Ask HN: What is the business model of ICO?

7 points by chenpengcheng ↗ HN
Somebody just told me that they raised $16M in ICO. That is like a lot of money. How will the money be used?

5 comments

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I believe the business model is something along the lines of:

* start up

* cash in

* sell out

* bro down

There was a recent comment on Reddit that during the first dot-com bubble there were a lot of people who just used start-up money to have fun. That didn’t really happen a lot this time and people now in SF are super famous for their irrational belief in their company and working 130 hour weeks ala Melissa Mayer.

Anyway I think ICOs are like some start-ups in the first bubble, using the money to party because no one is looking closely. After all, if you have a great company or a shit company, you still raise the same amount of money. Why work hard when you know the upcoming bubble correction will wipe out your gains?

* Make imaginary money.

* Sell it to people who've gone mad.

There is no step 3. It's not an investment, you don't own a portion of the company as a result. It would be like selling monopoly money except that monopoly is a trademark so that stuff's probably worth more.

So it is better not to chase the fame. Build something which lasts:)
As I see it - ICO is a very quick way to bypass 100% of regulations to raise money.

As long as buyers are ok with potential to lose 100% of their investment - everyone (but government regulators) are happy.