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The ICO Scam Train Arrives in Sweden – Meet “Starflow”
ICO scams can take many forms. There are phishing scams, perpetrated by impostors. There are the straight-up take-your-money-and-run exit scams. And there are the pointless ICO scams which will rob investors by failing to deliver a viable working product or shipping vaporware. In the long run, these are every bit as pernicious, for not only will they deprive investors of their money, but they’ll also cost them their time. This week the ICO Scam Express stopped off in Sweden and Slovenia courtesy of Starflow and Futourist. Both projects look almost certain to fail.
Another Day, Another Pointless ICO
Pointless ICOs aren’t the exception – they’re the rule. By any reckoning, less than 10% of all startups are worth investing in, and only around half of those are a long-term hold. ICOs should fare even worse. They are only good for a quick flip (if you happen to get in early and timely) before the token dies a slow death or the platform fails to materialize. Every country produces its share of pointless ICOs, so Sweden and Slovenia are certainly not alone in that respect. They take a starring role this week however thanks to the arrival of Futourist and Starflow.
It is the latter project that is the most egregious. On first glance, Starflow looks legitimate enough. There’s nothing glaringly wrong with the website, which outlines plans for a platform where brands and creators can monetize their content. The white paper is slick and comprehensive. It’s also a load of rubbish. Prefaced by a four-page disclaimer, it features wishful statements such as the following:
StarCoin will function as loyalty token, strengthening relationships in between all participants and ensuring long term activities on the platform. It will also ensure that Starflow will be valued and appreciated based on our own performance rather than that of others.
This, unfortunately, is wishful thinking. Users aren’t loyal to app tokens. The paper continues: “[StarCoin] is the heart, the essence, of the entire offering and It’s [sic] mere existence is what enables all the new and enriched possibilities for creators to produce more, better, exclusive and premium content.” So if the platform were to use ether as its currency, creators would produce worse content?
A Team You Can Trust?
<figure id="attachment_116100" style="max-width: 300px" class="wp-caption alignright">
<figcaption class="wp-caption-text">Johan Staël von Holstein</figcaption>
After inspecting the white paper, the next port of call for any potential investor performing due diligence should be the project’s team and advisors. Do they have the experience to suit the sector? Have they demonstrated a willingness to stick with projects, or do they jump from startup to startup? One of Starflow’s early backers and advisors is Johan Staël von Holstein, described as a “notorious serial entrepreneur”. The notorious part is certainly correct. One of von Holstein’s earliest ventures was Icon Medialab, which was rekt during the dot com boom, causing its shares to plunge 98% in a year and leading to 500 layoffs. It was later bought over.
A cached Swedish news story sheds further light on von Holstein’s business acumen and quirks. His Twitter bio, meanwhile, reads “Internet visionary, investor & serial entrepreneur! Privacy, ownership & control with the right to sell & profit.” Investors may conclude that the serial entrepreneur’s priorities lie with personal enrichment rather than furthering the advancement of the decentralized web. They may also notice that Starflow’s Twitter followers are mostly fake.
Peering into the Futourist
Sweden has Starflow and Slovenia has Futourist, a platform with a very similar business model. Futourist – which has drummed up extensive support – is “the first blockchain based review platform that rewards you for your content”. Payments, predictably, will “happen through a transaction of a newly issued Futourist Token (FTR), an ERC20 token being processed on the Ethereum network”. From the perspective of funding the project, a token makes sense. But from the perspective of user convenience, it’s just an extra step that’s likely to leave the platform, like Starflow, marginalized and unutilized when the fledgling crypto economy takes off.
Eric Wall put it best in his recent trading column: “While it may be true that an ICO could be the thing that gets a project off the ground that wouldn’t have otherwise, it may also be the thing that kills it.” Don’t get blinded by flashy websites promulgating the blockchain meme. Do your own research and invest only in projects that have real merit, real commitment, and a real use case for their token. Also, ask what you get in return for your money when buying the token. If the only thing you are getting is the token, then all you have done is prepay for a future service. Why not wait and buy it if it ever actually materializes? Starflow promises “loyalty” in return. So you are buying your own loyalty. You are giving them money, so you can be “loyal” to them. That’s crazy.
What metrics do you use to gauge the merits of ICOs you’re considering investing in? Let us know in the comments section below.
Images courtesy of Shutterstock, and Starflow.
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The post The ICO Scam Train Arrives in Sweden – Meet “Starflow” appeared first on Bitcoin News.
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