
Torcoin: Crypto's latest scam - toinetoine
https://blog.toine.io/torcoin/
======
timdorr
Crazy part is this guy didn't even come up with the name!

[https://github.com/torcoindev/torcoin/issues/4](https://github.com/torcoindev/torcoin/issues/4)
You can see he changed the title in that issue, indicating he was taking over
the abandoned name.

The original project is at least nearly 3 years old:
[https://github.com/torcoindev/torcoin/issues/1](https://github.com/torcoindev/torcoin/issues/1)
(Git timestamps can be forged, but not Github issues)

And for the pièce de résistance, there's a backdoor in the code:
[https://github.com/torcoindev/torcoin/issues/3](https://github.com/torcoindev/torcoin/issues/3)

------
chatmasta
Just want to say this has absolutely nothing to do with the research I did for
my senior thesis [0] which was quite popular on HN when I posted it a few
years ago.

We never moved beyond the research / theory phase, which is admittedly
frustrating, but we never intended to scam anyone.

That said, the idea of incentivizing routing is one I think about every day.
In college I ran a successful business selling proxy servers, which opened my
eyes to the unoptimized economics of small/medium scale IP transit. Major
cloud providers are making a huge racket by charging for transfer rather than
capacity. This presents an opportunity for a marketplace.

My next product is going to be a global L3 routing-fabric-as-a service with
developer pluggable routing and filtering rules. I'm going to bootstrap it by
offering outbound http proxies with hourly charging and an API. Then I will
develop the more generalized routing fabric, with the eventual goal of
creating a marketplace for bandwidth and routing.

If that piques anyone's interest, feel free to email me - address in profile.

[0] [http://dedis.cs.yale.edu/dissent/papers/hotpets14-torpath-
ab...](http://dedis.cs.yale.edu/dissent/papers/hotpets14-torpath-abs)

------
Analemma_
Cryptocurrencies are a brilliant scam. They are to the libertarian-ish
programmer crowd what MLM pyramid schemes are to the working class: perfectly
crafted to exploit the particular tendencies of its target. I mean, just think
about the properties of the typical software engineer who gets into these
things:

1\. They tend to have more disposable income, i.e., they're fat marks

2\. The Dunning-Kruger effect means they think they're too smart to fall for a
scam

3\. Their libertarian attitude means they probably won't make a fuss once they
realize they've been scammed, and just passively accept it instead of
involving law enforcement

4\. Because every one uses different code, any anecdotes about past scams can
always be waved off with "This one is different"

It's all so perfectly tuned to draw in an endless supply of suckers that I'm
almost kicking myself for not thinking of it first.

~~~
uncletammy
I can't wait until I grow up and get the power to downvote comments like this
which contribute nothing of value to the discussion. Your horse could not be
more dead.

$34 billion dollars and many of the biggest names in finance and technology
seem to think there's a little more to the story.

~~~
cloakandswagger
The original commenter belongs to a very persistent faction of people who
openly mock and malign cryptocurrencies despite being _completely unaffected
by them_

My only theory to date is these are sour grapes type folks who are upset that
they've missed the bus in terms of crypto's fantastic investment value.

The only comfort these people get is jeering from the sidelines in hopes that
an eventual collapse will prove them "right"

~~~
csydas
There may be a faction that thrives on the pleasure in misery of others and
specifically those who follow cryptocurrencies, but it's not hard to have
major doubts about Bitcoin given it's tumultuous history up to the given
point. The coin itself has had a rollercoaster of a valuation, pock-marked by
fairly well trusted bit coin operations that just grabbed the money and ran
with it.

The currency itself is beholden to a small group of dedicated miners and their
whims, the fork has been looming over bitcoin for some time now, which is the
only thing that seems to give any value to the other cryptocurrencies as if it
forks it means a potential foothold for other services to get in.

Cryptocurrencies are a real mess, and for a awhile there, the fad was to
attach a new cryptocurrency to whatever service you wanted to try and be "the
next big thing", and it's always been ridiculous.

The idea of a decentralized currency isn't bad in and of itself, but there is
a lot to laugh at in the current history of cryptocurrencies.

~~~
cloakandswagger
Shitting on emergent tech is completely antithetical to the ethos of the
"hacker mindset".

