{"id":23602,"date":"2017-06-21T16:49:54","date_gmt":"2017-06-21T16:49:54","guid":{"rendered":"http:\/\/ci027cfe65f01126c3"},"modified":"2017-06-21T16:49:54","modified_gmt":"2017-06-21T16:49:54","slug":"dogecoin-creator-jackson-palmer-concerned-about-ethereums-ico-bubble","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/business\/dogecoin-creator-jackson-palmer-concerned-about-ethereums-ico-bubble","title":{"rendered":"Dogecoin Creator Jackson Palmer Is Concerned About Ethereum\u2019s ICO Bubble"},"content":{"rendered":"
<\/div>
<\/figure>\n

One of the biggest stories in cryptocurrency over the past couple of months has been the meteoric rise of the ether price and the speculative frenzy around the Initial Coin Offerings<\/a> (ICOs) launching on top of the Ethereum<\/a> platform. In a recent video uploaded to his personal YouTube channel<\/a>, Dogecoin<\/a> creator Jackson Palmer<\/a> shared some of his thoughts on ICOs and their effect on the ether price.<\/p>\n

\u201cThe real reason the [ether] price has been going up something like a hundred dollars per week for the past month is really just greed: greed from developers, greed from investors [and] greed from everybody in this speculative market,\u201d said Palmer in a summary of his main point on the topic of Ethereum and ICOs. \u201cAnd that\u2019s not necessarily a bad thing. People making money is how the world works. But it\u2019s the way in which it\u2019s been happening and the speed at which people have been doing these ICOs that is a little bit concerning.\u201d<\/p>\n

This Is Not Our First Rodeo with ICOs<\/h3>\n

Before getting into the details of the current speculative bubble around ICOs, Palmer pointed out that this is not the cryptocurrency community\u2019s first rodeo when it comes to these sorts of token sales and speculative investment opportunities.<\/p>\n

As specific examples of past token sales from an earlier time, Palmer pointed to Mastercoin (now Omni<\/a>) and Ethereum itself. <\/p>\n

Then there was Havelock Investments<\/a>, \u201cliterally a platform where you could buy securities or invest and get equity in a company based on bitcoin,\u201d added Palmer.<\/p>\n

In addition to Havelock Investments, public offerings for investment were also made on platforms such as Bitfunder, BTC-TC and GLBSE.<\/p>\n

Palmer also brought up several infamous cases of bad investments or outright scams from the past.<\/p>\n

He discussed Neo & Bee<\/a>, a startup that failed in spectacular fashion after raising funds through various bitcoin-based stock exchanges. Cyprus eventually issued an arrest warrant for Neo & Bee CEO Danny Brewster<\/a>.<\/p>\n

Then Palmer also recalled the infamous case of Josh Garza<\/a> and his schemes related to cloud mining and the altcoin known as Paycoin<\/a>.<\/p>\n

\u201cThey launched a coin that was literally just a token to facilitate their Ponzi scheme,\u201d said Palmer. \u201cAnd they would actually sell a product that didn\u2019t exist.\u201d<\/p>\n

Why Are We Seeing a Flurry of ICOs Right Now?<\/h3>\n

So, if these sorts of schemes have existed in the past, why are we seeing a boom around the concept today? In Palmer\u2019s view, Ethereum\u2019s ERC20<\/a> token standard has made it easier for anyone to launch a token sale on their own.<\/p>\n

\u201cBecause it\u2019s so easy and a standard to copy, there\u2019s been a lot of people that can just fire up an ICO in a couple of minutes,\u201d said Palmer. \u201cThere\u2019s actually a couple of websites out there that\u2019ll let you generate an ICO or generate a token on Ethereum with no coding required.\u201d<\/p>\n

Although previous token sales did not involve much more than a Bitcoin address and a spreadsheet, Palmer said there\u2019s something more tangible about the process on Ethereum.<\/p>\n

\u201cSomething that is more tangible about Ethereum ICOs is that when you send the ether to the contract, the Ethereum network does recognize \u2014 and many wallets out there because of the ERC20 standard will recognize \u2014 that you got whatever coin or whatever token shows up in your wallet,\u201d said Palmer. \u201cSo, it\u2019s a lot more tangible. You\u2019re not just sending money somewhere and never hearing about it again.\u201d<\/p>\n

Palmer added that developers need to take a step back and question whether it\u2019s right for them to raise $150 million for their \u201clittle startup.\u201d As a comparison, Palmer noted that normal seed round funding for a startup is between half a million to a million dollars.<\/p>\n

\u201cMany of them don\u2019t even have a tangible product yet,\u201d claimed Palmer.<\/p>\n

While Palmer\u2019s video casted a cautious tone over the entire ICO market, he did mention Status.im<\/a> and Civic<\/a> as two projects with legitimate, tangible technology behind them.<\/p>\n

How Are These ICOs Affecting the Price of Ether?<\/h3>\n

Another aspect of the speculation around Ethereum-based ICOs is the effect these digital assets have had on the price of ether. There\u2019s been a flurry of ICOs launched on the platform in the past few months, with some projects raising over $100 million in a matter of minutes.<\/p>\n

\u201cWhen [an ICO is launched], the only way to buy into these ERC20 contracts or these ICOs is through ether or Ethereum, so if these companies are raising $150 million in ether, that\u2019s locking that ether up in that contract,\u201d said Palmer. \u201cAnd so, it\u2019s taking that money off the market. So, what happens is you have this shortened supply, but there\u2019s an ICO coming on the market every single week. And so, people are getting really excited about this and trying to buy up ether.<\/p>\n

\u201cThis is what\u2019s really happening,\u201d Palmer continued. \u201cThis is what\u2019s driving the bulk of the [ether] purchases and trade right now is people buying ether to send to a contract in the hope they\u2019ll get rich quick off one of these ICOs.\u201d<\/p>\n

In Palmer\u2019s view, the speculative boom and FOMO driven by the ICO market has spilled out into the entire cryptocurrency market.<\/p>\n

Watch the full video here:<\/p>\n

https:\/\/www.youtube.com\/watch?v=9bGQfYwfIlA<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The one of biggest stories in cryptocurrency is the speculative frenzy around the Initial Coin Offerings (ICOs) launching on top of the Ethereum platform.<\/p>\n","protected":false},"author":3445,"featured_media":23603,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[3112,3240,705],"class_list":{"0":"post-23602","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-dogecoin","9":"tag-icos","10":"tag-scaling"},"author_data":{"id":3445,"name":"Kyle Torpey","nicename":"kyle-torpey","avatar_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/12\/kyle-torpey-promo-image-96x96.jpg"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/dogecoin-creator-jackson-palmer-is-concerned-about-ethereums-ico-bubble.jpg","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/23602","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/3445"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=23602"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/23602\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/23603"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=23602"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=23602"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=23602"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}