The (not so) Wonderful World of ICOs - Part 1

 

 

Bitcoin, Blockchain, Smart Contracts, Cryptocurrencies, Ethereum, ICOs, Tokens…the world is buzzing around these things and rightfully so.

This wonderful world of Distributed Ledger Technology (DLT) has taken the world by storm and with it people are flooding into the space in an attempt to grab their own slice of the pie, either as service providers, would be entrepreneurs, or those with the darkest of intentions to scam people from the get go. Many hearing the word ICO immediately think of scam but there are many other scam artists lurking in the shadows disguised as service providers.

Here’s a review of some of the dealings I’ve had with people of all shapes and sizes within this new cryptoconomy.

Not too long ago I was pitched a 12 page PPT whitepaper for an upcoming ICO, by what appeared to be 4 serious, middle-aged business people sitting across the world in Asia. They looked the part and their website was polished and at first I was really quite impressed. This was up to the point of receiving their 12 page whitepaper and within it their uncapped funding goal of $100M.

I’ve always found it best to tell it how I see it, so in my next communication with them this is what I said verbatim:

“ Hi ……

Forgive my frankness, but this is how I roll.

I have read through your 12 page PPT document and have to say the following:

There is as much chance of me winning the Powerball lottery as you have in raising $100MM through an ICO, ITO or TGE. (yes, calling it what you may doesn’t change the compliance minefield out there)

There are just so many things wrong with your offer and many will categorize your offer into the “Get Rich Quick” category. It’s fairly easy to see that you have had very little guidance throughout the ICO development process too, as have broken every best practice rule in the unwritten book.

Based on the above, I would not want to involve my investors in your project until such time that you take this really seriously and get the real help that you so obviously need.

Respectfully,

Shane”

 

As can be seen from the response below, it didn’t go down to well!

“Thank you for reviewing the information. We are not into “Get Rich Quick”. I invested 27000+ man hours and lot of my personal money in building this company so far. Your comments are really broad and it would not offer advise or value or any constructive criticism. Sorry, I contacted you and wasted your time and as well as mine.”

27,000 man hours?!? Now I wonder how many startups keep track of the man hours invested before they set sail and use it as a USP. Maybe I should start keeping track of my man hours and include thinking time on the balance sheet when showering and doing other nasty stuff in the bathroom.

Anyway, as you’ve already gathered the gentleman went on his merry way and disappeared into the ether. Did I do him any favors perhaps? I hope so.

 

Advisor? Investor?

I really can’t keep count of the number of times I’ve been asked to join an ICO as an advisor. Similarly, I’ve lost count of the number of people who pitch me direct investment opportunities with promises of 50% discounts on their tokens. I find that the higher the discount on offer, the higher the needle points to the red zone on the Junk Meter. Finding an ICO that sits within the green zone on the Junk Meter is very rare indeed, although, in fairness, some of the concepts are really innovative, but the people planning to execute are all over the place. Don’t get me wrong as there are a few gems out there where all of the stars do align. Rare indeed.

I’ll wrap up this first installment with yet another bit of comic relief.

Just this past week, we were contacted by a guy who made claim on his Linkedin profile that he was an ICO consultant & Blockchain expert. He apparently called in in a bit of a panic as had already begun searching for clients and had one ready to spend $350k to go the ICO route but was concerned he may get into trouble.

Anyway, a call was scheduled and I spoke with him for the first time a few days ago. He seemed panicked and after a 30 minute call with him explaining the process involved in going the ICO route and the possible legal repercussions along the way, we ended the call promising to keep in touch with each other once he’d digested the contents of the call.'

To my amusement, when I returned to view his LinkedIn profile a few hours later, all reference to ICO Consultant and Blockchain Expert was gone. I think he realized there’s a lot more to it than just giving yourself a label.

He’s not alone. There are many others out there. The blind leading the blind can never be a good thing.

Finally, don’t forget that we have the Cryptoconomy Summit scheduled for March 28th & 29th, 2018 to be held at the Tampa Convention Center here in the Sunshine State of Florida. With a sterling line up of speakers and more being added each week, we plan to make this event one to remember.

Until next time…..Smile

 

Shane Liddell is the CEO of Cryptologist.io - The Cryptocurrency and Blockchain Consultants and is Co-Founder of the Cryptoconomy Summit.