Hi jlp. You have a great insight on ICOs. I know i'm being bias since I'm part of the bounty but I think project related to e-sports such as Eloplay has a good shot in being successful in the future. What can you say about it 
In regards to Eloplay, I think gaming and gambling are two excellent applications for cryptocurrency. After transfer of value (currency) and store of value applications, gaming and gambling are very good fits. Cryptocurrencies enable several things to be done that could not be done previously:
For Gaming:
- Win real value that can be withdrawn from the game or gaming ecosystem, instead of winning just digital goods that are locked in.
- Winning real value elevates the fun and excitement of the games and competitions.
- In essence, crypto currency enables gaming to provide gambling. Gaming (with crypto currency) is an euphemism for gambling. One will argue that gaming has skill whereas gambling does not. This is not true. Lotteries and slots do not involve skill, but many gambling games, such as Black Jack or Poker, involve skill. Financial betting involves skill.
For Gambling:
- Governments around the world are the biggest operators of gambling. Most governments run big lotteries. Several run huge casinos. But, they block competition, such as online gambling, to maximize their own revenue. Many of them do not have specific laws that outlaw online gambling. If they do, they rarely enforce them because its difficult, as they themselves are gambling operators. To block online gambling, they ban credit card companies and banks from sending money to and from gambling sites. Cryptocurrencies can solve this business problem for gambling operators. Cryptocurrencies can unshackle and liberate gambling and let anyone to play from anywhere in the world.
- Gambling sites are known to cheat or steal from their customers. If the bets are handled by smart contracts, this business problem can be solved.
Therefore, Eloplay is in a great space. They have a product, which is great news, though I didnt try it. That proves that they can build.
However, they have lots of competition. There have been many eSports or Gaming ICOs, such as Firstblood, Unikoingold, GameCredits, etc. There are more, but I forgot their names. Im not saying that this industry cannot support many competitors. I just dont know how many.
Elopay is from that large country east of Europe, which has no extradition agreements with much of the world. This increases the risk for you, because if they defraud you, your government cannot help you.
Hey jlp, your input into ICO's and your insights regarding to the potential of gaming and gambling are great. I was wondering however, what do you think about Crypto 'hedge funds' ICO's such as Crypto20? Do you think there's any potential there? Apparently they have a tangible platform and tangible results, and overall they seem promising. What's your take on them? Thanks in advance.
In regards to Crypto20, I think there is a need for an index fund of cryptocurrencies. However, the risk with crypto investment funds is that they centralize money and therefore create honey pots (term from Andreas Antonopoulos) for hackers and thieves. A thief stole $50 million from DAO. Hackers (and possibly employees) stole from many exchanges.
The other risk with Crypto20 is that they are obviously and blatantly selling a security. If and when regulators come after ICOs for selling securities, they will go after the ones that were most obvious. If they do, then both the project team and token holders will suffer.
How do we know that the Crypto20 tokens truly have ownership of the underlying assets (top 20 cryptocurrencies)? Is there a Crypto20 smart contract where we can call one of its GETTER functions to see the balances of the 20 cryptocurrencies that the smart contract is holding? I did not see this in the white paper. Even if we can verify that the smart contract is holding the 20 cryptocurrencies, how do we know that the Crypto20 tokens own the assets that the smart contract holds? But the smart contract does not hold the 20 cryptocurrencies. According to the white paper, these will be held in cold storage.
If the majority of the Crypto20 token holders want to claim the assets (20 cryptocurrencies), can they? Can they go to a judge and prove that they legally own the assets in Crypto20s cold storage? I could not find answers to these questions.
Tether has the same principles. It is supposed to be backed by and track the US dollar. Each Tether is supposed to equal one US dollar in value. There are talks that they do not have enough US dollars and they have not been able to prove that they do. Lets say there are 1 million Tether tokens, but they only have 100,000 US dollars to back it up. What do you if you are a token holder? Take a flight to the teams country and try to hunt them down?
When you give your ETH to Crypto20, they are supposed to take that and buy the equivalent amounts of Bitcoin, Ripple, Bitcoin Cash, Ethereum Classic, NEM, Dash, etc. How do you know that they have? You cannot have access to their cold storage. How do you know that they havent skimmed off 50% of the ETH and put it into their personal wallets?
These are the risks of every type of crypto investment fund. There are many of them now. Some of them might be honest and legitimate. Some of them will not be. The risk is that it is hard to be sure that you are investing in the honest one, unless they provide all of the answers to questions like mine. If there is a way to know for sure that they cannot screw you, then these types of investment funds can provide a lot of value.
I see, what you're saying makes a lot of sense. if we had the assurance that those funds were completely honest or legitimate, they would have great potential in the future, unless the whole crypto ecosystem would crash. Anyway, I was also wondering, what's your take on Blockchain ICOs like Universa, who claim they will be superior to Bitcoin and other platforms in many aspects? Obviously, Universa doesn't have any prototype it seems, but solely from the perspective of potential and adoption rate, could they work? Another type of ICO I was wondering about with regards to your view on it would be digital advertising ICOs like Papyrus for example. Considering social media and digital advertising are growing exponentially in this age, do you think Altcoins would have any potential to penetrate this space?