icos are bad.
- One person can't know it all.
Part of the problem is that ICOs pay all the money at once for a huge project made of many little pieces. Giving one individual financial responsibility for so many diverse things is unreasonable. There is no way for them to make educated decisions for so many things.
It would be better if each goal had different people taking responsibility. Lots of micro-apps that cooperate is better than a giant unified system. It is good for software development too see "The Cathedral and the Bazaar".
- Investors are powerless
Another problem is that the investors have so little control in what is done with their money. With ICOs the investors are trusting the corporation's owner to spend the money wisely. It would be better if each little goal of the project raised money seperately, that way investors could know where their money is going. That way investors only invest in the technology that would actually benefit them. Bundling goals together into a single ICO is economically bad the way bundling any products for sale is bad.
- with an ICO, the company owners are spending money for the investors.
If you spend your own money on yourself, you will care about cost and quality. If you spend someone else's money on yourself, you only care about quality. If you spend your own money on someone else, you only care about cost. If you spend someone else's money on someone else, you don't care about cost or quality.
If each person was spending their own money, it would be much more efficient.
- ICOs encourage violence
Someone, or some group of people own the company. This is the person who has control of all the money raised. Everyone has to stay on their good side, or else risk losing their jobs. The person who owns the corporation can get away with crimes. He has a legal team ready to sue anyone who criticizes him or his corporation. The owner is holding all his employees as hostages. If you blow the whistle on his crimes, then everyone loses their jobs. Which means all the people you have been working with on a daily basis would hate you.
The investors of the ico didn't intend to create a monster. They were investing in a product, not in an individual. The employees don't want to deal with an abusive boss. They just wanted secure employment in the exciting blockchain industry.
Most instances of these sorts of abuses are never known publicly. The owner can make all his employees sign contracts to agree to never talk about what happens on the job. The owner can offer bribes, to pay people to never mention his crimes.
Part of the problem is the hierarchy of the modern corporation. Money flows downward through a pyramid. The hierarchy happens because this is the easiest way for the government to interact with the economy. Teaming up into corporations limits legal liability of the employees, and reduces cost of legal compliance.
Blockchain offers a way to circumvent government.
- ICOs are not sustainable.
The money raised from an ICO decreases over time. If the project is successful, then the financial demands for development would increase over time.
- Blockchain can save us!
I propose an alternative way to raise money and pay workers to create new technology. We can use smart contracts to get rid of the middle man. So the money moves directly from the people who want technology to the people who create it. This method solves all the problems described above. Dominant assurance contracts, which I wrote about here.