'ICOs Are Dead... Long Live ICOs!' - from Beyond Blocks Bangkok

‘ICOs Are Dead… Long Live ICOs!’ – from Beyond Blocks Bangkok

To paraphrase Mark Twain: reports of the death of initial coin offerings (ICOs) are greatly exaggerated. Or at least, the industry is drawing a clear distinction between the “bad” ICOs of the past and those of a (hopefully) brighter future. It’s a hope for something similar to the reborn web economy post-2000, where new blockchain token projects are more useful, better managed, and more accountable to investors.

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Beyond Blocks Bangkok 2018

At Beyond Blocks Bangkok, Attendees See a Phoenix Rising from the ICO Ashes

Conditional optimism seems to be the general sentiment among attendees and presenters at Beyond Blocks Summit Bangkok, which kicked off Monday morning local time.

What does “conditional optimism” mean? Given the plunging wider crypto market of the past few weeks, it might seem like the worst possible time to talk about ICOs. However most at the event see it as an opportunity to “cleanse the system” of bad/incompetent actors, and usher in a new era of professionalism and better ideas.

Beyond Blocks Bangkok 2018

Beyond Blocks, despite being a token investment-focused event series with high production values, is definitely not into ICO cheerleading. Speakers come from the financial, government and technology investment worlds as well as blockchain startups, aiming to inject common sense and experience into proceedings.

Despite organizers mildly downplaying expectations for the event thanks to current conditions, Beyond Blocks Summit Bangkok appeared well-attended with few empty seats in the main auditorium, a busy exhibition space, and plenty of industry media attention.

The general sentiment on “token investing” at the event was: whether we continue to call them ICOs, token-generation events, token sales, STOs or something completely new and more marketable, the concept is here to stay.

Justin Chow of Cumberland and Gabriel Yang of Beyond Blocks
Justin Chow of Cumberland and Gabriel Yang of Beyond Blocks

Manage Risks, Don’t Take Risks

In a “State of Blockchain” fireside chat with Beyond Blocks CEO Gabriel Yang and money manager Justin Chow of Cumberland, Chow warned potential investors (and blockchain projects themselves) against diving blindly into the hype.

Don’t take overly-leveraged positions or expose yourself to too many risks, Chow said. He added that he knows of several large and reputable institutional investors who are keen to enter the blockchain/token space, but are waiting for greater clarity.

“The space keeps changing… it doesn’t fit asset managers’ model just yet,” he said. Bad press like poor management, outright scams, and ill-conceived but overly-hyped blockchain projects had probably slowed the influx of large institutional money — but only by about 6 to 12 months.

Beyond Blocks Bangkok 2018

Regulation was key to improving the model, he added, while telling retail investors to focus on risk management more than risk-taking. “I want to mitigate risks so there’s potential for higher profits in the future.”

Blockchain and distributed ledger technology still holds a lot of promise, whether it’s for crowdfunding or portable identity platforms, Chow said. He gave the example where his own bank rejected his credit card application due to insufficient proof of address — even though bank records themselves are regularly used for such proof.

The idea of “security tokens” also interested him, he said, or other tokens that represented ownership of something tangible, like real estate.

ICOs dead panel at Beyond Blocks Bangkok 2018
Abasa Phillips of Zilla (L) speaks on the “Death of an ICO” panel

ICOs Are Dead – Except, They’re Not Really

Their talk was followed by a panel discussion titled “Death of an ICO”. Though it was intended as a debate on whether or not the ICO concept was finished, both sides generally agreed — a certain breed of ICO was dead, but their death was necessary for the concept to prosper.

Roland Yau, managing partner at CoCoon Ignite Ventures L.P., complained the term “ICO” itself was misleading: “it’s obviously a play on IPO, from a legal standpoint,” he said, saying it created similar expectations from investors and regulators.

He referred to ICOs as “a mostly fraudulent way of raising capital” outside existing regulatory frameworks, which had actually slowed down crypto adoption and seen thousands of naive investors lose money in pump-and-dump schemes with little accountability on project leaders’ part. This would have to change. Investors need to know project leaders are using the money they raised in responsible ways, and why the project is even raising money.

Serial entrepreneur Moaffak Ahmed of Slush was more blunt: “We need to weed out this… crap — I think that’s the technical term — to get to the good stuff,” he said, adding that the technology itself doesn’t make him skeptical at all.

Abasa Phillips, CEO of ICO platform and token wallet app Zilla, said his company had received over 350 applications from blockchain-based products — but had accepted only about 45-50 of them.

“Some of them were all over the place; a mess quite frankly… now we’ve seen the market shake out the BS.”

Phillips agreed the term “ICO” was misleading, though no more than other real-world surrogates that helped people grasp blockchain concepts — like “mining”. He described ICOs as “crowdfunding — like Kickstarter on the blockchain”, and added that he’d grown to appreciate the concept after starting out as a Bitcoin maximalist.

Zilla now has plans for tokens that have other uses, or “point coins” which functioned as event tickets with added functionality like entries in competitions, and booth giveaways.

Cryptomatic at Beyond Blocks Bangkok 2018

Oh, and Beware of ‘Blockchain Advisors’

Phillips also warned against companies paying excessive amounts of money to “blockchain advisors” and other self-styled expert consultants. The concept was too young and its rules unclear for anyone to legitimately sell their services as an expert, he said.

“People have always gravitated towards these ‘advisors’. Anyone can put ‘blockchain advisor’ on their LinkedIn profile — it’s the blind leading the blind.”

Justin Chow summarized the overall mood by saying “There’s no right or wrong answer to the question ‘Are ICOs Dead?’ With any new technology, the first form is never its final form.”

Do you think ICOs are “dead”? Is it a legitimate question to ask? Let’s hear your thoughts in the comments.


Images via Bitsonline, Jon Southurst

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