The meteoric rise in ether price and the speculative frenzy surrounding Initial Coin Offerings (ICOs), which launched on top of Ethereum, has been one of the most significant stories in cryptocurrency. Jackson Palmer, creator of Dogecoin, shared his thoughts on ICOs as well as their impact on the ether price in a video that he uploaded to his YouTube channel.

Greed

Palmer summarized his main points on Ethereum and ICOs by saying that the real reason why the [ether] price has gone up about a hundred dollars per semaine for the past month was really just greed: greed of developers, greed of investors [and] greed of everyone in this speculative marketplace.” “And that’s not necessarily bad. The world works because people make money. It’s the speed and manner in which this has been happening that is a bit concerning.

Rodeo With ICOs

This is Not Our First Rodeo With ICOs. Palmer warned that the current speculative bubble surrounding ICOs is not the first time the cryptocurrency community has encountered these types of token sales or speculative investment opportunities.

Palmer cited Mastercoin (now Omni), and Ethereum as examples of token sales in the past.

Palmer added that Havelock Investments was “literally a platform where one could buy securities or invest in and get equity in a bitcoin-based company.”

Public offerings for investment were made on platforms like Bitfunder, BTC-TC, and GLBSE in addition to Havelock Investments.

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Frauds

Palmer also mentioned several notorious cases of outright frauds or bad investments from the past.

He spoke about Neo & Bee, a startup which failed spectacularly after raising funds via various bitcoin-based stock markets. Danny Brewster, Neo & Bee CEO, was eventually arrested in Cyprus.

Palmer also spoke out about the notorious case of Josh Garza, who was involved in cloud mining and the altcoin Paycoin.

Palmer said that the coin was “literally just a token to facilitate their Ponzi scheme.” “And they would actually be able to sell a product which didn’t exist.”

Flurry of ICOs

Why are we seeing a flurry of ICOs right now?

If these types of schemes existed in the past, then why is there a boom today? According to Palmer, Ethereum’s ERC20 token standards has made it easier for anyone in the world to start a token sale.

Palmer stated that it is easy to create an ICO and can be copied by many people. There are a few websites that will allow you to generate an ICO or token on Ethereum without any coding.

Palmer stated that although previous token sales were limited to a Bitcoin address and spreadsheets, there is something tangible about the process for Ethereum.

Palmer stated that Ethereum ICOs are more tangible because the Ethereum network recognizes that you have any token or coin that shows up in your wallet when you send it the ether. It’s tangible. You aren’t just sending money and never hearing back about it.”

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Palmer said that developers should take a step back to consider whether it’s right to raise $150 million for their “little startups.”

Palmer stated that many of them don’t even have a tangible product.

Palmer’s video was cautious about the entire ICO market. However, he did mention Status.im, Civic, and other projects that have tangible, legitimate technology behind them.

Price of Ether

How do these ICOs affect the price of Ether?

Another aspect of speculation surrounding Ethereum-based ICOs refers to the impact these digital assets have on the price of ether. In the last few months, there has been a flurry in ICOs on the platform. Some projects have raised over $100 million in a matter minutes.

Palmer stated that ICOs are only available through ether or Ethereum. If these companies raise $150 million in ether that would lock that ether up in the contract. It’s taking money from the market. This is what happens: you have a shortened supply, but every week, an ICO comes on the market. People are excited about this and want to buy ether.