ICO Projects' Capital Flow

[dss]

Most projects are pure Ponzi schemes.

Project raise money from institutional investors and angel backers, the money raised will be trickled down to PR agency, and a large amount of it will move to the exchanges. After being listed, the project employs market making teams to manipulate prices and attract retail investors. When the token price goes high enough, the project team cashes out part of the tokens that the Foundation holds. After that, all they need to do is to act as if they are working hard. But if you check the github of most projects, you'd be surprise as how little concrete development they have done.

In order to make the market believe that the project is doing stuff, the best they can do is to attend this conference or host that meetup. Marketing and PR become the only work they do.

Those fucking scammers.

[realaccountakira]

Most projects are pure Ponzi schemes.

Project raise money from institutional investors and angel backers, the money raised will be trickled down to PR agency, and a large amount of it will move to the exchanges. After being listed, the project employs market making teams to manipulate prices and attract retail investors. When the token price goes high enough, the project team cashes out part of the tokens that the Foundation holds. After that, all they need to do is to act as if they are working hard. But if you check the github of most projects, you'd be surprise as how little concrete development they have done.

In order to make the market believe that the project is doing stuff, the best they can do is to attend this conference or host that meetup. Marketing and PR become the only work they do.

Those fucking scammers.

I completely agree with you. On a long enough timeline, majority of ICOs will be probably be exposed as the scams they truly are. Usually they exit by saying that they were "hacked." Just look at bitconnect. Millions of dollars and thousands of lives ruined all because of marketing and PR stunts.

The only way to fight against these scams is by educating the public. Sadly, is not a very easy thing do, especially when everyone wants to get rich quick.

[dss]

That said. Such scam model does post a few business opportunities.

To begin with, PR agency. In traditional VC world, some projects pour their VC money to advertisement in the subway or on the highway. That's because 1, it's easy money, and 2 they don't know how else to spend it wisely. Same thing applies to ICO projects. Most projects have business plans that can hardly be realized in 5 years, e.g. space, health care related, remittance, peer to peer energy transaction, etc. If you look at the team, most of them are young people with not enough working experience, let along industry expertise. So what do they do with the easy money they raise? Doing PR. CNBC, Bloomberg, Huffington Post, Business Insider, most of such media can be bought, and that's what the projects do.

Another place where honest people can make some nickel from the projects are events organizing companies, conferences, summits, hackathons, developer contests... You name it. Same reason as above. Because compared to concrete project development, those shallow PR marketing events are easy to execute and good to market. Consider them as fillers of an story. But when one story has nothing but fillers, it's an empty story.

In most regions, a large amount of ICO money flows to the exchanges. USD 2-5m. Exchanges at certain region will list any shitty coins as long as they pay enough dow.

More honest opportunities include developer training, recruitment service and third party app development.

But, when there is hype, there is the end of the hype. And we are almost there.

[hsdjdyt]

The value of investing in ICOs is not in the digital currency itself that is offered by the ventures, but in the actual operational effect and development prospects of the project. If the project is promising, the digital currency used to purchase the project's products and services can have room for appreciation. This requires To see how the project's white paper deals with this matter, the most important thing is to have a clear project profit model.
However, the current situation is that many white papers on entrepreneurial projects do not involve this piece at all, and even some projects do not even exist.
More white papers are mainly related to project background, definition, usage scenarios, market prospects, team presentations, specific use plans of ICO project funds, and lack of profit model.

[realaccountakira]

That said. Such scam model does post a few business opportunities.

-snip-

But, when there is hype, there is the end of the hype. And we are almost there.

I can clearly see and agree with you on the fact that this crypto hype brigs a lot of honest and legitimate business opportunities. There is so much potential work to be done and that is evident in the services section where we see people being recruited daily.

I however disagree with you last statement on the end of the hype. Crypto is here to stay and a large portion of the world is still unexposed to crypto. When we really go mainstream and when crypto is accepted at restaurants and movie houses, every company will have their own crypto currency. I imagine the hype then will bring so great that crypto business opportunities will be in so much demand.

[dss]

Thanks for reply.
Hype is caused by large amount of capital. The purpose most certainly is to attract more retail investors that are not yet exposed yet.
I see where you come from regarding how most common people are not aware of the soon begetting crypto world. But for this year/phase, which should be the time for most fund raising projects to deliver some kind of product. But sadly, as far as I know, quite a lot of them are unable to deliver because of technical inability.
So what I meant by that the hype is almost to the end, I mean that without a widely adopted app it will be really hard to get people be confident about the market again.

[talkbitcoin]

that's the story of almost all the altcoin history! they gain popularity by advertisement and nothing else. the better they advertise the higher their price can be. for example take Ethereum itself. they have been advertising it nonstop in the early days of its existence and successfully got it hyped up enough to get big initial pumps then the advertisement never stopped there. it continued with lots of fake news and eventually it got big enough that they could make millions of their premined coins.

[dss]

Agreed. Another good example is TRON. Started with nothing but copy pasted whitepaper, some shady manipulation over prices and now they have the cash the acquire any good dev team they want.