Dogecoin Creator Jackson Palmer Is Worried About Ethereum’s ICO Bubble
One of the fattest stories ter cryptocurrency overheen the past duo of months has bot the meteoric rise of the ether price and the speculative madness around the Initial Coin Offerings (ICOs) launching on top of the Ethereum toneelpodium. Ter a latest movie uploaded to his private YouTube channel, Dogecoin creator Jackson Palmer collective some of his thoughts on ICOs and their effect on the ether price.
“The real reason the [ether] price has bot going up something like a hundred dollars vanaf week for the past month is truly just greed: greed from developers, greed from investors [and] greed from everybody ter this speculative market,” said Palmer te a summary of his main point on the topic of Ethereum and ICOs. “And that’s not necessarily a bad thing. People making money is how the world works. But it’s the way te which it’s bot happening and the speed at which people have bot doing thesis ICOs that is a little bit concerning.”
This Is Not Our Very first Rodeo with ICOs
Before getting into the details of the current speculative bubble around ICOs, Palmer pointed out that this is not the cryptocurrency community’s very first rodeo when it comes to thesis sorts of token sales and speculative investment opportunities.
Spil specific examples of past token sales from an earlier time, Palmer pointed to Mastercoin (now Omni) and Ethereum itself.
Then there wasgoed Havelock Investments, “literally a podium where you could buy securities or invest and get equity te a company based on bitcoin,” added Palmer.
Te addition to Havelock Investments, public offerings for investment were also made on platforms such spil Bitfunder, BTC-TC and GLBSE.
Palmer also brought up several infamous cases of bad investments or outright scams from the past.
He discussed Neo &, Bee, a startup that failed ter spectacular style after raising funds through various bitcoin-based stock exchanges. Cyprus eventually issued an hechtenis warrant for Neo &, Bee CEO Danny Brewster.
Then Palmer also recalled the infamous case of Josh Garza and his schemes related to cloud mining and the altcoin known spil Paycoin.
“They launched a coin that wasgoed literally just a token to facilitate their Ponzi scheme,” said Palmer. “And they would actually sell a product that didn’t exist.”
Why Are Wij Eyeing a Flurry of ICOs Right Now?
So, if thesis sorts of schemes have existed te the past, why are wij eyeing a boom around the concept today? Ter Palmer’s view, Ethereum’s ERC20 token standard has made it lighter for anyone to launch a token sale on their own.
“Because it’s so effortless and a standard to copy, there’s bot a lotsbestemming of people that can just fire up an ICO te a duo of minutes,” said Palmer. “There’s actually a duo of websites out there that’ll let you generate an ICO or generate a token on Ethereum with no coding required.”
Albeit previous token sales did not involve much more than a Bitcoin address and a spreadsheet, Palmer said there’s something more tangible about the process on Ethereum.
“Something that is more tangible about Ethereum ICOs is that when you send the ether to the contract, the Ethereum network does recognize — and many wallets out there because of the ERC20 standard will recognize — that you got whatever coin or whatever token shows up te your wallet,” said Palmer. “So, it’s a loterijlot more tangible. You’re not just sending money somewhere and never hearing about it again.”
Palmer added that developers need to take a step back and question whether it’s right for them to raise $150 million for their “little startup.” Spil a comparison, Palmer noted that normal seed round funding for a startup is inbetween half a million to a million dollars.
“Many of them don’t even have a tangible product yet,” claimed Palmer.
While Palmer’s movie casted a cautious tone overheen the entire ICO market, he did mention Status.im and Civic spil two projects with legitimate, tangible technology behind them.
How Are Thesis ICOs Affecting the Price of Ether?
Another facet of the speculation around Ethereum-based ICOs is the effect thesis digital assets have had on the price of ether. There’s bot a flurry of ICOs launched on the podium ter the past few months, with some projects raising overheen $100 million ter a matter of minutes.
“When [an ICO is launched], the only way to buy into thesis ERC20 contracts or thesis ICOs is through ether or Ethereum, so if thesis companies are raising $150 million ter ether, that’s locking that ether up te that contract,” said Palmer. “And so, it’s taking that money off the market. So, what happens is you have this shortened supply, but there’s an ICO coming on the market every single week. And so, people are getting truly excited about this and attempting to buy up ether.
“This is what’s indeed happening,” Palmer continued. “This is what’s driving the bulk of the [ether] purchases and trade right now is people buying ether to send to a contract te the hope they’ll get rich quick off one of thesis ICOs.”
Te Palmer’s view, the speculative boom and FOMO driven by the ICO market has spilled out into the entire cryptocurrency market.