Buttonwood: Investor Caution Obligatory
A new craze attracts the attention of regulators
Here is the deal.
You can buy an entry in a computer ledger issued by a startup company on the basis of an unregulated prospectus.
It is called an “initial coin offering” or ICO.
这被称为“首次货币发行”（initial coin offering），简称ICO。
But though the ledger entry is called a coin, you cannot spend it in any shop.
And whereas the use of the term ICO makes it sound like an IPO (initial public offering), the process whereby a firm lists on a stockmarket, coin ownership does not necessarily get you equity in the company concerned.
而且，尽管ICO一词的使用使之听上去像是一次IPO（initial public offering 股票首次公开发行），即公司借以在股票市场上市的程序。但是，货币的所有权并不必然地能让你得到相关公司的权益。
This sounds like the kind of bargain that would appeal only to people who reply to e-mails from Nigerian princes offering to transfer millions to their accounts.
But ICOs may well be the most popular investment craze since the dotcom boom of 1999-2000; even Paris Hilton, a celebrity heiress, has jumped on the bandwagon.
The list of active, upcoming and recent ICOs on the website “ICO alert” covers 31 pages of A4 paper and includes around 600 companies.
More than $2bn has been raised in total.
There is a serious side to the craze, just as there was with the dotcom boom.
The technology that underpins digital currencies—the blockchain—is an important development.
This is a secure, decentralised ledger that everyone can inspect but that no single user controls.
It seems likely to be adapted for use across the financial system—to record property transactions, for example.
Many ICOs are designed to finance applications that will make use of the blockchain—for trading currencies, lending money or searching for jobs.
In some cases, the “coins” can be exchanged for services on the site.
In a way, this is like selling air miles in a startup airline; investors can either use the miles for flights or hope they can trade them at a profit.
For the business, it is also a way of creating demand for the product they are selling.
But in plenty of cases, an ICO is just a way of raising capital without all the hassle of meeting regulatory requirements, or the burden of paying interest to a bank.
Businesses are able to achieve this feat because investors hope that the coins will rise rapidly in value, as has been the case with bitcoin or ethereum, the best-known digital currencies, which have seen stellar gains in the past year.