Why does every new tech require an ICO? Is it just the funding?

[SealTx]

It seems that there is about 1 new ICO (mainly ERC20's on Ethereum) every week. How is it possible that each of these tech's needs its own coin and blockchain? Why don't they just develop on Ethereum?

Is it solely to get the venture capital?

[bathrobehero]

It seems that there is about 1 new ICO (mainly ERC20's on Ethereum) every week. How is it possible that each of these tech's needs its own coin and blockchain? Why don't they just develop on Ethereum?

Is it solely to get the venture capital?

Because it's an easy way to scam people; a couple of nice graphs and some promises and that seems to be enough for some people to send money to an anon dude without any guarantees...

If a coin is great, the dev should invest in it himself or gather the funds/backers outside of the coin's supply imo.

[ttookk]

It's easy money. Even if you don't intend to scam people, you can still set some lofty goals, collect money and if you don't achieve them, shrug shoulders and move on.

Sure, people will be mad at you, but it is within the realm of plausible deniability: you tried your best, but, sadly, your goals were set too high/the dev left/the funds were not sufficient/and so on.

Plus, it solves the coin distribution question. Projects, that do not have a mining phase need to find a fair way to distribute their tokens.

But to that regard; I recently thought about the idea of "Proof of Donation", where a project lead may ask people to donate funds not to them, but to an organisations (like greenpeace, doctors without borders or whatever) and give them tokens in return.

[tiggytomb]

Exactly, one of the main reasons is to make a quick buck.  That may sound sceptical but being around here for a while I have seen this change from honest devs some which would give out coins for free, they would work on their project freely and without the urgency to put a roadmap in place etc.to now almost every project requires an ICO.

If a project is worth something then the dev/s would be investing themselves into it, there are some legitimate ones but nine times out of ten ICO coins are are created for the dev to pocket.

[Starkz]

They seem to want one huge lump sum after 24 hours or 1 month.
Real tech can present themselves to VC firms and get critical feedback on their business proposition to find out if they are the real deal or just another group looking for money. Firms can inject initial startup money and dev ICO can then present beta tech and start funding for huge stacks of currency from individual investors. I think going the ico route shows the attitude of get rich quick by luring investors with promise and not having actual tech to show for it

[cryptonia]

They seem to want one huge lump sum after 24 hours or 1 month.
Real tech can present themselves to VC firms and get critical feedback on their business proposition to find out if they are the real deal or just another group looking for money. Firms can inject initial startup money and dev ICO can then present beta tech and start funding for huge stacks of currency from individual investors. I think going the ico route shows the attitude of get rich quick by luring investors with promise and not having actual tech to show for it

But blockchains aren't corporations. Important difference.

[ttookk]

ICOs would actually be the perfect investment plans for blockchains, if they weren't so easily abusable. We are, after all, talking about an idea that wants to be decentralized in most manners, which, for me at least, includes staying away from single big entities. This rules out companies as money givers and begs for a system in which average joe can buy into the project.

But as stated, ICOs create huge problems. If the issuer has half a brain, it is close to impossible to prove malicious intent, because of plausible deniability: It's always possible to claim that you overestimated your abilities, the project was bigger than anticipated and so on.

Best practice would be to have a viable product to sell, instead of an ICO which is merely based on a lofty idea. However, I understand that most people can't work full-time for years on an idea which might at some point give them a decent return.

Other models, such as Zcashs developer shares are just as disliked by the community, but at least those give the developers incentive to keep the market value of their product high.

[Chikito]

Yes, ethereum will be a very good altcoin, I see ERC20's every month there are two tokens that appear , some dev is easier to use smartcontrac from ethereum because it is more flexsibel, making altcoin with code is very complicated, and need time-consuming research, ethereum read this opportunity so as to create token with ethereum, it is very helpful In some dev which is specialized to make contract work, ethereum project has good long-term development.

[tehMoonwalker]

Exactly, one of the main reasons is to make a quick buck.  That may sound sceptical but being around here for a while I have seen this change from honest devs some which would give out coins for free, they would work on their project freely and without the urgency to put a roadmap in place etc.to now almost every project requires an ICO.

If a project is worth something then the dev/s would be investing themselves into it, there are some legitimate ones but nine times out of ten ICO coins are are created for the dev to pocket.

ive also seen great devs struggling tough having no resources, i think both is needed, alot of effort from the devs and some backup from investors to get huge.

tough i agree the way icos are made is insane, they make 1 graphic collect MILLIONS and then dont answer for weeks and start to work slowly or not at all. thats pure greed and scam.

also the way they first collect money and then act like a standard company making all descicions alone is very wrong imo

[Herbert2020]

ethereum is an upward movement (a price pump if you will) and because it is backed by gigantic whales it is making a lot of noise these days. and it always takes time for people to catch on what is happening behind the scene. now when something like this is going one, everybody wants in. in most altcoin cases it is about forking the altcoin and making a similar coin and hyping it up to make profit, but in case of eth since it is offering a way to connect your shitcoin to their platform it is making things easier for "altcoin makers" to have an easier way of doing what they always do: make a new altcoin and P&D for profit!

also all these ICOs are bought with (surprise surprise) ethereum and that is creating a fake demand for ETH which is also causing the price of it go up in a fake manner. so it is a win win situation for both sides. and the main purpose of ICO is what i said "to make money from your shitty project"

[Febo]

It seems that there is about 1 new ICO (mainly ERC20's on Ethereum) every week. How is it possible that each of these tech's needs its own coin and blockchain? Why don't they just develop on Ethereum?

