This is really complicated.

Let's say that I decide to run an ICO. I don't know what the hell I'm doing, but I hear all these people making huge money and moving to islands that won't extradite me back home to face charges. So, I clone Litecoin, fire up an editor and GregCoin is born.

GregCoin is a utility coin. You see, I'm really good at telling people to fuck off in eloquent ways. In fact, I'm world class. My token grants the bearer the significant privilege of being told to fuck off in an eloquent way.

ICOs are completely unregulated, so I don't have an underwriter to make sure that everything is on the up and up. And that's good because seriously, if I wrote you a cheque, there's a very real danger that it would bounce so high it would make a skylight where there was no skylight before. But you don't know that - nobody knows that so it isn't relevant.

Good ICOs are transparent, so I'm very transparent. I have accounting statements but they're not completed with GAAP/IFRS so you can't compare them to any other ICO. This is also something that would make an underwriter run away, but fuck underwriters! We need a completely unregulated store of value because financial regulators treat us like we're all stupid. Besides, my whole business model revolves around nobody discovering that I'm full of shit. It would be really hard to do that if the numbers were true. To The Moon!

Nobody knows who I am and GregCoin is really really stupid. Is being told to fuck off in an eloquent way a sustainable basis for a currency? But, holy fuck, since Bitcoin, there are many people out there who want to brag about 1000x returns. So, it likely doesn't really matter if my token is stupid and provides no real utility. All I need to do is show that there is a lot of demand so all you need to do is get in on the Very Exclusive ICO, watch GregCoin go To The Moon and sell when it hits $5,000.

I need to look more legit than I am, but thankfully, that's not too hard. I buy 25,000 Twitter followers, hire a very good designer to build out my website and hire a small army of ghost writers to make me look smrt.

Then, I hire a small army of influencers, some real, some imagined. For some, I plead to their ego. You're a genius crypto analyst and I've been reading your analysis for ages. Can I hire you as an advisor in exchange for x tokens? Please, oh great crypto genius? For others, I hop onto Fiverr and buy spammers. Who cares? I just have to show demand, not intelligent life.

Now that I've paid, demand is hopping, so I do a special pre-sale to reward my earliest adopters. The ICO was going to be 1.5 million tokens at $5 USD each, but my special early adopters have done such an amazing job building an amazing community and creating something revolutionary that I want to put some tokens out asap. So, I decide to release 250,000 @ $2.5. This means you get an instant 100 percent return when the real ICO happens! Double your money, guaranteed.

Those 250k token sell quickly. I run the exchange they're sold on, so I get money for tokens, plus service fees but you don't know that. Also, you technically don't know if any of those tokens even sold for actual cash money because, again, I run the exchange (through a complicated series of shell corporations) and its customers' privacy is very important because of GDPR.

Turns out that the exchange is a colossal piece of shit. There is a key in localStorage called 'role' and if you change that value to 'admin', you can access everything. But my customers don't know that. I don't even know that. Hell, I paid my developers $250 on upwork. For that kind of money, they should know how to build secure applications. Ironically, the criminals who discover that are the most ethical administrators on the entire exchange, but if they got caught, there's a real possibility they'd serve more time than me if I got caught.

Then, three weeks before the ICO, I clone Litecoin again and GTcoin is born. GTcoin provides a wonderful compliment to GregCoin. GTcoin grants the bearer the privilege of being told he/she is a financially illiterate shithead.

Since they're complimentary tokens, I give out two GTcoins for every GregCoin. My early adopters go wild. Not only did they get pre-ICO action that guarantees they'll double their money, but they got two free tokens that are going To The Moon for every one GregCoin they have. That's gotta count as a 250% return. Does Warren Buffett get 250% returns in two weeks? No, he's a tool of the corrupt, hyper-regulated system. Only my genius investors saw the opportunity and got in early.

Now, I don't even need to pay people to promote my shit. My early adopters are so eager to show how smrt they are that they blow up their Twitter/Facebook feeds with news about the ICO. To the fucking moon!!

Then, my ICO hits. I take the money, move to Wontextraditemeistan, and do copious amounts of cocaine with hookers until I die of syphillis. The tokens are fucking worthless because the utility is provided by an empty shell of lies. There may have never been any real demand at all, or maybe the coin trades, and early investors find greater fools to take them to the moon. Who knows and frankly, who cares? My tokens did what they set out to do. Anyone who still owns them has been told to fuck off in an eloquent way and they are financially illiterate shitheads.

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Now, imagine that I'm running the same ICO, but this time I'm honest. My token provides real utility and I know what I'm doing. My financials are solid. My organization is solid. This ICO is legitimate.

Would anyone even know that second ICO exists? What kind of detective work would it take to unearth that ICO #1 is bullshit? How well does that even scale?

That's a beautiful thing about regulation. At least with public companies, I can read their audited financials and compare competitors because they were prepared with the same rules. And, I can trust that the exchanges give every investor relatively fair access to market data.

If you're looking to value an ICO, I think the first step has to be to vet the team and all its claims about both past and future. But, realistically, if you do that five years ago, would you buy Bitcoin??