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The author might be missing the woods for the trees. ICO's are at heart a rethink on the angel-vc-ipo funding cycle. ICO's offer very clear advantages in terms of increasing distribution, decreasing friction, aligning investors to product success and builds upon emerging ideas around equity/control structuring.

That they offer a diversification of bitcoin is merely an oversight in the grand scheme of things.

The most important advantages to ICO issuers are: lack of transparency, reporting requirements, no dilution, no oversight, the ability to 'print coins' as they please. In other words, absolute power over the speculators that buy them.

I'm not sure if I want to be on the other end of that deal ...

This is mostly inaccurate, the code behind the token creation and distribution is public. And while it's technically possible, in practice most token contracts do not give the creators the ability to mint to tokens on a whim.

Yes, 'technologically', sure.

However, as we see with stocks, there's nothing stopping an entity from doing whatever they please in the end.

Like issuing a second set of coins, at par or equal value to the 'current coins'. Possibly requiring that the first tranche be redeemed for the second.

Or whatever shenanigans they want.

With the Kik ICO, they've kept a huge flood of coins to do with as they please. And they will in fact do whatever they please with them.

For these 'company managed' coins, I think they serve as a de-facto 'central bank'. They'll find a way to change the rules if they choose to.

Your connection between developers keeping a large portion of the coins, and being able to "change the rules" doesn't make any sense. Developers keeping coins is actually very positive, and if I were to buy into an ICO, I would greatly prefer this. Otherwise the developers have no incentive to keep working hard and meeting milestones, since they already have more cash than they would be able to increase the value of their holdings by.

The coins are worthless.

And the companies can make them more worthless at any time by changing the rules. Which they will, if they can get away with it.

Given the way that they seem to crash in sync, it would appear that they offer very little in the way of diversification.

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