Good. The amount of crazy ICO's I've seen is staggering. Most of them are surely scams in some sense. Reddit is filled with them.
'The most bespoke electric hypercar! With blockchain!' http://www.arrinera.io/ - I mean really?! I heard someone talking about "LGBT on the blockchain" the other day - "We'll aim for a conservative $40million ICO." Ridiculous.
At a certain point I have to wonder if this is working along the lines of a lemon market. Coin investors don't know for certain whether they're being scammed, so they want an offer that will have positive expectation even after adjusting for scam risk. But founders do know, somewhat, the value of their ideas - and honest players are bounded by what they can actually return, while the deluded or dishonest can promise the moon. Eventually it only becomes possible to get investments by lying to people.
There are forces that should act as a brake here, of course; a sober idea asking for $200k ought to have lower risk than a stupid idea asking for $20M. But for some reason, that sort of risk discrimination isn't really happening at the moment. Maybe investors are over-eager, maybe the scam rate is so high at all price points to bury useful information, but it certainly looks like bad ideas are actually doing better.
Yep, it's deliberate. They're the backalley version of a regular stock offering.
They're marketing themselves as "opening investments up to the people" but they're simply a way to get money from investors without any of the very reasonable legal securities and obligations that come with a company going public.
[2] https://basicattentiontoken.org/faq/#meaning
edit: typo
I would put this squarely in the same vein as ads that might encourage you to 'buy our gemstone, it's going to be the new diamond'. Or 'our baseball cards are first edition and guaranteed to go up in value', etc.
That's not an endorsement of any asset in the crypto space, and I would never remotely suggest that any token today is guaranteed to go up in value.
This is not true for deflationary currency...like Bitcoin.
It's the basis of the financial industry: You can make X using your own money, but you can make X+n using other people's money too.
So would 99.9% of people who see that ad. Everyone knows that if it sounds too good to be true, then it likely is. Especially in a paid advertisement. Modern consumers are more than well atuned to not trust every ad they hear.
If they don't see the glaring risk in cryptocurrencies, as it is constantly mentioned as being in the media nearly every time it's mentioned, or if they didn't spend a minute Googling them to see the countless headlines about it's volatility before gambling on it then I really wonder whether their money would be going to a place of value elsewhere anyway.
Otherwise plenty of people know the risk and are still willing to bet on it because it is possible to gain quite a bit from the growth. I know many people who have successfully. And many who are in it for the long term because they fully believe in the technology. And there's nothing wrong with that.
It's a bit like how poorly written spam makes professional-looking phishing look more convincing to the average person.
The most effective scams are the ones that fool people who think they couldn't have been fooled. Heck, you see it all the time with car advertisements, etc.
Only if something has buyers does it have value, this is true with finance scams as well as real world over0valued items.