You mean, you'd look at specifically the place which does some initial filtering on submissions to count how many of them are scams? That's starting with a biased sample. That's not how you get good statistics.
I guess it's a question of who's asking. Practically anyone can whip up an ICO, and there's a finanvial incentive to do o, so obviously the majority of ICOs will be lousy offerings. Knowing how many in total are fraudulent is interesting, but for most people the question is how many of the non-obvious scams are still scams.
It's like if you analyzed every piece of fiction ever written and concluded that nearly 100% of fiction is awful. That's probably true without any prefilter, but most people will get their books from a curated selection of some sort and will not find that conclusion very useful. Instead, they'll likely conclude that just 90% of everything is crap. ;)
Just like with any other investment - unless you know the subject you plan to invest in, simply don't. It's the same for stock exchanges, properties, and so on.
Having said that, there appear sites like IcoDrops (for ICO), and Trivial.co (for post-ICO) that help people make informed decisions.
What is a sound decentralized app that was curated by IcoDrops where the app depended on blockchain-based tokens and could potentially scale up to millions of users based on that same blockchain?
Or that isn't possible, what's a decentralized app that is still valuable technology which doesn't need to scale up like that?
From the author of the tweet, "since tweeting this, i've heard that @ccatalini's team at MIT has looked into ICOs and gotten very different numbers: somewhere between 5 and 25% of ICOs are frauds. He hasn't published his full research, but will be interesting to see what accounts for the difference."
I'm not sure if it's meant to be sarcasm. One thing that comes to mind is a lot of shady public companies don't have an IPO, but instead do a reverse merger with a public shell or operating company. I don't know if companies with IPOs are always non-fraudulent, but I think the process goes along with a certain amount of scrutiny and conversely there are ways to avoid it.
I think there is a difference between "IPO is fraud/scam" and "the company behind the IPO is fraud/scam".
Most ICO's I've looked at haven't produced anything but fancy blog posts (and in some cases, the DNS registration has expired). I think I've invested into 2 or 3 (didn't invest much, 10 or 50$ at most so it didn't hurt much and I stopped by now).
Depends on your definition of fraud: IPO's were once considered a scam on the ignorance of the general public, until the financial market lost its scrupules.
There are a lot of ICOs as well just with bad ideas run by not very competent people. Again with similar results for investors. It's hard to draw the line between them and scams.
I think ICOs being run by not very competent people is a big problem considering all the problems the company faces with an ICO based on what I read about companies have with successful ICOs.
Even if ICO companies are legitimate, they're stuck in a weird place between the law, taxes and other problems.
To be clear, it's a NYT reporter tweeting the findings found in this blog post by the Satis Group -- not necessarily tweeting this as something that he would himself publish in the NYT under his byline: https://medium.com/satis-group/ico-quality-development-tradi...
"· Gone Dead (pre-trading): Succeeded to raise funding and completed the process, however was not listed on exchanges for trading and has not had a code contribution in Github on a rolling three-month basis from that point in time."
I don't know ICO mechanics well but why is this a criteria? Can anyone explain?
*Edit: I mean the code contribution in Github portion
I'd say 100%, but I'll take 81% too. Any ICO from a non-government entity is very close to a scam by definition.
(Heck, money from government entities is close to a scam itself, but at least it has better guarantees than "we're certain this crypto code is OK" and "a 18-year old implemented an Exchange in PHP from his parent's basement, you should really trust your coins (and real money) there").
The problem with ICO is that they are a claim on nothing. People are buying a cryptographic key. They are being sold thin air. My understanding is that some ICO will have a real underlying business and the ICO provides a claim on some of that business somehow (but keeping in mind it is not equity). But most do not.
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[ 2.3 ms ] story [ 121 ms ] thread0x81 / 0xFF = 129 / 255 ~= 50.59%
Some of the 19% may be scam like, but not pure scams
It's like if you analyzed every piece of fiction ever written and concluded that nearly 100% of fiction is awful. That's probably true without any prefilter, but most people will get their books from a curated selection of some sort and will not find that conclusion very useful. Instead, they'll likely conclude that just 90% of everything is crap. ;)
The answer to a hungry investor to avoid bad ICOs is to... ?
The obvious answer seems to me to be "avoid ICOs for the time being."
Is there really another obvious answer to that?
Having said that, there appear sites like IcoDrops (for ICO), and Trivial.co (for post-ICO) that help people make informed decisions.
Or that isn't possible, what's a decentralized app that is still valuable technology which doesn't need to scale up like that?
IPOs have a 0% fraud rate historically. Maybe ICO needs to be renamed so as not to be confused with IPO.
Most ICO's I've looked at haven't produced anything but fancy blog posts (and in some cases, the DNS registration has expired). I think I've invested into 2 or 3 (didn't invest much, 10 or 50$ at most so it didn't hurt much and I stopped by now).
Even if ICO companies are legitimate, they're stuck in a weird place between the law, taxes and other problems.
https://www.forbes.com/sites/cameronkeng/2018/03/25/problems...
I don't know ICO mechanics well but why is this a criteria? Can anyone explain?
*Edit: I mean the code contribution in Github portion
(Heck, money from government entities is close to a scam itself, but at least it has better guarantees than "we're certain this crypto code is OK" and "a 18-year old implemented an Exchange in PHP from his parent's basement, you should really trust your coins (and real money) there").
In fact a lot of scams can be hugely profitable -- even ponzi schemes if you're not at the lower layers.
Is it a scam when you invest in promising technology that, yes, could not work out?
Oh, most of those people do know -- or should know better.
>Is it a scam when you invest in promising technology that, yes, could not work out?
In "technology that might not work out" alone, no.
In "BS application of technology just because it's in fashion, with no business content" yes.
Furthermore, Smart contracts are a business content.