> Having a coin is a marketing strategy - people get in early because they have the most to gain, and then they spread the word to all of their friends to use the service, and it grows from there.
So do ponzi schemes. The early investors into them make money, and have a lot to gain by spreading the word to other people.
Investing into a growing ponzi scheme is a rational investment strategy. That's why people do it, and that's one of the reasons for why they are illegal.
As far as I can tell, the majority of interest in ICOs comes from people who are hoping to dump their investment onto a bigger fool. Ironically, the worse the ICO is as a business, the more fools will be interested in it, which makes those ICOs more attractive to invest in.
So do ponzi schemes. The early investors into them make money, and have a lot to gain by spreading the word to other people.
Investing into a growing ponzi scheme is a rational investment strategy. That's why people do it, and that's one of the reasons for why they are illegal.
As far as I can tell, the majority of interest in ICOs comes from people who are hoping to dump their investment onto a bigger fool. Ironically, the worse the ICO is as a business, the more fools will be interested in it, which makes those ICOs more attractive to invest in.