There is something very wrong with ICOs. Not with the model itself. After all it replicates the IPO, which provides the medium for a potential win-win. What is wrong is entirely related to the assumed token value.
That is the exact same, frequently non-existent, backed by JavaScript token you are getting in exchange for your hard currency - BTC, ETH or DASH. So by participating in an ICO, essentially you are:
- buying shares in a non-existent entity,
- hoping for the best,
- getting tokens, which in the general case should have value only in the context of the entity, not be paired with crypto or fiat money,
- (and let's face it ) hoping that this next token will actually go straight for the moon and replicate BTC's rise.
One more big thing - tokens are getting listed on exchanges daily. Many times without the ICO organizers backing this listing. So if the ICO is promising to list its token(currency) on an exchange - it may already be somewhere, being traded. This is dangerous.
In fact, very few ICOs have explicitly stated that the tokens one is buying are worth peanuts and at this early times serve only as representation of your stake in the entity. All in all, the next one to three years will be rigged with anticipation - which ICO-funded project will actually succeed and provide the better technological solution.
That's my two tokens on ICOs.
Happy hoping,
Chris