Nick Ayton aka the ‘Sage of Shoreditch’ having just completed his own ICO 21Million looks at why there are so many people trying to damage Initial Coin Offerings.

An Initial Coin Offering, a token sale and crypto crowdsale no matter what you want to call them is a new Capital Market coming to terms with itself. It is as I have said before, Crypto Capital Market 2.0 is still a pubescent teenager who has imperfections and blemishes and will make mistakes, it is working and will continue to do so.

It isn’t a scam machine reported by so many, and in every market it is inevitable some people will take advantage of what is largely unregulated, albeit the crypto community does police it best it can and places hurdles on the people behind each ICO.

The parallel is CrowdFunding which is again unregulated and where default rates have started to increase. As with any system it takes time, 18 to 24 months before anyone really knows when the entrepreneurs have built something that real customers have a chance to buy, only then will you know if your App Token is worth anything.

Demeaning ICOs

Most of the people making ridiculous comments demeaning ICOs are mostly idiots that know very little about Blockchain and cryptocurrencies, let alone been involved in an ICO.

They have lost control of rational thought. Many have never run a business, let alone had an idea and been rejected by the criminal community we know as investment banks.

"Investment banks are a bunch of out of control professional gamblers that play with our money and assets, and in 2008 destroyed $4 tln of our value, our pension funds. And nobody was held accountable."

“I’ll be gone, you’ll be gone”

As Thomas Friedman said, “I’ll be gone, you’ll be gone.” A mentality where bankers take knowing they will have moved on.

Where fear and greed runs our capital markets, our banking systems every once in awhile turn to the governments, who use taxpayers money to bail them out. How can this be tolerated?  The simple answer there was no other option, but now there is…so don’t moan and try to kill it off!

ICOs are unregulated yes. But so are banks and the people who run them as 2008 demonstrates.

Let us not kid ourselves all this banking regulation is actually working because it isn’t as another crisis builds around student and car loans.


The regulators were asleep at the wheel back in 2008 and they are again it seems?

It is funny that every person, whether a prosecutor or senior regulator that attempts to take a tough stance on banks loses, simply move on or find themselves discredited by a Fractional Reserve Banking system that is hanging on by its fingertips.

"So don’t give me ICOs are unregulated. The only reason to regulate ICOs is for the government to try to control it because they fear the people when they get together."

Who is bemoaning ICOs

Can everyone get a grip and come to their senses, please? ICOs are popular because they do one thing nobody else or a system can do.

ICOs allow entrepreneurs to get access to the capital they need, from a marketplace of crypto investors, the crowd that can and want to invest small amounts into these ideas and these new crypto operating models in order to build new industry platforms and find new ways of creating fairer business operating models many of whom have a social conscience.

ICOs have come along at the right time and may be the only system that works because it is beyond the manipulation of centralized systems, of bankers and governments.

"And yes there will be scammers, criminals and entrepreneurs with weak propositions, poor management skills and no clue. But then the market is free and open and nobody is forcing you to invest."

Compare this to a regulated market of stocks and shares where you have to go through brokers and intermediaries that advise you, take fees and when things go wrong deny all knowledge.

Then you find there is no recourse and the regulator ignores your letters, as the system feeds the many layers of people all feeding from the same trough, yours.

ICOs raise “too much money”

I don’t get people moaning that Status, BlockOne and Bancor or Trezor have raised too much cash? Hundreds of millions of dollars in a matter of hours and days. I read every day that people are saying the management team is therefore stupid, there should be a hard cap, they have an agenda or somehow their project is a scam? Seriously for raising too much money?

How is this any different to UBER or Airbnb having billions pumped into a centralized system by the VC Ponzi boys to stoke its value?

But then again there was a need change people’s behavior to grasp a new idea, with a new Sharing Economy 1.0 concept you need lots of capital to reach a new audience.

For UBER and Airbnb to not only unlock demand that was already there, to bring a global audience into the tent and globalize their business models very quickly. Have they delivered for investors?

"Should the amount of capital an ICO raises be restricted? Will raising too much cash make it harder for the management team to make money, and deliver returns for investors?"

Maybe these are valid points, but most investors have in fact purchased only an ‘App Token’ that is reliant on the crowd buying and selling and doesn’t entitle the owner to any returns, dividends or equity.

You get a token that goes up or down, that you can buy or sell on Crypto Exchanges if it can get listed, where Market Capitalisation i.e. the amount raised matters.

As for many new ICOs getting listed remains an issue as all exchanges are overtrading and experiencing explosive growth, and many don’t have enough programmers to add new coins to their markets.

Due diligence

I have written a few times about ICOs and have reminded people they have to follow the basics of investing, whether they are an unsophisticated investor or someone with experience do some basic due diligence.

Look at the investment opportunity, understand the concept, look into the management team and understand how the token works for investors. But remember you could ask a broker, pay for an adviser or money manager that will lose your money, and even if they make market returns, after paying their fees you lose again.

Remember this

"Most ICO tokens are App Coins or native coins with the single objective to avoid what are known as Collective Investment Scheme rules, a wide body of loose regulation designed by the one percent to control everything."