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October 06, 2014, 12:33:46 AM |
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IPOs came about during the time when dedicated scammers preferred premining their dozens of scamcoins. People caught on that premining was usually a scam, so the scammers began using a novel method whereby they created an IPO for their coin. Then they could (and can) just collect the money and leave. They don't even have to make a coin, really. Thankfully, the majority has gotten more skeptical about new coins. So now one of the numerous exchanges takes a cut of the action and the scammers are happy again. What also helps is that a significant amount of altcoin traders are willing to support coins that they know are scams as long as they're likely to make some BTC in it, and so exchange-facilitated IPOs are very popular.
Basically, it's an added layer of protection against the laziest scammers.
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