What is now referred to as an ICO was a couple years ago referred to as a premine and a scam to avoid. I do hope new people take great caution. They are not all scams, but they inherently can't be trusted because they lack decentralization.
This is not an article about ICOs being launched with unsustainably high market caps. Its not about promises of function that either don’t exist or serve no useful purpose.
This is simply about how an ICO is launched. There are 2 VERY distinct ways an ICO can happen: a dev premine, or a DAO equivalent. Dev premine is where the developer of the coin creates the entire coin supply, investors send the developer money (BTC, ETH or whatever), developer then distributes the newly created coins to investors. 99% of ICOs work that way….DAO is the same procedure, but instead of a human being doing the distribution, an automated piece of software runs the distribution of coins.
A person collecting the investment funds and distributing vs a robot no one can touch doing it.
The robot no one can touch is authentically decentralized. Bitcoin is essentially a robot no one can touch; its functions are locked in and can't be changed. A DAO robot that collects the funds for an ICO, and then distributes the new coin is similarly decentralized. If no human has control of it, it is decentralized.
Decentralization is not just a buzz word for people with political interest in cryptos. Decentralization is at the heart of why cryptos exist. If Bitcoin and other decentralized projects did not exist, Ripple, ICOs and other centralized projects would not exist. The government would shut them down. Currencies not attached to the state have risen many times, they are always shut down eventually if they become an economic threat. Bitcoin cannot be shut down because it has no developer who runs it, no company who owns and created it. Legally, there is no one to go after at the head of bitcoin (and other fully decentralized coins).
With ICOs and Ripple etc, that is not the case. Regulation is coming. The mainstream is gaining interest. Governments will want to have a say and some control. When that happens, which coins would you rather have: centralized or decentralized? Centralized coins have offices, staff, records, patents, massive amounts of coin supply, control over sensitive features. Centralized coins can be shut down and taken over. . .Decentralized coins have none of that and its difficult/impossible to even guess who owns supply as its spread anonymously around the world.