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81% of Recent ICOs Were Scams, Research Finds (bleepingcomputer.com)
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.
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.
With a margin of error +/- 5% shenanigans.
-Creates ICO with 2 million coins
-Sells one coin to myself for $10
-Claims $20MM market cap
I actually think cryptocurrency _can_ solve some real issues, and I don't believe the zero value proposition. But I'm also think that when you sell some sort of pre-mined coins to fund your "operations", that's just a scam, even if you don't think it is.
Pre-mining, and selling the coins before you even open up the network to outsiders is an unfair advantage. Perhaps these people think they have good intentions, but the fact that they've taken a portion of the coins purely for themselves is a HUGE conflict of interest.
IPOs are tightly regulated by the SEC for many years. ICOs are scarcely regulated and are the current "hot thing" for speculators. Is anybody truly surprised by this? Of course ICOs will bring out scammers who prey on people hungry for "the next Bitcoin." This is to be as expected as flies drawn to a steaming pile of dung.
As somebody working on what I imagine will be an upending blockchain solution, it's rather disappointing to have to deal with this. People either think every solution is going to be a scam, when sometimes the problem is the investor is overvaluing them. When things settle down and the industry regulates itself (or SEC forces the issue), ICO's will be the new Silicon Valley for VC's.
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... so far.
19% to go.
Log in or piss off.
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You mean 19% of them WEREN'T scams? That's the really AMAZING part!
but read it as Immense Creimer Object and did a double take!
In shocking news today apparently 19% of ICOs are not scams. Economists interviewed about this story are at a loss to explain the situation.
Although according to the summary the number is closer to 8%.
I read the internet for the articles.
If so-called cryptocurrencies are really good innovation, why they attract so many criminals/criminal activity?
Could it really be because, all cryptocurrencies themselves are scams, and that is why they attract all kinds of criminals/criminal activity?
If so-called cryptocurrencies are really currency, why no company/store can use Bitcoin as currency anymore?
Because the price of Bitcoin proved to be extremely unstable to use as a currency?
Would the result be different, if Bitcoin replaced by any other "cryptocurrency"?
Aren't all work the same way?
Or, they are not actually virtual currency but virtual investment?
But, if they are actually investment, why we need/want them?
What would happen to world economy, if people invested in virtual investments, instead of real investments?
Or, all so-called cryptocurrencies are actually just a modified (made decentralized and paying variable interest) Ponzi Schemes?
(Price of cryptocurrencies would keep increasing in the long term (by their design), so it is equivalent of paying variable interest to all long term investors.)
As more and more people invest in cryptocurrencies, it will become harder and harder to ban their trading everywhere!
All cryptocurrencies need to be banned globally before it is too late!
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.
by sucking my dick.
Looks like some libertarians had a taste of a true free market, unhindered by the burden of overbearing government regulation...
There are a lot of idiot investors out there that jumped on the ship way late, and sent the thing sailing into high price points that are way to high way too early, or is it?
But it crashed!
But its not dead.
It didn't crash because its dying, it crashed because it got hyper inflated by late and poorly informed investors.
How many millionaires do I know? I did not know the answer of this until last fall, when suddenly people I didn't even know knew who I was and also knew that I knew about bitcoin, and they wanted to invest.
A farmer, an industrial capitalist, an Italian food restaurant chain owner, a burger chain owner, a tug boat company executive, on and on and on. They wanted some bitcoin, they didn't ask what the price was today, they wanted to know what it would be tomorrow if it did the same thing it did yesterday.
And I told them all, its gonna crash.
And it will crash again.
But it wont die.
So the moral of the story is, invest wisely.
And yes the SEC should be involved, there are scams out there.
The farmer went with a program for 16000$ against all good advice because he was promised quadruple returns in 3 years. Its still only been 8-10 months, maybe he will see quadruple in 2 more years.
The SEC needs to be involved because whomever told him he would get quadrupled returns in 3 years did not also tell him that he may lose everything, and get a signature waiving liability from the investor if something out of the counsels control went wrong.
I'd wager that if the farmer guy I know had to agree to that, he maybe wouldn't have invested, and he definitely would not be as panic'y as he is right now stressing out over it, because he knew and agreed to that going in.
Scale that wager, and bitcoin might not have ballooned.
By the way, have you guys heard about that new Facebook IPO? Should I buy in now?
Personally, I pledge my faith in Dogecoin.
There is no such thing as a profit-making scheme that is not a scam by its very definition.
I mean it isn't called /earnings/ for a reason!
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If you loosen the definition of scams just slightly, the rest of the ICOs were also scams.
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because I can get a GTX 1060 6gb for only $120 more than I paid a year ago. I suspect the prices'll go back to normal soon. There's outfits out of China working on ASICs that can do Ethereum.
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Researchers unable to identify the scam in 19% of ICOs.
Those were not coins, they were tokens. They don't need to be mined or anything, they're just made up.
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
Is there a Darwin Award for big monetary loss?
Table-ized A.I.
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 Klingons and Ferengis.
Table-ized A.I.
please explain one "real" issue that cryptocurrency addresses?
The Chinese caught on to it pretty quickly and banned them. Other countries eventually followed suite.
Who's laughing now, the Chinese people who were blocked or the free market Americans pointing at them laughing and yelling freedom while getting scammed left and right.
Those were not coins, they were tokens. They don't need to be mined or anything, they're just made up.
and? none of the crypto coins are coins and they are ALL JUST MADE UP.
Simply untrue, but hey, you+'re welcome to continue believing nonsense.
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
Obviously. Greed makes people blind.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
From a speculator's perspective they are identical. It does not matter if the mining is done by the company releasing the coin or by 3rd parties, they are still created and traded in similar manners.
WTF. They are not created in similar manners.
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
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*.
"Go to CNN [for a] spell-checked, fact-checked summary" -- CmdrTaco