What is an ICO?
It is an Initial Coin Offering, coming off the back of the wild success of Bitcoin, there are literally hundreds of companies now marketing their own currency for you to buy instead of Dollars or Euros or even Pound Sterling if your desperate.
These offering basically allow you to buy early into a currency at a discount to future price. The idea being that Bitcoins could be bought for $20 as recently as six years ago, now they are going for $4000 dollars. As supply is limited by the blockchain and algorithmic programming backing them, you will be onto a winner if you buy early.
Hence the ICO's. The money from the ICO's is spent broadly on marketing the new-fangled currency. This is of course, by its very definition, a Ponzi-Scheme. There is no intrinsic value, just what the next fool is willing to pay. It is not even shiny like gold with alternate uses, it is just bits of data.
In 1817 we had the Poyais scandal, which was both a master fraud and a good allegory, a non-existent but promising new land was to be explored and financed by Bonds issued in London. Many people, desperate for yielding investments, joined in. OF course, there was no such place and fools were parted from their money.
ICO's are the same idea, they are playing on the success of bitcoin, which is different. There is no trust in bitcoin, the whole system is open, no one controls it - indeed the inventor fled into anonymity. There is no Bitcoin company owner making profits, these have been left for everyone else. It is indeed almost surreal.
The other ICO's all require the issuing company to do something in order for trades to happen, to take a margin in some way. Thus they are not really currencies and over time there will be a route for the owners of the company to hold to ransom the owners of THEIR currency.
It is a huge scandal this crypto-currency arena, not one I have yet touched although Bitcoin does stand out as different.