[timothy-quinn]

Thanks to this I've found building a product in the cryptocurrency market has been the most challenging for applying typical online marketing strategies - I've exhausted most avenues of advertisement - basically the only tools left are the more expensive sponsorship arrangements as every advertising platform will instantly reject your content.

I can appreciate why the pendulum swung hard against ads - it's incredibly hard to differentiate between real and fake ICOs, and we're seeing that again with the defi craze at the moment. It's just made it so much more expensive as an emerging company to try to sell services in this market even when you _aren't_ trying to sell a coin.

[pjc50]

Almost all ICOs have no reason to exist other than to extract money from the ICO. The entire space is full of fraudulent actors by design.

[puranjay]

And with Uniswap, you don't even need an ICO to scam people. Just mint a token, list it on Uniswap, throw in some buzzwords and exit scam

[dcolkitt]

For anybody morbidly interested in this kind of stuff, here's a fascinating case study. The token is ostensibly ERC20 compliant, but the transfer function is hardcoded to prevent anybody but the sender from selling on the Uniswap liquidity pool.

Muppets come in and buy the token on Uniswap. But they can't go back and sell it. Essentially all the Ethereum in the liquidity pool becomes the personal piggy bank of the scammer. There's nothing Uniswap can even do to prevent this type of scam, because the malicious code is in the token tracker contract, not Uniswap itself.

https://www.reddit.com/r/UniSwap/comments/jew0id/1000_reward...

[spurdoman77]

But you need some liquidity? I dont think it is that easy. Never used uniswap or invested in ICOs but to me seems that the golden days of ICO scams are gone. People have either lost their money or learned the lesson.

[puranjay]

We've now moved on from people naively buying into interesting projects and getting scammed.

Now, people willingly buy into pump & dump schemes, hoping to not be the ones left holding the bags. Just go to r/cryptomoonshots or /biz/ where a new coin is shilled practically every hour and everyone just hopes to ride the pump and dump it on the next round of gullible buyers.

There was a massive wave of food-themed DeFi tokens recently with multiple exit scams.

[capableweb]

> by design

Non-native English speaker here but doesn't "by design" refer to something being designed explicitly for that purpose? I agree that lots of ICOs were indeed scams and/or attempts of just taking money for low-quality work, but I don't think fund-raising was initially designed for that. It just happened to be that lots of fund-raising are scams.

But to say that it's by design it's going a bit far, and making your point weaker, not stronger.

[pjc50]

Cryptocurrency was designed to be resistant to law enforcement and allow money to be transferred irrevocably to opaque pseudonyms, and to prevent blacklisting by any central agency. Once fraud happens, you've irrevocably lost the money.

[artaak]

This is a hilariously uninformed statement. Which cryptocurrency?

I'd even argue that the juggernaut BTC was _designed_ to be trackable, and as the recent history shows, law enforcement successfully and multiple times did exactly that when needed - tracked, identified and penalized bad actors.

[dQw4w9WgXcQ]

The leading blockchain tech out there (Algorand) supports both freezing and clawback: https://developer.algorand.org/docs/features/asa/

[r--man]

I think their point is that the holders of the money after ICO can easily get away with doing nothing and just extract the funds. In reality, their payment is not tied to the interest of the coin holders, legally, or for the sake of their reputation. They can be anonymous.

[nullc]

The ICO ecosystem was expressly designed to help liquidate illiquid positions created by the super-massive eth premine without collapsing the market.

I suppose you're right that there wasn't any requirement for that design for the ICOs to be scams, there just wasn't any particular need for them to not be scams.

Virtually all (actually all?) ICOs themselves have been designed to have scam friendly terms-- e.g. no real ownership or control for the buyers, no accountability for the sellers, and little to no transparency. Even the least scammy of the ICOs have some term or another that effectively enables their issuers to just walk off with the funds with no recourse in the contract.

[getcrunk]

The phrase "by design" can be used emphatically and/or to mean in effect. Or at least that's how I also use it. Intetstingly, according to Webster's 1913 I'm using the word emphatically in an obsolete fashion.

[leppr]

That's like saying forests are made to harbor violence by design, because most forest animals are violent while farm animals are peaceful.

The abundance of scams in ICOs (and the cryptocurrency ecosystem in general for that matter) has more to do with the heavily regulated nature of the mainstream financial space, than the design of the cryptocurrency space itself. Because most of the world is regulated, fraudsters are now funneled to cryptocurrency. They come where they are the most free, but there is nothing in the structure of cryptocurrencies that encourages scams over legitimate enterprises. Honesty and hard work is still most rewarding. The absence of barriers to prevent scams other than regular social signals and the user's own vigilance, is the natural state of the world.

This same type of argument is repeatedly employed against free-speech platforms, that keep ending-up hosting the neo-nazis and other undesirable groups that were ousted from Facebook and co.

Shared reputation systems layered over a free platform like Matrix announced[1] a couple days ago should provide relief, but simple increase in adoption will also tilt the ratio back to the average.

