- George Frey/Getty Images
LONDON – There is a new digital goldrush underway worldwide in 2017: the ICO.
Startups and entrepreneurs have raised over $1 billion since the start of the year through so-called “Initial Coin Offerings” (ICOs).
This is where a business issues a new digital currency online – think bitcoin – in exchange for real money. These coins can then be used for projects that the entrepreneurs are working on.
ICOs can be set up in as little as an hour – far quicker than a traditional venture capital fundraising drive which could take months.
However, many people are starting to express alarm at the loose controls on the market and many of the projects that cash is flowing into. The Financial Times’ Kadhim Shubber pointed out this week that a startup raised $200 million selling a coin that it expressly said has no use or purpose.
David Rutter, a Wall Street veteran who now heads up fintech company R3, told Business Insider he thinks it’s a “bubble” and said: “Many of them are based on powerpoint decks and not a lot more, not fundamentally sound business plans.”
The market is currently dominated by tech entrepreneurs looking to raise money and the ideas range from the sublime to the ridiculous. Because the barrier to entry is so low for an ICO, it seems like every man and his dog is pitching an idea at the moment.
Given the mania, Business Insider decided it was only right to test prospective investors’ guile – can you spot the real ICO (as per ICOtracker.net and ICOchecker.com) from the fake ones we’ve made up?
Take the quiz below (Note: may contain traces of humour):
Altocar — Personalized taxi aggregator with the Digital Economy implementation
- Unsplash/Peter Kasprzyk
Altocar is raising money to build a kind of decentralized Uber (yes, I know Uber is a decentralized network, now is not the time) that it wants to roll-out across Russia. Altocar will build an open network where any drivers can log on to and accept jobs, getting paid in Altocar tokens.
What do you reckon?
It’s real! The company is based in Russia and “has four years experience in the development and promotion of taxi aggregators,” according to its website.
Don’t get too excited though – it has currently raised just $32,111 from 12 investors after 10 days of its ICO. Anyone who buys Altocar tokens will be eligible for free trips and discounts.
Gasee Coins — The decentralized energy trading hub
- Kai Pfaffenbach/REUTERS
Gasee coins will be used to buy and sell excess power generated by solar panels and other localised energy sources. Anyone will be able to use Gasee coins to buy extra power when they need, while sellers will get paid on the blockchain-based network using the coin. It is being developed by a startup called ITL in Germany, where local power generation is common.
Gasee is just a bunch of hot air. But if someone wants to give me a few million quid for the idea, I won’t say no.
Token Squared — An ETF-fund for ICO offerings
Token Squared aims to raise $5 million to invest in other ICOs at the moment. This will give Token Squared token holders diversified exposure to the nascent sector – a bit like an ICO ETF.
Token Squared: FAKE
- REUTERS/Kai Pfaffenbach
Nope! Another fabrication. Although, not a bad one if I do say so myself…
Hungry Panda Coin — Ethreum-powered game ecosystem
- REUTERS/Heinz-Peter Bader
Hungry Panda Games is a small games development studio, which wants to build games and e-sports on top of the ethereum network (a type of blockchain). It is hoping to raise $82 million to fund the development of games like “Forge Your Destiny” and “Battle of Atlantis.” Gamers will be able to use its tokens in-game.
Place your bets now…
Hungry Panda Coin: REAL
- REUTERS/Tyrone Siu
Of course this is real! Why would you doubt it? The weird name? The fact all its games simply say: “Details coming soon” on the website? The fact that there doesn’t seem to be a ticker showing how much has been raised? Cynic.
Tulipcoin — A blockchain-based international platform for the shipping industry
- Lucy Nicholson/Reuters
Tulip Inc, a startup from the Philippines, plans to build a decentralised, blockchain-powered platform for international shipping. People will be able to track the progress of ships and their cargo around the world in the network and transactions involving the cargo and ships will be done in Tulipcoin – so the value should rise in line with international trade.
Tulip Inc is hoping to raise $60 million to build this decentralized network.
Got to be real right?
- REUTERS/Brendan McDermid
Extra points for anyone whos potted that Tulipcoin is a reference to Tulipmania, the 17th century Dutch craze that saw the value of Tulip bulbs sky rocket before crashing. Commentators have compared the current ICO boom to Tulipmania.
Soma — A decentralized social marketplace
- Carl Court/Getty Images
Soma is just like any other marketplace – you can sell a car or a tin of fish, if you want. The twist is that people on the platform will also be paid Soma Tokens if they do things that benefit other people on the platform in a bid to foster a sense of community.
