...
That's not investing. Speculating, maybe. More like gambling.
Investing is gambling.
Those who claim otherwise are trying to sell you a "sure thing", which only reinforces my point.
If you are sensible and have a reasonably large amount of money to start with (so you can think long term and live off your existing money in the short term) then investing is the exact opposite of gambling. Except in the short term, rich people get richer with no risk. All they have to do is not be greedy.
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That's not investing. Speculating, maybe. More like gambling.
That's positively derptastic.
Did you know that "speculative" is literally[sic] one of the enumerated risk levels in investing?
Looking back at this time will be interesting. (Score:3)
It seems like whenever there's an economic expansion of any kind, people are desperate to put their money in anything regardless of the chance of success. This particular time will be very interesting to look back on, because you basically have multiple different bubbles all going on at the same time and they all feed on each other. I feel old, but I really don't see cryptocurrency as anything more than a scam.
The mobile/app economy bubble is fed by the cloud bubble, which both feed the blockchain/cryptocurrency bubble, and all of them are sustained by The Cloud. Back in the 90s, if you wanted to sell bags of dogfood online and ship them for free to get eyeballs, getting started cost tons of money. You had to buy servers, colocate them in a data center, etc. and it cost millions to start up. Now, all you have to do is use the founder's credit card to buy AWS/Azure/GCP time and the money comes out much more slowly. This is why I think the bubble(s) are going to last a lot longer than the last one...there's way less pressure to IPO and topple the house of cards. Most of unicorn startups are being happily fed money by VCs rather than Grandma's pension fund buying into pets.com, and they need less every month.
My worry is that allowing these bubbles to live longer than they should will make them huge and cause an even bigger mess when everything comes crashing in. Look at Silicon Valley housing markets as an example. I live near NYC, so I'm not one to point fingers at crazy housing prices. But if i wanted to move there for a job, a similar house to mine, a similar distance to work would be 4 or 5 times the price of my already-expensive one here in suburban NY. Yet, people are happily buying/renting so they can cash in on the gold rush...no thanks.
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Good point that the cost of getting started is much lower now, though.
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If you see bubbles everywhere, then you might want to recalibrate your vision. It's true there are a lot of useless startups (as always), but the difference between now and 1997 is revenue. It's not just a black hole that money goes into, there is money coming back out. Good point that the cost of getting started is much lower now, though.
All that revenue is coming from the big data and advertising bubbles. Those will eventually pop as well.
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No, the advertising bubble will not pop. That money has been coming in for a hundred years, and it will keep coming. As TV dies, more and more will come.
Advertising will always be there, but the idea that companies are worth millions or billions of dollars through monetizing their users (selling their data and their eyeballs) won't last. Eventually the curtain will get pulled back and reveal the sham that it really is. When was the last time anyone ever saw a relevant ad? The closest you get is when you buy something online then see adds everywhere online for that and similar products for the next week. Eventually the companies purchasing these ads will
Re:Looking back at this time will be interesting. (Score:4, Informative)
Eventually the companies purchasing these ads will realize that this is all wasted money and the algorithms don't work.
No, I can see you've never worked with advertisers. Advertisers are very data driven. They always want to know how well their advertising campaigns have worked, and how much sales they've gotten from their advertising. If something isn't working, they stop doing it quickly because that's money wasted.
tl;dr internet advertising works, that's why it is still here.
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Eventually the companies purchasing these ads will realize that this is all wasted money and the algorithms don't work.
No, I can see you've never worked with advertisers. Advertisers are very data driven. They always want to know how well their advertising campaigns have worked, and how much sales they've gotten from their advertising. If something isn't working, they stop doing it quickly because that's money wasted.
tl;dr internet advertising works, that's why it is still here.
I think the point being made isn't that internet advertising will cease to be relevant. Instead, that at some point, companies will start to look behind the curtain. They might like the deeper analytics that exists now vs. when they had little more than Nielsen ratings and newspaper circulation numbers to go on, but the question is whether advertising companies (e.g. Google and Facebook) can continue charging as much money as they are for the ads. All the analytics in the world won't justify the investments
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Eventually the companies purchasing these ads will realize that this is all wasted money and the algorithms don't work.
