<p>From a investors perspective, : You buy them because you speculate that the tokens will go up in value over time, as the company behind it develops the usecase of said "Product/Token".</p>

<p>Or, because they suspect that the Token/Coin/Blockchain will get adapted by alot of people/users, and used as a Currency.  </p>

<p>For example, Ethereum.</p>

<p>It was first launched as an ICO, and collected ~$17.3M USD (24000 bitcoin at the time.).</p>

<p>Almost nothing worked when it was first launched, but the coin/token developed over time, adding more features such as the  smart contracts, all the apps build on Ethereum, and resolving many other issues.</p>

<p>Thus it became more popular, and was used more, and value went up.</p>

<p>(Ethereum currently has a ROI of ~85714.2857143%, if you kept holding since the ICO.)</p>

<p>This is why ICO's are hyped up so much currently, which is both bad and good.</p>

<p>There's token sales for anything you can think of, "decentralized this, decentralized that", you have to ask yourself how legit that is, and if it is worth investing your time and money in, because afterall, it is still a huge risk.</p>

CC BY-SA 3.0
2017-09-12T06:19:58.917Z
Ok, that makes more sense. Would you care to elaborate in your answer? Maybe give an example?
Martin Wickman
CC BY-SA 3.0
2017-09-12T15:38:08.817Z
Done. Hope this eleborates it a bit more.
Zacharin
CC BY-SA 3.0
2017-09-11T19:29:54.130Z
2017-09-12T15:01:30.847Z
2017-09-12T15:01:30.847Z
Zacharin
<p>Do crypto-coins themselves (bitcoin, litecoin, ethereum and 100500 other shitcoins) generate dividends? :))))))))</p>

<p>the answer is: ponzi pyramid scheme. point.</p>

CC BY-SA 3.0
2017-09-11T15:29:19.613Z
Well, the perceived value of BTC is that it *could* possibly be useful in the future for buying stuff (ie replacing fiat). So I see the potential for value here at least.
Martin Wickman
CC BY-SA 3.0
2017-09-11T17:37:54.097Z
so your answer is "ponzi pyramid scheme. point." Those are not even sentences. Are you saying that bitcoin/eth should be grouped in with ICOs?
weston
CC BY-SA 3.0
2017-09-11T19:15:24.273Z
of course. bitcoin/altcoins/ico/tokens/etc - are the similar things. you buy something and should wait for the next buyer to sell him your "digits" for higher price. people involved in pyramid are very angry listening this, because they are afraid about their "inversments". so they downvote the truth answers
amaclin
CC BY-SA 3.0
2017-09-12T11:14:02.433Z
I downvoted because it's a poor answer. I'm surprised a user with your rep actually believes this, but I would respect it, even upvote it if you gave some body to back up your answer. As it is, I don't think you know what those terms mean. In a Pyramid scheme, your personal income relies on recruitment, that's not the case with any coins. In a Ponzi scheme, returns are given from new investors to old investors, which is closer, but no one is promising or dishing out returns here and transactions are completely transparent on the blockchain, a Ponzi relies on hiding the source of the returns.
weston
CC BY-SA 3.0
2017-09-12T11:15:11.650Z
That said, 99% of ICOs are scams IMO. Not anything as elaborate as Ponzi or Pyramid, just a simple grab and run.
weston
CC BY-SA 3.0
2017-09-12T11:22:43.610Z
"...a user with your rep actually believes this..." - this is wrong. You BELIEVE in opposite thing but I have proofs :) because I have knowledge in this area
amaclin
CC BY-SA 3.0
2017-09-12T11:32:32.037Z
I mean you hang around, being a valuable contributor in what you regard as a scam. That I find odd, a contradiction. But anyway, please do elaborate on the proofs in the answer.
weston
CC BY-SA 3.0
2017-09-11T13:51:36.643Z
2017-09-11T13:51:36.643Z
amaclin
<p>The only reason to buy a currency is you think you'll be able to buy stuff with it in future, or sell it for more than you bought it in future. If you invest in an ICO, it should be on the hope there's a viably large future group of people trading it. 
In one way, investing in cryptocurrencies is like investing in gold. The big difference is there's only one gold - but new cryptocurrencies are popping up every week. 
I've seen ICOs marketed as "bitcoin for dentists". This puzzles me. Most dentists I know use the same money as everyone else. </p>

CC BY-SA 3.0
2017-09-11T21:12:19.357Z
2017-09-11T21:12:19.357Z
tom
<p>By buying ICOs you do not buy a part of a company or similar. You are buying a part of a product of the company, thereby <strong>helping the company to further develop</strong> this product.<br>
You invest in the <em>technology</em>* of the ICO.<br>
If you think the <em>technology</em> is better than the <em>technology</em> used by BTC, ETH, ... in some way and you think it is good enough to become a solid Altcoin or even good enough to replace some of the big ones, you invest in it because you <strong>expect its value to rise</strong>.</p>

