In the late 90s there were a lot of very premature IPOs and a lot of money raised for bad ideas, but very few of them were total cranks or scams. I could in fact buy pet food on pets.com-- it just wasn't a viable business and wasn't well executed. The CueCat was a horrible business idea but CueCats actually did exist and you could in fact use them. (I used to have one! Kept it for teh lulz.)
Most ICO projects are complete and utter vapor consisting of nothing more than a stock bootstrap web site and a "white paper" that could have been generated by a Markov chain model using crypto and decentralized systems buzzwords. A few have a bit of code online that doesn't work. Of those that have shipped most of them are unusable, and of those that are usable I am only aware of maybe one or two that are at all interesting. Of those none are very compelling and none are things I couldn't do without.
There are literally no hits in this space. It's all junk, and most of it is outright scams. I'd be surprised if a single current generation coin ever actually delivers real ROI.
It pains me to say it too. This stuff is very much in the "I want to believe" category for me. But I've gone through them and that's what I see. It's depressing.
We've discussed an ICO here at ZeroTier and I've consistently come up against it. There is so much fraud here I don't want to go near it even if there might be good use cases. A lot of capital is sloshing around but I have both ethical and pragmatic problems with participating in a system so absolutely rife with fraud. I also don't particularly want to deal with SEC investigations.
Cryptocurrency on the other hand is useful. We have used Bitcoin to pay overseas contributors for open source work and consulting. The function for which block chains have become most known is so far the most useful and real.
The only upside is this: I find it satisfying that the scammers are gaming the "serious math/CS papers must be written in TeX" heuristic by writing their buzzword salad white papers in LaTeX. I hate lazy prejudiced heuristics like that.
Even though many of the nineties startups lacked the skill or timing to execute it, the advantage of replacing catalogues or human agents already using computerised reservations systems with an always-available, easily-updated website was huge, obvious and real as was the size of the future online advertising market. So there was every reason to believe that some internet companies would eventually become huge. By contrast, many ICO startups boast no tangible advantage or difference over the existing congested and conventional markets they purport to serve except for a novel funding method which allows their investors to trade any oversight or traditional legal recourse against the company for a theoretically liquid market to dump the "coins" in if the founders don't even attempt to deliver...
Earlier in the year I began going through the list of alt-assets and ICOs. I appreciate how the lists of advisors (or whatever they are being called) are full of people with experience in completely irrelevant areas.
Cryptography is one of those areas where you really need to be good at what you do or your skills have a deeply negative value. To create some sort of cryptographic asset with a team devoid of cryptographers and people with deep software security experience is a joke.
If that does happen crypto will crash. The crash will bleed over into Bitcoin too because sheep.
In the long run it might be a good thing. Maybe ICOs will get re-invented as something more reputable. I know Naval Ravikant (AngelList) is involved in a project to create a reputable sort of ICO vehicle patterned after the SAFE and he has an excellent reputation. I feel bad for the people right now trying to do legitimate work in this space and having to compete with a bunch of obvious cranks and fakes.
Some don't even bother to do that. This is literally the white paper for one of the hottest cryptos out there right now :
This is the codebase :
The current net value of the entire circulation is about 3.7 billion, all of which was pre-"mined" and 50% of which is reserved by the creators.
There almost seems to be an inverse relationship between reality and funds raised. Here's one of the very few real ones:
They got nowhere near the funding, and most of it was conventional:
It's one of the few coin-backed distributed things that seems like it might be useful to the point that I may actually try it, and I've heard it actually does work.
Guess that's passe in these quarters.
This goes back to my original point that there is value in cryptocurrency and the technology behind it. It's just going through a period of explosive interest and growth, which in turn is causing the technology to get better rapidly.
The multimillionaire investors are going to be made over the next 3 years. The next google could come out of an ICO in 10, it's just a matter of the market correcting itself once the hype wears off.
The sad thing is that this is actually very cool technology and I bet there are real use cases out there that could benefit from them. But the ones I have seen are not it.
I wonder if Ethereum itself will also be punished when all these tokens come crashing down...