No, I can see you've never worked with advertisers. Advertisers are very data driven. They always want to know how well their advertising campaigns have worked, and how much sales they've gotten from their advertising. If something isn't working, they stop doing it quickly because that's money wasted.
tl;dr internet advertising works, that's why it is still here.
I think the point being made isn't that internet advertising will cease to be relevant. Instead, that at some point, companies will start to look behind the curtain. They might like the deeper analytics that exists now vs. when they had little more than Nielsen ratings and newspaper circulation numbers to go on, but the question is whether advertising companies (e.g. Google and Facebook) can continue charging as much money as they are for the ads. All the analytics in the world won't justify the investments in online advertising if those ads don't ultimately turn into increased revenue for the company buying them. Once enough companies fail to get a good ROI on internet ads, it doesn't mean they won't continue to buy them, it means they won't be willing to pay as much for them. You are correct that internet advertising isn't going away, but the multibillion dollar valuation of Google and Facebook is subject to whether or not their revenue is sustained...and unlike Microsoft who still sells licenses to Windows and SQL Server, or Amazon who can stop all advertising tomorrow and still be sustainable by selling books and diapers and computing time, Google can't sustain itself very long by selling G-Suite, and Facebook doesn't even have something like that to fall back on.
tl;dr: ads won't go away, but the companies whose balance sheets fail with ad revenue being cut in half are going to be in trouble.
Well said. And don't forget, the job of advertisers is to sell people things they don't want and/or need. And the thing they have to sell above all else is themselves.
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All the analytics in the world won't justify the investments in online advertising if those ads don't ultimately turn into increased revenue for the company buying them. Once enough companies fail to get a good ROI on internet ads
Advertisers are always checking to make sure they get a good ROI. It's not something they will start doing, it's something they have been doing for decades. The answer is they do get a good ROI. So that's it. Advertisers pay a lot for ads because it works.
And I say that as someone who wishes advertising would go away: it is the bane of the internet.
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A hundred years ago most business people still thought that advertising meant informing potential customers about the availability of an offering, though.
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Unfortunately, there are extreme bubbles elsewhere in the economy, and eventually, we are going to have another debt caused liquidity crisis. Google the everything bubble. Our debt levels are significantly higher than they were during the crisis in 2007-2009. Corporations have 50% more debt than 10 years ago when we were told that certain businesses were 'too big to fail', largely from taking on additional debt to buy stock to drive up the stock price. The federal debt has tripled.
The low mortgage rates hav
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I don't know how they can claim that the $3.5 trillion saved the market, but that withdrawing an even larger amount now will be done without causing the next crisis.
Maybe you should find out before predicting the future. It's not like the fed has kept the answers a secret, you could go find out if you weren't so busy with your conspiracy theories.
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Honest, things have not so different [imgur.com] since the invention of banking.
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It seems like whenever there's an economic expansion of any kind, people are desperate to put their money in anything regardless of the chance of success. This particular time will be very interesting to look back on, because you basically have multiple different bubbles all going on at the same time and they all feed on each other. I feel old, but I really don't see cryptocurrency as anything more than a scam.
Bubbles are what you get when you have too many investment dollars chasing too few good investment opportunities. It's a sign that the economic system is tilted too much in favor of capital vs. labor. .
Scam vs. Life Expectancy. (Score:3)
"About 56 percent of crypto startups that raise money through token sales die within four months of their initial coin offerings."
Yeah, and 80 - 90% of start-ups die within the first 12 months, which leaves the obvious question; Are ICOs nothing more than scams, or is a four-month death essentially expected in this particular type of business?
Perhaps it's a bit early to really tell, but it's rather ironic that ICOs seem to have a success rate on par with damn near any other type of start-up (if not better), and yet we're questioning that activity worse than Al Capones tax auditor. All forms of investing are gambling at the end of the day.
