Upload a png file and we create 2 scaled images and then generate a combined favicon.ico for websites.

After the .ico is generated use it in your page (in root dir or with one of following rel style links):

<link rel="icon" type="image/png" href="/somewhere/myicon.png"/>
<link rel="shortcut icon" href="/somewhere/favicon.ico">  
<link rel="apple-itouch-icon" href="/somewhere/apple-touch-icon.png">

This works for most rails sites when you put favicon.ico in public or app/assets dir and following in the head tag of your layouts/application.html:
<link rel="shortcut icon" href="favicon.ico" /> 
<link rel="icon" href="favicon.ico" type="image/x-icon" />

Restyled with bulma and updated rails to latest version on 31/12/2018. Happy New Year 2019!

Ow and yes there is an issue with greyscale images, you'll see 'Error: Grayscale image'. Somehow this bug was fixable on local machine by passing colorspace="sRGB" with mini_magick that uses mogrify/imagemagick behind the scenes but on our server it still remains broken (most likely other imagemagick version).

A quick workaround is to save your png as color one by using #110000 instead of pure black #000000.