Is it solely to get the venture capital?

Because they get no need to return few years high salary to work on project they dreamed off. Problem i see here is that they just jumped few important steps in their company growth and will latter on get them in troubles.
And what i mention are projects with something to offer. There are also not just some but many that dont bring almost nothing new and will never succeed. But there is so much capital right now ready to get in crypto that such "project" gets founded fast.

[traderethereum]

It seems that there is about 1 new ICO (mainly ERC20's on Ethereum) every week. How is it possible that each of these tech's needs its own coin and blockchain? Why don't they just develop on Ethereum?

Is it solely to get the venture capital?

i think its easy to create one ICO to scam people if the dev is not serious with his project and like others said, with some graphical chart and some promise to their investor, the dev can reach as much as money that they can get from the investor. without investor, they can not doing anything and this is why they are make one serious project in the beginning and after they got the money, they run away with the investors money. but i think its not all the ICO like that and i am sure that there is still many ICO that have reputable dev and the team and the ICO can success in their journey.

[BitScrip]

ERC20 coins are so easy to create that it makes it super-simple to scam or collect funds quick and easy.

Hopefully the ERC20 coin fad will die and we will start to see some more dev on the Eth chain itself or we'll see more technology built on top of things.

Since everything is open-source, can't anyone just re-use the code anyways?

[SealTx]

Wow, that was a lot of feedback! Thanks all.

I am a programmer myself and trying to get my head around it all.

There are some hilarious examples, like golos.io getting $5M to set up a forum... 0.o lol, wow!

On the other hand, if they actually pull off becoming one of the biggest social networks in the Russian speaking market, then that $5M will look like a drop in the bucket and create many happy investors...

As far as I can tell, they are well on their way.

So... you loose 7 for every 10, that's what the VC's say... but you hope to home-run 1 for every 20. That's the name of the game. Unless you are Elon Musk, then you home-run two out of three... heh.

[btbrae]

There needs to be a new name for these companies. They are no longer altcoins but sizeable businesses with funding.

This is not Mickey Mouse industry anymore.

Are we witnessing the birth of Blocktech?

[nemgun]

It seems that there is about 1 new ICO (mainly ERC20's on Ethereum) every week. How is it possible that each of these tech's needs its own coin and blockchain? Why don't they just develop on Ethereum?

Is it solely to get the venture capital?

They want to "create" their own coin to scam people, in reality they don't need it at all, just a bitcoin address provided by an escrow and that's all. If they do ICO with home made coins, it is just to get the full controle over it, either to scam people and run with the money, or to scam them using different schemes, like Ponzy, Pyramid, MLM ...

I seriously advise people to consider twice before investing in a project who uses his own crypto.

[electronicash]

because they need money!!! lots and lots of money!!
they share those money to participants of their campaigns though so in a way they have some accomplice to scam users through the promise of certain profit.

nemgun, weren't you one of those people who once tried to have an ICO?

[SealTx]

There needs to be a new name for these companies. They are no longer altcoins but sizeable businesses with funding.

This is not Mickey Mouse industry anymore.

Are we witnessing the birth of Blocktech?

I hope so... not only that, but this is sizeable business without the freakish chains of banks and bank-bought regulation.

I agree with the bulk of you that equate ICO's with scams... but you have to admit that some amazing things are happening and really getting traction even if some are out and out scams, and if most of the others crash and burn for lack of insight, experience or plain old common sense.

I love the energy and the unconstrained volatility of it all. If I had just invested $10 in each ICO, I guarantee that in 10 years I would retire. Anyway, I am starting now to invest various amounts in every ICO that comes along.

I am waiting for "GiveAllEtherToMe Coin", yeah, I will throw $10 there too.

[Nascor]

since ICO's are a relatively new concept and the industry being very young, everyone is trying to become and "pioneer" and gain "followers"

in a couple of years when the main players will have emerged as leaders, it will make less sense to run an ICO, unless you have to offer something new to the market

[scambust]

It seems that there is about 1 new ICO (mainly ERC20's on Ethereum) every week. How is it possible that each of these tech's needs its own coin and blockchain? Why don't they just develop on Ethereum?

Is it solely to get the venture capital?

First of all, their blockchain is the Ethereum blockchain. ICOs are basically fundraising using Ethereum's smart contracts. They don't need to develop the Ethereum protocol because it is not their purpose.

Basically, the idea is you get tokenized shares where you get your future ETH dividends. Sometiimes, the token themselves are also used as coupons.