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If success means solving a problem, filling a need, or replacing an obsolete solution, then no crypto currency is yet successful.
You don't feel crypto currency fills a need for secure anonymous transactions? I would question why any government is still printing cash then.
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In my country cash transactions are not anonymous, the seller is legally required to provide a receipt, and to disclose either their legal name, the name of the legal entity they are representing, or a registered business name.
Also, cryptocurriencies don't offer anonymity; all transactions are recorded for posterity! Just because the people most in need of short-term monetary transfer are conducting illegal activities, and illegal activities benefit from anonymity, that doesn't tell you that cryptocurrencie
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You don't feel crypto currency fills a need for secure anonymous transactions?
No. Especially when cryptocurrency users can be deanonymized.
I would question why any government is still printing cash then.
Cash is only "anonymous" if you ignore the fact that you are being monitored on video at most businesses when you use it. Also, governments have never printed cash because they wanted to provide anonymity b
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These aren't new businesses or business models. They bring nothing to the table, have no value proposition. They only exist to fuel speculation. Most startups at least try to do something. An additional coin is just something to throw money at and lose.
wow (Score:2)
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You can still easily get something like Reddcoin simply by running a wallet on your computer. It's not proof-of-work so it won't tax your CPU at all.
Reddcoins aren't worth much now, but like Bitcoin maybe you'll regret not mining for Reddcoins ten years from now.
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Reddcoin is positioning itself as the social media currency. If they are successful, its value will easily go up. Probably not $1000 per coin, but $1 to $5 is not impossible.
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Reddcoin is positioning itself as the social media currency.
I don't even know what that means.
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They're working on making their wallets, APIs and everything easy to connect and use, for Facebook, Twitter, etc. If they succeed in getting people on board, Reddcoin will essentially become the true "Internet money" used for micro-transactions.
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It might be that the system of finding that stock ends up having a higher average cost than just throwing a dart at a dartboard.
Picturing a get-rich-quick stock is exactly the same mental process as dreaming about winning the lottery. And as with the lottery, there are people trying to invent systems to predict things better than anybody else, even though if they succeeded the system would be altered to prevent its utility!
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It might be that the system of finding that stock ends up having a higher average cost than just throwing a dart at a dartboard.
That might be true. Clearly there are systems that work, otherwise high-speed trading wouldn't be so profitable.
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I wonder how many coins were generated back in 2010 by students on university servers (with the universities getting no cut). Of course back then the coins were considered next to worthless so maybe it was not a great loss to the universities - just some extra power expenses.
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I was first reading up on bitcoin when it's value was in the pennies. I thought it was stupid then. Do I regret no mining it back then? After all I'd be a millionaire (if not billionair) now, right? Absolutely not. It wouldn't have got that far. I might have mined a few hundred coins, who knows. But then I probably would have lost my key some point along the line. If I didn't lose my key, it probably would've been because I decided a well known, trusted, and reliable place like Mt Gox was the safest way to
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That's what I would have done: I would have sold some of my bitcoins to guarantee a profit, and kept some of them to take advantage if the price continued to go up.
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I regret it whenever a maladaptive thought pops into my head like, "gosh I wish I had mined bitcoins in 2010!"
It happens to everybody. When it happens to me, I try to replace the thought with two others: The legit opportunity I missed was not cashing in on COBOL programming during Y2K. That one I saw coming, it was clearly real, and I decided to do "real work" instead.
The other thought is, most of blockchain's utility is not in cryptocoins, and the future of digital currency is also probably not in cryptoco
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The other thought is, most of blockchain's utility is not in cryptocoins, and the future of digital currency is also probably not in cryptocoins. There is still a giant green field, with real use cases that are yet unserved
I haven't seen a single other usecase, though.
Blockchain is basically a slow database to be used when you don't trust anybody to keep the database. That sort of use case isn't very common.
So, they're just like any other Tech IPO (Score:1)
So they're just like almost any other Tech IPO - sell while the FOMO is strong.
Crypto-sporidium (Score:1)
they take this long??? (Score:2)
Let me explain this (Score:2)