What is an ICO : a simple analogy (& some ranting)

This startup comes to me with the following proposal :

Them :

We have been working on this idea for a new type of car. It will be an amazing car. So much better than the existing ones. Everyone will want one. Our project is very serious, we have been working on it for 3 months and we already have a web site. We even have a whitepaper where everything is explained with a lot of complex formulas. One of the great thing with this car is that it runs on a special fuel called “fueltoken” that only we can make.
We don’t want VC funding, but we need money. So here’s what we’re going to do : we promise that the total number of “fueltoken” will not be unlimited. Next week we are going to offer you the opportunity to buy a certain number of those “fueltoken” at a great price.

Me :

Why would I want that ?

Them :

Because when we make our car and everyone has one, don’t you think they will need fuel ? Won’t you be happy to be to have some then ?

This is the end of the analogy that I use when I am asked what an ICO is. Now, let’s rant a bit :


Me :

Where do I sign ?

Them :

No need to sign anything. At precisely 9am, when we reach block number 39762, you connect to our web site with the mobile app which is in the link we sent you by email when you didn’t sign up.
All the instructions, and much more will be on our reddit, the rest of the instructions will be in our Telegram channel (be sure to read all the great messages there, as one of them may be useful). Be sure to triple check with our Slack channel of course. You will then be asked stand in line for several hundreds of minutes, and if the 8541 people in front of you are nice, and if our web site is not ddosed and if the Ethereum blockchain is still accepting transactions, you may be allowed to send your money.
Just don’t forget : if you set the gas limit to more than 50,000, your transaction will be rejected, and if you set it to less than 200,000, it will never go through.

Me :

Thank you for the opportunity.

This is more or less how ICOs work today. Buyer beware…

Disclaimer : I’m a buyer…