People attend a Bitcoin conference on at the Javits Center April 7, 2014 in New York City. Andrew Burton/Getty Images Earlier this month, the MIT Technology Review posted an article that asked “What the hell is an initial coin offering?”

When befuddlement emanates from the Massachusetts Institute of Technology, arguably the world’s foremost grantor of geek cred, you know you are in truly new territory.

Here’s what it is: An initial coin offering, or ICO, is a fundraising mechanism based on a “cryptocurrency,” such as bitcoin.

An ICO can launch a whole new cryptocurrency (there has been a proliferation of new flavors in recent months), or it can be used to create “tokens” used to fund a new business.

For instance, an ICO can allow a new data-storage company to pre-sell tokens to be used as a digital form of payment for distributed file storage.

That is the essential story behind the Filecoin ICO, which raised hundreds of millions of dollars in a presale to some of the biggest investors in Silicon Valley. The technology, which promises to enable the use of excess storage capacity on all kinds of computers — sort of an Airbnb of hard drives — is being built with funds from the token sale.

And yet, nothing about an ICO is that simple. As the CEO of a new enterprise cloud platform planning to launch an ICO this year, I can tell you from the front lines that this market truly is a through-the-looking-glass experience.

With its own jargon, murky regulation, a gold-rush atmosphere and hundreds of millions of dollars in play for some of the bigger projects, it has become nothing short of its own financial subculture.

Imagine: More than $1.5 billion has been raised via ICOs to date.

In fact, blockchain-based businesses have so far this year raised more capital via ICOs than through traditional venture capital.

Many say it’s a bubble. Maybe. But it’s also possible that — like the Internet boom of 20 years ago — valuations are beside the point.

The real story is the underlying innovation of crowdfunding through a sale of digital tokens, verified through a novel use of blockchain technology. It is refreshingly independent of our modern banking and fundraising mechanisms.

People attend the Inside Bitcoins conference and trade show, Monday, April 7, 2014 in New York. Mark Lennihan/AP ICOs are such a new concept that the market is way ahead of policy. Governments are still wrestling with how or whether to oversee them. The U.S. Securities and Exchange Commission has given only the most cursory of guidance about what types of ICOs should be regulated as securities.

China flat-out banned them earlier this month, no exceptions, sending cryptocurrency values into a tailspin. Estonian officials, meanwhile, were considering an ICO for the nation’s very own cryptocurrency until the EU got spooked and made them stop.

In theory, ICOs should be pretty vanilla: Entrepreneurs announce and promote their new idea online. The ICO customers who are excited about, and want to use the product, buy the tokens. Then the entrepreneur uses the funding to build the product using a token that has a value only on that system.

A real world corollary would be an arcade that pre-sells tokens, using the funds to buy all of the best video games, and then opening its doors to its pre-sold community. Those tokens would only have the value of playing a game, no more no less.

But the ICO world doesn’t quite work like that. If the entrepreneurs succeed and there’s good demand for that product when it launches, then those pre-sold tokens become more valuable. And so speculators have stepped in, exchanges have been set up and everyone has pretty much lost their minds.

And, as the bigger money has come in, just like the traditional investing world, the individual investor can be at a distinct disadvantage.

Global crypto investors — the biggest ones are called “whales” — are sought for every ICO. New “institutional” crypto investment groups, and even self-styled hedge funds, get in early to buy tokens in bulk at a discount, to sell later to the community at a premium.

During the gold rushes of the 1800s, the only ones guaranteed to make money were those selling tools, provisions, maps, etc. to the gold rushers. In this modern gold rush we see see their descendants: cottage industries of specialist crypto-investor relations and marketing companies sprouting up on the sidelines, looking to charge well over a hundred thousand dollars for a successful ICO launch.

New platforms have spawned to charge companies to rate their ICOs, and others charge thousands of dollars — in cryptocurrency of course — to list the upcoming sales.

An attendant holds a bitcoin sign during the opening of Hong Kong's first bitcoin retail store REUTERS/Bobby Yip There are actual registered broker-dealers offering some services. Finding the credible ones is still tough, as many are still cautious. Too many are the very questionable shops with the minimal licensing that are little more than boiler rooms. A true-utility token is going to be an asset class of its own, and will tap into the established financial market, but as of yet there is no system or credible player.

It’s become so important to create enthusiasm and demand for the product that a bounty program typically is organized around each. The tokens for sale in the ICO are intended for a community that will use the product itself, but nothing is stopping speculators from scooping them up. In fact, the momentum is part of what drives a successful ICO.

With every ICO come the folks who offer help in exchange for tokens. In this context those tokens are called a “bounty,” making them ... bounty hunters. This help comes in every imaginable form. ICOs generally involve the crafting of a white paper that’s given to investors. Swarms of bounty hunters appear offering translations into Mandarin and Russian but also Romanian, Turkish, etc.

Overseeing this process is the bounty manager, someone hired by the company who by necessity is a strict taskmaster. He or she bans the shady bounty hunters, controls the purse strings and checks their work. You’ll want one who can read Romanian.

The future is unwritten. ICOs may complement venture capital and private equity and they may not. Regulatory crackdowns could slow things down. But so far ICOs continue apace.

The point is this a fundamentally new funding model, so there is no roadmap for growth and process. The road that is being paved has created its own subculture, and that’s an interesting thing to see in the what is usually a grey and stodgy world of finance.

Lucas Geiger is the founder and CEO of Wireline, a marketplace for business applications. Wireline is raising the largest open-source developer fund through an ICO.