Scams have long been common in the cryptocurrency space, but it seems we may be getting better at spotting them from the beginning. With the recent BAT ICO on the Ethereum platform, we saw some serious weirdness that resulted in a few people owning 40% of the distributed coins. As Vitalik Buterin points out below, one very weird thing was an extremely high mining fee paid out to get to the front of the line in the ICO funding:
https://t.co/oiFGyh1iju This is a $2220 tx fee, used to cut in line in BAT ICO. "Ethereum avg txfee $1" statistics include stuff like this.
— Vitalik Buterin (@VitalikButerin) May 31, 2017
BAT stands for basic attention token. BAT will be used in the Brave platform, which at least at one point involved a browser that intends to pay people for allowing some advertising into their browsing experience. Brave can be integrated into other means of advertising, as well, of course. This is, perhaps obviously, why people are suspicious of the whales who bought in huge and heavy, as well as paying absurd transaction fees.
It seems there are two obvious answers to the questions at hand. One is that a reseller of the tokens, who believes they will be huge, wants to get his hands on a lot so he can sell them to advertising agencies. Another is that a couple advertising agencies themselves snapped up as many as they could, and weren’t really aware of how much money they were spending when using the Ethereum platform for the first time. Or, sadly another option is that the creators of BAT and Brave themselves went in for huge buys on the token sale, perhaps to ensure success of something that turned out to be a success anyway or perhaps to have more control over the economy going forward. If the intention is to withhold that large percentage of the token from the public, then that would indeed have the effect of raising the overall value, which would be a good long-term move for anyone invested in the project. Nevertheless, people apparently wanted to buy more coins, and having only a 24 second window to make a purchase seems overtly absurd.
It would seem obvious that a second, longer token run should be run, so people can get in on the project, since interest seems to have outweighed supply:
#basicattentiontoken Who's this guy? He bought a quarter of total $BAT ICO tokens. @AttentionToken #BAT pic.twitter.com/o5Ak0NBlvu
— Crypto Wolf (@1life2live_SHIN) May 31, 2017
One thing is for sure: advertising isn’t going anywhere. The upcoming advent of virtual reality being commonplace will only increase the ability to advertise to people based on their real preferences and desires. The more time people spend on devices, in virtual space, the better the advertisers will become at extracting funds from their wallets, virtual and physical.