<p><em>*technology: better block size, POS instead of POW, ...</em></p>

CC BY-SA 3.0
2017-09-11T15:32:28.523Z
So I should buy it for charity? Makes no sense.
Martin Wickman
CC BY-SA 3.0
2017-09-13T06:43:36.480Z
This answers assumes a wrong definition of better technology.
sanket1729
CC BY-SA 3.0
2017-09-11T13:55:56.457Z
2017-09-11T13:55:56.457Z
Zauz
<p>When you invest in an ICO, you get a bunch of tokens in return. From what I understand, these tokens don't generate any dividends, hence they are essentially worthless. Why should one buy them?</p>

<p>Let's compare with buying stocks in a company: The reason company shares have any value is because of dividends (or other profit sharing methods). If a company promises to never distribute any profit to its shareholders, the stock is worth exactly zero. No one would buy them.</p>

<p>I'm trying to make sense of this and I'm certainly missing something here.</p>

CC BY-SA 3.0
2017-09-11T16:42:48.860Z
"The reason company shares have any value is because of dividends." well no, as not all stock generates dividends.
weston
CC BY-SA 3.0
2017-09-11T16:49:28.987Z
"Notable companies that don't pay dividends include Berkshire Hathaway (BRK.B), Facebook (FB), Alphabet (GOOG), Amazon (AMZN), and Tesla (TSLA)."

[Why do some companies pay a dividend, while other companies do not?](http://www.investopedia.com/ask/answers/12/why-do-some-companies-pay-a-dividend.asp#ixzz4sOEC54g1)
weston
CC BY-SA 3.0
2017-09-12T07:11:42.570Z
@weston Lots of stocks don't give dividends _today_, but the prospect of _future_ profit distribution is why stocks have any value. Otherwise, there would be no point of buying stocks (apart from curiosity and stuff like voting rights etc). If the company never plans to issue a dividend, it's just a game of the greater fool. Unfortunately far too many people have bought into the game.
Martin Wickman
CC BY-SA 3.0
2017-09-12T12:22:12.837Z
So you are saying that people are only are happy to invest today, tying up thousands of dollars in these companies, in the vague hope that they might get, maybe 5%, return in future years? If that's true, why wouldn't those same people just invest in companies that already are paying dividends today? Because they hope the company will grow and their return is from later investors willing to pay more for the same stake. Investors always don't want dividends, they have to pay income tax on it, and like I said, the % is low in investment terms.
weston
CC BY-SA 3.0
2017-09-13T10:30:05.587Z
One buys a no-dividends company today when you think it will (a) start doing it soon, (b) are in growth and eventually will do it, (c) will close down and liquidate assets to shareholders or (d) is bought out. If you do (b) then you're betting profits will increase in the future. If you weather it, you'll *not* get a measly 5%. This is why stocks prices increases. Btw, this is the reason companies end up with 5% ('ish). If a company would give you 50%, then people would buy shares like crazy until the price goes up so the net return is 5% or whatever.
Martin Wickman
CC BY-SA 3.0
2017-09-13T10:32:56.213Z
(continued) The other cases (a, c, d), are easier to understand: you get your money today.Ask around if you don't believe it. That's all I have to say about this.
Martin Wickman
CC BY-SA 3.0
2017-09-13T10:51:49.653Z
So you don't believe companies can have value without giving dividends now or in future. And if a company vowed to never give dividends its stock would collapse to zero?
weston
CC BY-SA 3.0
2017-09-13T10:59:09.437Z
I know this will shatter your simple abcd view of the stock market but you should read http://www.businessinsider.com/warren-buffett-on-dividends-2013-3 where Warren Buffet explains why his company will *never* pay dividends. So the price of that share must be zero right? Haha
weston
CC BY-SA 3.0
2017-09-13T18:37:21.300Z
Then we're in the case of (c) or (d). Eventually. Which both means dividends in the sense of giving profits back to the shareholders based on number of shares they own.
Martin Wickman
CC BY-SA 3.0
2017-09-13T18:53:09.070Z
https://en.wikipedia.org/wiki/Berkshire_Hathaway 230 Billion revenue, assets worth 600 Billion. That company is neither being bought out or liquidated anytime soon! Can't you see that simply owning part of a company is investment enough? You don't need dividend payouts as well. And about (c) liquidation, usually a company is in massive debt and that point and the shareholders are very last on the list of people to get a slice of any recouped funds. No one buys shares with the hope a company will be liquidated.
weston
CC BY-SA 3.0
2017-09-14T06:29:47.550Z
Look, this is all basic economics. I tried explaining it to you, but failed. By all means, invest your money as you see fit.
Martin Wickman
CC BY-SA 3.0
2017-09-14T09:23:53.347Z
You're the person asking questions, I tried explaining to you, I even gave you perfectly good examples and sources, but you stubbornly ignored them. Bottom line, companies have a value without dividends. But none of that stock market stuff even matters, ICOs are at best unregulated, and usually just scams.
weston
CC BY-SA 3.0
2017-09-14T11:54:51.450Z
I never asked if buying hypothetical stocks with no returns are worthless or not (because it's an economic fact). For the record, I bothered to check this with a guy working in the Nordic stock exchange and another who's a successful angel investor (who is also a huge Buffet fan btw). Both with 15+ professional years. Both corroborate this. Again, invest your money as you see fit.
Martin Wickman
CC BY-SA 4.0
2019-08-20T16:14:00.577Z
I'm voting to close this question as off-topic because it's asking for investment advice.
Murch
<stocks><ico-initial-coin-offering>
Why should one invest in an ICO?
Martin Wickman
# Why should one invest in an ICO?

