As Axios reports, since the beginning of 2017, 65 startups have raised $522 million using initial coin offerings — trading a digital coin (essentially an investment in their company) for a digital currency, like Bitcoin or Ether.

One recent example, as NYT reports, saw Bay Area coders earn $35 million in less than 30 seconds during an online fund-raising event. They sold Basic Attention Tokens (BAT coin) which will grant buyers access to an innovative ad-free web browser the coders are intending to create, but have yet to launch.
And that's the catch: these investors are buying promises in the form of coins for a product or service that doesn't exist.
 
Similar to the Bay Area example, a group of entrepreneurs in Switzerland secured $100 million last week by selling a coin that will one day be used on Status, an online chat program that's still being developed.
 
Proponents argue that these initial coin offerings are "a financial innovation that empowers developers and gives early investors a chance to share in the profits of a successful new enterprise," NYT notes.