A new way to fund companies. Instead of selling parts, issue tokens that work like a cryptocurrency and promise they will entitle to some profits. Sell these for bitcoins. Recently some companies raised a billion USD that way (yes, billion)

The concern, that I share, is that this system is very vulnerable to Ponzi scheme. And unlike Bitcoin, the crash of the pyramid is not a feature in this system.

I think people are right to warn and forbid this thing. Pyramid scheme can have large-scale effect in an economy.

I think etherum provides way to do things more responsibly but I understand that authorities moved quickly when they saw anonymous companies with no products receiving a billion USD.

Even that will cause ripples when it collapses. You don't want it to grow more.

Essentially, selling some amount of your cryptocurrency to your investors before you launch.

It's an Initial Coin Offering, a unregulated way for a company to raise funds, but which has also been associated with scams and Ponzi schemes recently.

Magic beans from bubble machines. People buying tokens that are literally defined as being worthless, and trading them on exchanges as fast as possible. https://davidgerard.co.uk/blockchain/icos-magic-beans-and-bu...

Initial Coin Offering. An unregulated fundraising method.