The crypto space is new and unregulated, so collecting funds from retail investors via direct contributions is fast, easy, and profitable. Whenever money comes in these three flavors, scams are an immediate side effect.
Websites, white papers and roadmaps can be pulled out of thin air, so many have. Confido, Prodeum and LoopX are just a few of the projects that disappeared with millions of people’s dollars and even legit projects, like Tezos, can get stuck in frozen funds hell.
But the most interesting ICO of 2017 was neither a scam, nor did it promise a great future.
In fact, it was a completely useless project. Literally.
The Value Of Radical Honesty
Right around the time ICO funding peaked to its new all time high, an innocuous looking website was submitted to a cryptocurrency subreddit. Useless Ethereum Token promised to be “The world’s first 100% honest Ethereum ICO.” With a mix of comedy, honesty, and transparency, the creator explained his ‘vision:’
“You’re going to give some random person on the internet money, and they’re going to take it and go buy stuff with it. Probably electronics, to be honest. Maybe even a big-screen television.
Seriously, don’t buy these tokens.”
What’s more, thanks to a fully functional smart contract, the ICO went off without a hitch, raising 310 Ether, or $62,000 at the time. Unless the creator actually spent all the funds on TVs, he’s now sitting on almost $300,000.
A friend recently told me this story and for a while, like him, I wondered why anyone would so blatantly throw their money out the window. But that’s not what the contributors did. They donated money to someone they could trust.