NYT reporter: “81% ICOs were scams”

[danso]

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...

[chadbennett]

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."

[dkarl]

There's a huge difference between "fraud" and "scam." It's just not a meaningful difference for the people who buy in.

[debt]

“somewhere between 5 and 25% of ICOs are frauds.”

IPOs have a 0% fraud rate historically. Maybe ICO needs to be renamed so as not to be confused with IPO.

[ddorian43]

Seems low tbh.

[arikr]

I think they're indicating that 81% were outright scams

Some of the 19% may be scam like, but not pure scams

[thomasjudge]

That was going to be my comment exactly

[cx1000]

I think they mistyped "100" as "81"

[LandoCalrissian]

Are you telling me TrumpCoin isn't legit? I think I need to talk to my accountant.

[trophycase]

8% going on to trade on an exchange seems extremely hard to believe. Assuming most of them were ERC20, they could be traded on DEXs quite easily

[hendzen]

I'd be interested to know the percentage weighted by USD notional amount raised.

[duncan_bayne]

I am actually surprised by that number, in that I expected it to be a lot closer to 100%.

[sna1l]

https://twitter.com/nathanielpopper/status/97838862051082240...

[coldtea]

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").

[cm2187]

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.

[wellboy]

Ethereum was also a scam, which would have given you 10,000,000% profit?

[danidam]

"statistics for 2018 show that of the 74 offerings completed so far this year, around 76% will end up in the red." Are ICOs a fad or are they here to stay? https://www.investing.com/analysis/whats-behind-the-lower-nu...

[qedqfqef]

And what percentage are actually going to deliver a useful product/protocol that delivers significant value that justifies the investment?

[kirvyteo]

"· 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

[jgh]

presumably an inactive repo suggests they arent spending the money on development

[arisAlexis]

counting random posts on bitcointalk that got money? im sure he discovered internet recently

[dk8996]

This seems like bs. I would look at ICOs that arent clear scams. Using something like icodrops list.

[viraptor]

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.