(Asked by: username_0 on 2017-09-11)

When you invest in an ICO, you get a bunch of tokens in return. From what I understand, these tokens don't generate any dividends, hence they are essentially worthless. Why should one buy them?

Let's compare with buying stocks in a company: The reason company shares have any value is because of dividends (or other profit sharing methods). If a company promises to never distribute any profit to its shareholders, the stock is worth exactly zero. No one would buy them.

I'm trying to make sense of this and I'm certainly missing something here.

**Tags:** stocks, ico-initial-coin-offering

> **Comments:**
> **username_1**: "The reason company shares have any value is because of dividends." well no, as not all stock generates dividends.  
> **username_1**: "Notable companies that don't pay dividends include Berkshire Hathaway (BRK.B), Facebook (FB), Alphabet (GOOG), Amazon (AMZN), and Tesla (TSLA)."  [Why do some companies pay a dividend, while other companies do not?](http://www.investopedia.com/ask/answers/12/why-do-some-companies-pay-a-dividend.asp#ixzz4sOEC54g1)  
> **username_0**: @username_1 Lots of stocks don't give dividends _today_, but the prospect of _future_ profit distribution is why stocks have any value. Otherwise, there would be no point of buying stocks (apart from curiosity and stuff like voting rights etc). If the company never plans to issue a dividend, it's just a game of the greater fool. Unfortunately far too many people have bought into the game.  
> **username_1**: So you are saying that people are only are happy to invest today, tying up thousands of dollars in these companies, in the vague hope that they might get, maybe 5%, return in future years? If that's true, why wouldn't those same people just invest in companies that already are paying dividends today? Because they hope the company will grow and their return is from later investors willing to pay more for the same stake. Investors always don't want dividends, they have to pay income tax on it, and like I said, the % is low in investment terms.  
> **username_0**: One buys a no-dividends company today when you think it will (a) start doing it soon, (b) are in growth and eventually will do it, (c) will close down and liquidate assets to shareholders or (d) is bought out. If you do (b) then you're betting profits will increase in the future. If you weather it, you'll *not* get a measly 5%. This is why stocks prices increases. Btw, this is the reason companies end up with 5% ('ish). If a company would give you 50%, then people would buy shares like crazy until the price goes up so the net return is 5% or whatever.  
> **username_0**: (continued) The other cases (a, c, d), are easier to understand: you get your money today.Ask around if you don't believe it. That's all I have to say about this.  
> **username_1**: So you don't believe companies can have value without giving dividends now or in future. And if a company vowed to never give dividends its stock would collapse to zero?  
> **username_1**: I know this will shatter your simple abcd view of the stock market but you should read http://www.businessinsider.com/warren-buffett-on-dividends-2013-3 where Warren Buffet explains why his company will *never* pay dividends. So the price of that share must be zero right? Haha  
> **username_0**: Then we're in the case of (c) or (d). Eventually. Which both means dividends in the sense of giving profits back to the shareholders based on number of shares they own.  
> **username_1**: https://en.wikipedia.org/wiki/Berkshire_Hathaway 230 Billion revenue, assets worth 600 Billion. That company is neither being bought out or liquidated anytime soon! Can't you see that simply owning part of a company is investment enough? You don't need dividend payouts as well. And about (c) liquidation, usually a company is in massive debt and that point and the shareholders are very last on the list of people to get a slice of any recouped funds. No one buys shares with the hope a company will be liquidated.  
> **username_0**: Look, this is all basic economics. I tried explaining it to you, but failed. By all means, invest your money as you see fit.  
> **username_1**: You're the person asking questions, I tried explaining to you, I even gave you perfectly good examples and sources, but you stubbornly ignored them. Bottom line, companies have a value without dividends. But none of that stock market stuff even matters, ICOs are at best unregulated, and usually just scams.  
> **username_0**: I never asked if buying hypothetical stocks with no returns are worthless or not (because it's an economic fact). For the record, I bothered to check this with a guy working in the Nordic stock exchange and another who's a successful angel investor (who is also a huge Buffet fan btw). Both with 15+ professional years. Both corroborate this. Again, invest your money as you see fit.  
> **username_2**: I'm voting to close this question as off-topic because it's asking for investment advice.  

