Fools and their crypto

What should we do about token sales?

Two days ago a Lithuanian “company” called Prodeum looked like a promising if silly blockchain startup. Their stated goal? To track every piece of food on the Internet. While I doubt many of us will care about the exact provenance of the orange we just ate, we could see, in some distant future, a need for this sort of tracking.

After all, the blockchain is the future. Fund it well and let it lead the way.

Prodeum checked all the boxes. They had a sharp team, a whitepaper written mostly in English, and some excited fans:

In other words, Prodeum followed the token sale playbook from beginning to end. They created two tokens, one for funding the company and one for paying within the “network.” They created a credible white paper that, at the very least, tickled some of the neophilic nerves, and they had an active, if scammy, social media presence. That is literally all you need to run an ICO these days and they did exactly as expected.

Then the whole thing imploded.

On the 28th the scam shut down, leaving a website containing a single word: penis. It is a tale for the ages, similar in scope to that one song about the One Tin Soldier.

In this case what did they find on the bloody morning after? Penis. That, friends, is the long and the short of the modern token ecosystem.

This post on the 27th [WARNING: NSFW], purportedly by the scammer, explains things a bit more clearly:

I hope you guys understand and I hope you’ll accept my apology. They were babyscams and I only made like $50,000 off of you guys in the last month. That’s a forgivable amount, right? I mean, there are millions on here. I just want to announce my resignation and that I won’t be making any more shitty scam sites anymore. It all started with tony dumper and satoshibox and I jumped for joy at my first $100 made from scamming. I sang to myself when I made my first $10,000 with bitflur..and Magnalis made me a lot. I put zero effort into prodeum though and that’s where I know to stop. I only made $3k on prodeum and I consider that a failure. Plus I shit the bed with the scam team too early.

“Remember that all ICOs are scams,” he writes in closing. The scam Ethereum wallet is currently empty and contained a maximum of $2,000. Not many were hurt in this particular scam but, as these things become more popular and things like this happen over and over again, I worry about the token sale space.

We are killing the very thing that will save startups in the next decade. And we’re sitting blithely by while idiots ruin it for the rest of us.

from TechCrunch