What is an ICO? How Many Dead Coins Are There? Is Tezos real? (Explain Like I’m 5)
Continued from Which crypto should I buy? How do you spot a crypto scam? (Explain Like I’m 5)
Someone said I needed to buy at an ICO to get the best crypto price, is that right?
Hard to say. Some ICO prices have proved to be good deals, some not. Do you know what an ICO is?
It’s like an IPO, except with a C.
Wow, you sure know how to spell it. Do you know what it is?
It’s a coin sale.
Of course, it is. But it’s not like an IPO. In an IPO you buy stock rather than coins. So a company sells its stock through investment banks, who act as underwriters for the IPO. Think of it like this: they buy all the stock and hope to sell it to the public at a profit. There’s usually a big marketing campaign for the stock by everyone involved in the hope of big profits.
So, what’s the difference? Spell it out for me, Cryptoman
Truth is, the only thing that’s the same is the marketing campaign. With an ICO there are no bankers involved, and there’s very little regulation, and you will not necessarily be listed on any crypto exchange once you’ve completed the ICO. However, when a company does an ICO, it does run a marketing campaign.
How does that work?
They set up a website to explain their idea, write a white paper for people to read, publish a roadmap and then announce an ICO date. Then they set a Telegram ID, a subreddit on Reddit, a page on Facebook, write something on Bitcointalk.org. Get listed on various ICO listings. Then you’re off to the races.
What are the best websites for ICO listings?
Tokenmarket is probably the most popular. But there are many. Google it. But if you are interested in putting money in, note that some ICOs will not accept US investors.
Is that because they hate us?
No it’s because the US citizens are subject to different financial regulations. So we cannot participate in some ICOs.
Do coins usually rise in price after the ICO?
It varies. Some do well. Some fall. Some actually die.
What do you mean by die?
The value falls to almost nothing.
You mean actually nothing.
No I don’t. I mean so low that it would not be worth the cost of trying to trade it — like one Satoshi in Bitcoin.
What is a Satoshi?
.00000001 Bitcoin. That’s almost nothing.
What is it in dollars?
Well if the Bitcoin price was $6000, a satoshi would be worth $0.00006. A cent would then be worth 167 satoshi.
So if that happens to a coin then it’s dead.
As dead as dormouse with a doornail sticking out of its ear. And when it dies, it starts to disappear. It ceases to be listed anywhere. The website becomes derelict and then disappears into oblivion when no-one pays the rent.
Does anyone know how many dead coins there are?
Funny you should ask that. I came across a web site yesterday that lists dead coins.
A long long time ago back in the time of the dotcom bubble, someone noticed that lots of dotcom businesses were dying. He set up a website called F**kedCompany.com. It lasted from 2000 to 2007. Developers who were working on dying projects used to go to the site and predict the demise of the company they worked for. It was a kind of revenge site.
So is the dead coin site called F**kedCoin.com?
No, it’s called DeadCoins.com. I guess they were afraid of being offensive.
How many coins does it list?
829 at the moment. It categorizes them according to whether the coin was a hack, or a scam or a parody or is simply no more, dead, deceased,…
What do they man by hack?
That’s when the coin was set up with a wallet — sometimes called a client — which had malware in it . In other words the whole idea of the coin was to attempt to hack you.
Did people do that?
Many times. There were 12 such coins. What can I say, it’s a wild world.
What’s a parody coin?
A joke coin. Not meant to be serious. Like Doge coin — which was supposed to be the dog coin — except that, bizarrely people started investing in it, and it became valuable. Most parody coins have the decency to die.
Have you ever invested in an ICO, Cryptoman?
Yes, but only once. I put money into Tezos.
How did that work out?
I’m still waiting to find out. The coin has not properly launched yet. But the news after the ICO was depressing, and at one point I figured I’d lost the money.
Did you cry?
No, I drank Bourbon.
The next in the series is: What are Hot Wallets, Cold Wallets and Hardware Wallets? (Explain Like I’m 5)
Robin Bloor Ph D. is the Technology Evangelist for Permission.io, author of The “Common Sense” of Crypto Currency, cofounder of The Bloor Group and webmaster of TheDataRightsofMan.com.