---

## 4 answers

### Answer by username_3 on 2017-09-11. Score: 2

From a investors perspective, : You buy them because you speculate that the tokens will go up in value over time, as the company behind it develops the usecase of said "Product/Token".

Or, because they suspect that the Token/Coin/Blockchain will get adapted by alot of people/users, and used as a Currency.

For example, Ethereum.

It was first launched as an ICO, and collected ~$17.3M USD (24000 bitcoin at the time.).

Almost nothing worked when it was first launched, but the coin/token developed over time, adding more features such as the smart contracts, all the apps build on Ethereum, and resolving many other issues.

Thus it became more popular, and was used more, and value went up.

(Ethereum currently has a ROI of ~85714.2857143%, if you kept holding since the ICO.)

This is why ICO's are hyped up so much currently, which is both bad and good.

There's token sales for anything you can think of, "decentralized this, decentralized that", you have to ask yourself how legit that is, and if it is worth investing your time and money in, because afterall, it is still a huge risk.

> **Comments:**
> **username_0**: Ok, that makes more sense. Would you care to elaborate in your answer? Maybe give an example?  
> **username_3**: Done. Hope this eleborates it a bit more.  

---

### Answer by username_4 on 2017-09-11. Score: 2

Do crypto-coins themselves (bitcoin, litecoin, ethereum and 100500 other shitcoins) generate dividends? :))))))))

the answer is: ponzi pyramid scheme. point.

> **Comments:**
> **username_0**: Well, the perceived value of BTC is that it *could* possibly be useful in the future for buying stuff (ie replacing fiat). So I see the potential for value here at least.  
> **username_1**: so your answer is "ponzi pyramid scheme. point." Those are not even sentences. Are you saying that bitcoin/eth should be grouped in with ICOs?  
> **username_4**: of course. bitcoin/altcoins/ico/tokens/etc - are the similar things. you buy something and should wait for the next buyer to sell him your "digits" for higher price. people involved in pyramid are very angry listening this, because they are afraid about their "inversments". so they downvote the truth answers  
> **username_1**: I downvoted because it's a poor answer. I'm surprised a user with your rep actually believes this, but I would respect it, even upvote it if you gave some body to back up your answer. As it is, I don't think you know what those terms mean. In a Pyramid scheme, your personal income relies on recruitment, that's not the case with any coins. In a Ponzi scheme, returns are given from new investors to old investors, which is closer, but no one is promising or dishing out returns here and transactions are completely transparent on the blockchain, a Ponzi relies on hiding the source of the returns.  
> **username_1**: That said, 99% of ICOs are scams IMO. Not anything as elaborate as Ponzi or Pyramid, just a simple grab and run.  
> **username_4**: "...a user with your rep actually believes this..." - this is wrong. You BELIEVE in opposite thing but I have proofs :) because I have knowledge in this area  
> **username_1**: I mean you hang around, being a valuable contributor in what you regard as a scam. That I find odd, a contradiction. But anyway, please do elaborate on the proofs in the answer.  

---

### Answer by username_5 on 2017-09-11. Score: 0

The only reason to buy a currency is you think you'll be able to buy stuff with it in future, or sell it for more than you bought it in future. If you invest in an ICO, it should be on the hope there's a viably large future group of people trading it.
In one way, investing in cryptocurrencies is like investing in gold. The big difference is there's only one gold - but new cryptocurrencies are popping up every week.
I've seen ICOs marketed as "bitcoin for dentists". This puzzles me. Most dentists I know use the same money as everyone else.


---

### Answer by username_6 on 2017-09-11. Score: -2

By buying ICOs you do not buy a part of a company or similar. You are buying a part of a product of the company, thereby **helping the company to further develop** this product.  
You invest in the *technology*\* of the ICO.  
If you think the *technology* is better than the *technology* used by BTC, ETH, ... in some way and you think it is good enough to become a solid Altcoin or even good enough to replace some of the big ones, you invest in it because you **expect its value to rise**.

*\*technology: better block size, POS instead of POW, ...*

> **Comments:**
> **username_0**: So I should buy it for charity? Makes no sense.  
> **username_7**: This answers assumes a wrong definition of better technology.  

---