[1]: https://news.ycombinator.com/item?id=24836987

[rossjudson]

Ah, I understand. The ICO scams are only illegal because there are laws. If you didn't have laws, they wouldn't be illegal!

Magic.

[leppr]

I think your comprehension of my argument is oversimplified.

This is about the dynamics between a set of entities, being mischaracterized as a fundamental property of one of these entities. (Here: migration of a pool of bad actors from traditional finance to cryptocurrency).

Like saying Iraq is an evil country by design because it harbors terrorist groups. Most people would agree by now that the emergence of these groups isn't directly caused by the nature of the country's culture or religion. For good reasons we have enough respect for these things to dig deeper in our understanding than a superficial glance. You're free to not do this with cryptocurrency, but then you probably shouldn't hold your opinions about it too strongly.

[rossjudson]

No, I get your argument. You have chosen a morally convenient abstraction that is allowing you to exclude the consequences of your actions/positions with respect to Bitcoin.

Comparing Bitcoin with a country like Iraq is pointlessly simplistic. Countries are complex social entities that aggregate behaviors through a large number of mechanisms. Bitcoin is a single mechanism whose characteristics have entirely predictable consequences.

Any sympathy for the University of California? https://www.bbc.com/news/technology-53214783

Bitcoin doesn't kill people. People kill people...right?

[leppr]

> Bitcoin is a single mechanism whose characteristics have entirely predictable consequences.

Cash is a single mechanism, that also predictably allows robbers to more easily offload their loot than if it was livestock, jewels or silverware. Are cash and other fungible assets automatically evil once they're on the internet?

You can cite random examples of crimes committed using Bitcoin, but that still doesn't begin to address the initial argument to which I replied: is cryptocurrency inherently evil? Will it cause more good in the world than bad once it is widely adopted?

[wolco2]

Forests are more dangerous they have hiding places for predators and predators A farm is a safely human controlled ecosystem for animals where their needs are met.

They attract different animals for this reason.

The bitcoin ico scams attracts many predators.

[leppr]

Yes, thankfully the metaphor fails when we take coercion into account.

Crypto scammers, overwhelmingly, simply fool people chasing easy profits. Hacks and actual offensive behaviors are uncommon, you're safe from predators in your den and you don't need to leave it.

Wait until smart contracts have been live for a certain amount of time before interacting with them. You won't fall prey to predatory behavior if you mint DAI with Maker or trade well known tokens on Uniswap for instance. The danger comes when sending money with no guarantees of getting anything back, in the hope of multiplying your money.

[smolder]

Apologies, this is pointless, but I just think it's funny you said "attract different animals" as if building a farm and waiting would cause cows and chickens to wander in and settle there.

[arcticbull]

It's not that "forests are made to harbor violence" but rather it offers hiding places that predators can adapt to their own needs that a farm intentionally does not. For that reason we should avoid the forest and stick to the farms.

[leppr]

If all you want is safety and stability yes. But it should be clear by now that the current regulated financial system is skewed against small players (which includes scammers, sure, but also regular entrepreneurs) and does not allow for enough innovation.

[seibelj]

Having a coin is a marketing strategy - people get in early because they have the most to gain, and then they spread the word to all of their friends to use the service, and it grows from there. Plus early adopters are extremely crypto-focused and have different groups and contacts who would be your ideal customers. The coin is the marketing - it's as if a tiny SaaS made it super simple to sell equity to their first customers, even in tiny increments.

[vkou]

> Having a coin is a marketing strategy - people get in early because they have the most to gain, and then they spread the word to all of their friends to use the service, and it grows from there.

So do ponzi schemes. The early investors into them make money, and have a lot to gain by spreading the word to other people.

Investing into a growing ponzi scheme is a rational investment strategy. That's why people do it, and that's one of the reasons for why they are illegal.

As far as I can tell, the majority of interest in ICOs comes from people who are hoping to dump their investment onto a bigger fool. Ironically, the worse the ICO is as a business, the more fools will be interested in it, which makes those ICOs more attractive to invest in.

[NationalPark]

Do speculators make good product advocates? Seems like they have a pretty obvious conflict of interest.

[seibelj]

They shill your product endlessly. What's the conflict of interest? They market for you, as they have a vested financial reason to do so. I mean it's no more a conflict than anyone else promoting their investment.

[rodonn]

The US financial system does not allow or encourage people who "shill" for investments. We in fact have many protections and policies that limit your ability to solicit investment in unregistered securities, which is what virtually all ICOs are/were.

[GoblinSlayer]

Investments aren't always in money. They can be in a form of vendor lock-in. It eventually results in massive hidden losses nobody warned about, but shilling was above sky.

[NationalPark]

I mean that the subjects of their "marketing" might come to the conclusion that advocates are primarily interested in attracting more speculators rather than selling a product they genuinely think will help you.

[apetresc]

I think they meant a conflict with the person they're advocating to, not advocating for.