The ICO Epidemic
Ben Lee Forbes Councils Member
Forbes Technology Council COUNCIL POST
Expertise from Forbes Councils members, operated under license. Opinions expressed are those of the author.
Post written by
Inc. 30 Under 30. Founder and CEO, Neon Roots -- a digital development agency. Digital Product Expert.
Celebrities, club promoters and every modern-day snakeoil salesman have all come out of the woodwork to promote initial coin offerings (ICOs).
Much like an IPO, initial coin offerings allow the public to crowdfund a new digital currency into the cryptocurrency ecosystem. Telegram, a cloud-based instant messaging service, is on track to pocket over $2 billion thanks to its ICO. Some have relied on scams to drive up investments, including Miroskii, which touted a fictitious Ryan Gosling as its lead designer, helping the company receive close to $850,000 in financing from its ICO launch. And still others have managed to raise funding only to leave investors with a whitepaper saying nothing but the word "penis."
As a digital agency owner, I've been pitched everything from blockchain tech revolutionizing the way you track child trafficking through a general ledger to how Ethereum and smart tracks will revolutionize the fruits and vegetables industry.
And every time I'm skeptical.
Big Money, Bad Actors And A Whole Lot Of Smoke And Mirrors
I'm not advocating for or against blockchain. In fact, I try to keep my mouth shut about all things crypto and blockchain when I speak to the press. Mainly because if you're the crypto expert who didn't foresee the X% crash tomorrow, all of a sudden you look like a fool. If you're the trader who did predict it, decided to short it and didn't tell your friends in your private Slack or Telegram group, you look even worse.
The biggest problem I have with cryptocurrency startups and ICOs is the bad actors. Being a native Angeleno, you see lots of folks reinventing their brands every three to five years. Shady affiliates pushing porn sites to your run-of-the-mill Ponzi schemers.
All these characters show up to your local crypto meetups and want a piece of the action. They've reinvented themselves as crypto experts or blockchain gurus and now wear black turtlenecks and write "Crypto Visionary" in their Linkedin headlines.
Here's the problem: most aren't building any real technology. "Ben, we just ICO'd for $20 million, but we're not quite ready to work on development. Can you help us with some app screen designs and landing pages?"
That's what it sounds like to own a digital agency right now.
Lots of sales funnels, branding work, landing pages and … drumroll … more UI/UX design screens with no back-end technology. The startup ecosystem is thriving with innovators and visionaries everywhere. Blockchain has the potential to disrupt the world, but it requires people to actually use their funds to build real technology. Not just vapor.
Crypto Is The Future -- But It Needs A Cleanse
I remember when the ICO epidemic exploded last year and everyone was concerned with the engineering scarcity it would bring. "Hey! Know anyone devs with C++ skills?" "Can you please find me a dev who has worked on the ERC20 token?" "Will pay in cash and cryptocurrency!"
Well, the catch-22 here is that most of these players are doing no real development other than marketing assets, which means a lot of bored crypto devs not actually writing code -- nor committing their work on Github or open-sourcing the code like their mission statement said it would.
It's not so much that the market needs a correction as much as a cleanse -- a cleanse of the shady, bad actors who are attracted to the massive gains.
I, for one, remain extremely cautious whenever we see founders trying to build products in crypto. Despite the funding and experience of leadership, we're still amazed to see how few are actually building real technologies to disrupt the market.
Don't get me wrong: Crypto and blockchain are the future. There's no doubt about that. But before we see that future, we'll all have to ride it out as the dust settles on the fakers and the scams.
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Inc. 30 Under 30. Founder and CEO, Rootstrap -- a digital development agency. Digital Product Expert.