
NYT reporter: “81% ICOs were scams” - fluxic
https://twitter.com/nathanielpopper/status/978323730551078912
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danso
To be clear, it's a NYT reporter tweeting the findings found in this blog post
by the Satis Group -- not necessarily tweeting this as something that he would
himself publish in the NYT under his byline: [https://medium.com/satis-
group/ico-quality-development-tradi...](https://medium.com/satis-group/ico-
quality-development-trading-e4fef28df04f)

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chadbennett
From the author of the tweet, "since tweeting this, i've heard that
@ccatalini's team at MIT has looked into ICOs and gotten very different
numbers: somewhere between 5 and 25% of ICOs are frauds. He hasn't published
his full research, but will be interesting to see what accounts for the
difference."

~~~
debt
“somewhere between 5 and 25% of ICOs are frauds.”

IPOs have a 0% fraud rate historically. Maybe ICO needs to be renamed so as
not to be confused with IPO.

~~~
rajacombinator
Is this meant to be sarcasm? There are tons of fraudulent publicly listed
companies.

~~~
zaarn
I think there is a difference between "IPO is fraud/scam" and "the company
behind the IPO is fraud/scam".

Most ICO's I've looked at haven't produced anything but fancy blog posts (and
in some cases, the DNS registration has expired). I think I've invested into 2
or 3 (didn't invest much, 10 or 50$ at most so it didn't hurt much and I
stopped by now).

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ddorian43
Seems low tbh.

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cx1000
I think they mistyped "100" as "81"

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Consultant32452
Maybe it's hex. 129% of ICOs are fraudulent.

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Cogito
If it was a hex percentage it would still be 81/100, or in decimal 129/256 =
50.39%

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bringtheaction
Would rather store percentages in single bytes, so let 0xFF / 0xFF = 100%.

0x81 / 0xFF = 129 / 255 ~= 50.59%

~~~
Cogito
Makes a lot of sense, but maybe a slightly longer bow to draw given that we
would never us xx/99 as a percentage in decimal :)

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trophycase
8% going on to trade on an exchange seems extremely hard to believe. Assuming
most of them were ERC20, they could be traded on DEXs quite easily

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hendzen
I'd be interested to know the percentage weighted by USD notional amount
raised.

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duncan_bayne
I am actually surprised by that number, in that I expected it to be a lot
closer to 100%.

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sna1l
[https://twitter.com/nathanielpopper/status/97838862051082240...](https://twitter.com/nathanielpopper/status/978388620510822401)

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coldtea
I'd say 100%, but I'll take 81% too. Any ICO from a non-government entity is
very close to a scam by definition.

(Heck, money from government entities is close to a scam itself, but at least
it has better guarantees than "we're certain this crypto code is OK" and "a
18-year old implemented an Exchange in PHP from his parent's basement, you
should really trust your coins (and real money) there").

~~~
wellboy
Ethereum was also a scam, which would have given you 10,000,000% profit?

~~~
coldtea
Whether there would be profit in something or not, is hardly the criterion of
it being a scam.

In fact a lot of scams can be hugely profitable -- even ponzi schemes if
you're not at the lower layers.

~~~
wellboy
Yes, but a scam is knowingly screwing someone over.

Is it a scam when you invest in promising technology that, yes, could not work
out?

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coldtea
> _Yes, but a scam is knowingly screwing someone over._

Oh, most of those people do know -- or should know better.

> _Is it a scam when you invest in promising technology that, yes, could not
> work out?_

In "technology that might not work out" alone, no.

In "BS application of technology just because it's in fashion, with no
business content" yes.

~~~
wellboy
You're making the assumption that crypto will fail 100%, which is arguably not
a smart thing to say, because no one knows for sure.

Furthermore, Smart contracts are a business content.

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danidam
"statistics for 2018 show that of the 74 offerings completed so far this year,
around 76% will end up in the red." Are ICOs a fad or are they here to stay?
[https://www.investing.com/analysis/whats-behind-the-lower-
nu...](https://www.investing.com/analysis/whats-behind-the-lower-number-of-
icos-200299877)

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qedqfqef
And what percentage are actually going to deliver a useful product/protocol
that delivers significant value that justifies the investment?

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kirvyteo
"· Gone Dead (pre-trading): Succeeded to raise funding and completed the
process, however was not listed on exchanges for trading and has not had a
code contribution in Github on a rolling three-month basis from that point in
time."

I don't know ICO mechanics well but why is this a criteria? Can anyone
explain?

*Edit: I mean the code contribution in Github portion

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jgh
presumably an inactive repo suggests they arent spending the money on
development

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arisAlexis
counting random posts on bitcointalk that got money? im sure he discovered
internet recently

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dk8996
This seems like bs. I would look at ICOs that arent clear scams. Using
something like icodrops list.

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viraptor
You mean, you'd look at specifically the place which does some initial
filtering on submissions to count how many of them are scams? That's starting
with a biased sample. That's not how you get good statistics.

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rebuilder
I guess it's a question of who's asking. Practically anyone can whip up an
ICO, and there's a finanvial incentive to do o, so obviously the majority of
ICOs will be lousy offerings. Knowing how many in total are fraudulent is
interesting, but for most people the question is how many of the non-obvious
scams are still scams.

It's like if you analyzed every piece of fiction ever written and concluded
that nearly 100% of fiction is awful. That's probably true without any
prefilter, but most people will get their books from a curated selection of
some sort and will not find that conclusion very useful. Instead, they'll
likely conclude that just 90% of everything is crap. ;)

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jancsika
The obvious answer to a hungry reader to avoid bad fiction is to read the NYT
book review.

The answer to a hungry investor to avoid bad ICOs is to... ?

The obvious answer seems to me to be "avoid ICOs for the time being."

Is there really another obvious answer to that?

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kolinko
Just like with any other investment - unless you know the subject you plan to
invest in, simply don't. It's the same for stock exchanges, properties, and so
on.

Having said that, there appear sites like IcoDrops (for ICO), and Trivial.co
(for post-ICO) that help people make informed decisions.

~~~
jancsika
What is a sound decentralized app that was curated by IcoDrops where the app
depended on blockchain-based tokens and could potentially scale up to millions
of users based on that same blockchain?

Or that isn't possible, what's a decentralized app that is still valuable
technology which doesn't need to scale up like that?