Soma’s developers are looking to raise $27 million to build this marketplace. Sound like a good investment?
From Soma’s website: “Soma is a revolutionary decentralized platform which facilitates trade inside the Soma Community through a rewarding system that enables beneficial collaboration of the community members. Users are encouraged to engage in actions that will benefit other members and the community as a whole by rewarding such actions with Soma Community (SCT), a cryptocurrency designed to incentivize the members of the decentralized community to perform value-adding services and act as a fast, secure and cost-effective way of compensation.”
Clear as mud.
Royal Kingdom Coin — B2B solutions to the business clients
- Flickr/Rob Oo
Royal Kingdom coin is being issued to raise funds for Royal Kingdom Enterprise, a company that aims to help blockchain and cryptocurrency businesses set up shop in Dubai. The company offers services such as payment processing and cryptocurrency gateways.
Royal Kingdom coins will entitle owners to a share of Royal Kingdom Enterprise’s profits and can also be used to buy services from the company.
Could it be?
Royal Kingdom Coin: REAL
Royal Kindom Coin really is a thing. Although – with just $152,283 raised with 22 days left of its ICO to go – its prospects are not looking great at the moment.
district0x — A network of decentralized markets and communities
It seems like everyone on this list is building some sort of decentralized network or marketplace – how are you meant to keep track of them all? Of course! A network for your markets!
district0x is developing tools to allow people to build digital, decentralized “districts” where they can interact with each other online. It will all be powered by something called Aragon “a revolutionary new platform for the deployment of unstoppable virtual organizations and entities.”
Could it be?
You bet your ass district0x is real!
Despite sounding like a naff club and Aragon sounding like some sort of super villain organisation, district0x has raised just over $6 million from more than 1,300 people. It is already powering “districts” such as Ethlance, Name Bazaar, and Meme Factory.
Dingo Dollars — A dogecoin successor that’s the digital currency of meme appreciation
- Mike Nudelman / Business Insider
The successor to the joke Dogecoin, Dingo Dollars are definitely by the internet, for the internet. The project grew out of forums like 4Chan and is meant to be a way of showing appreciation for memes, jokes, and general internet culture – if you like something someone has done online, you can send them a Dingo Dollar in appreciation.
The funds raised from the token sale – about $10 million if it hits the hard cap limit – will be escrowed and used as a backstop to underpin the value of the currency.
Real or fake?
Dingo Dollars: FAKE
I stole this idea from ITV’s “I’m A Celebrity! Get Me Out of Here!”
Ambrosus — The world’s first trusted blockchain-based ecosystem for the food supply chain
Ambrosus, based in Switzerland, plans to build a Ethereum-based system that will track the supply chain of food, allowing people to check where it comes from, how it has been processed, and where. All this information will be stored using blockchain-technology, protecting it from being edited or hacked.
Ambrosus plans to launch its ICO in September.
CEO and cofounder Angel Versetti says in a press release: “With a dynamic ecosystem of complementing technologies developed within and around the Ethereum ecosystem, we have devised a bold rethinking of how the global food supply chains and markets could operate.
“A system of interconnected quality assurance sensors can reliably record the entire history of food from farm to fork; blockchain can protect the integrity and verifiability of sensor data; while smart contracts can enable automatic governance of food supply chains and manage commercial relationships between the different actors within them.”
ThinkCoins — An Ethereum-based social listening network
- Matt Cardy / Getty
ThinkRight is a platform for crowdsourcing ideas – a little like Quora but with money changing hands. ThinkCoin will be used to reward users on the platform who suggest the best ideas.
ThinkRight, which is staffed by developers across the UK, China, Singapore, and Australia, is after $14 million to build its platform.
Is ThinkRight right?
- REUTERS/Fabian Bimmer
Just me again – yet another billion dollar opportunity I thought up this morning!
EOS — Decentralize everything
Listen, you get to a point where you think – why just decentralize one thing? If we’re riding the decentralizing train, why not stop at every station?
That seems to be Block.one’s thinking. The company is raising money to build a blockchain-based operating system for businesses by selling EOS tokens. The operating system will be powered by EOS tokens and will allow businesses to decentralize whatever function they want. DIY decentralization!
Could it be?
Oh yeah! It’s real alright!
The token sale is spread over a mammoth 341 days and being broken into chunks. EOS coins are already trading and worth $1.61 as of Thursday.
I need a lie-down…