A real hacker would recognize these are the early days of a new technology
with incredible potential. Its tech is disruptive enough to already grow a
marketcap measured in billions, I don't know what is gained from harping on
all the early failures.

~~~
csydas
Because I don' t take it as harping on the tech - it's not the tech that's the
problem, it's the hype and culture around it. There's tons of hype, many
outright scams and ponzi schemes within bitcoin to point to, it's fraught with
outright criminal activity just within trading, not to mention that it's the
payment of choice for Ransomware.

The distributed ledger isn't what people are making fun of - it's the frantic
rush and chaos around using it that is ridiculed, and in many cases,
rightfully so.

Edited additional thought: Come to think of it, I don't think a lot of the new
found SV culture is really as hackerish as it's made out to be - it's the same
business stuff that cyberpunks in stories would snub their noses at and work
to undermine, except it's masquerading as hacker culture - there's a very cool
protocol underneath bit coin that probably will fundamentally change how we do
"something" in the future. But what is everyone climbing over themselves about
with Bitcoin? Get-rich-quick after get-rich-quick schemes and ridiculous
business enterprises.

Silk road I got - buy whatever with crypto-currency, hard to trace, from hard
to find sites on TOR, and a package arrives or a service is done. Cool! But
that's not what the clamoring is about now, and it hasn't been for ages.

That's not a hackerish interest, that's business people playing with yet
another asset to trade.

------
lisper
It is ironic that at the bottom of this post on cryptocurrency scams there is
this teaser:

"For years bitcoin has offered a reliable and inexpensive way to transfer
value around the globe."

Bitcoin is not inexpensive. The cost of mining is actually quite substantial
just in terms of the electricity bill. And this is _inherent_ in the design:
bitcoin's security _depends_ on mining being expensive. If it were cheap,
anyone could mount a 51% attack.

Also, Bitcoin is currently teetering on the brink of a community split which
could lead to a hard-fork of the blockchain, though very few people outside
the community seem to be aware of this. As the old adage goes, past
reliability is no guarantee of future reliability.

~~~
jstanley
> Bitcoin is not inexpensive. The cost of mining is actually quite substantial
> just in terms of the electricity bill.

As you point out, this is on purpose. And the cost of mining bears almost no
relation whatsoever to the cost of _using_ Bitcoin.

~~~
fpgaminer
It probably does. I mean, we pay miners 12.5 BTC to verify ~1800 transactions.
It's not like that BTC is free. When new BTC are created, it devalues existing
BTC.

Put another way, the miners will sell that 12.5 BTC on the market. Selling on
the market puts a downward pressure on the price.

Another way still: If the market cap for Bitcoin remained constant, then it's
obvious to see that for every block reward generated, the price per bitcoin
goes down.

I don't think it's unreasonable to think that that means we're paying miners
$16.5k USD per block, which would be about $9.22/transaction. Plus transaction
fees. It's probably just hard to see that because the market cap for Bitcoin
keeps increasing faster than Bitcoin's natural inflation. Basically, investors
in Bitcoin are paying the transaction cost right now.

~~~
jstanley
I think we're confusing 2 different costs here.

My parent was talking about Bitcoin costing a lot of money (overall) because
of the amount "wasted" on mining. While this is true, it doesn't affect the
costs for sending transactions. Causality actually runs in the other direction
here: as transaction fees increase, more mining revenue is available, so more
is spent on mining.

High transaction cost leads to high mining cost, not the other way around.

You point out that much of the value that is given to miners comes through
devaluing everybody else's coins. That's true too, but also doesn't affect the
cost of _sending_ a transaction. This cost is borne in proportion to the
amount of BTC you hold, rather than the amount of transactions you send.

------
Taek
Is a $500k market cap scam even worth discussing? What about all the ethereum
projects raising 6-7 figures with little more than a whitepaper? And often
even with heavy criticism about a broken security model.

There is no latest scam in cryptocurrency. By the time you've finished writing
the article another has already popped up.

If anything you are helping these guys by giving them visibility.

~~~
bhaak
A $500k market cap is really nothing to write about. Market cap is a broken
metric anyway.

But the article is a nice how-to for your own crypto coin and there were lots
of worse coins he could have forked off than shadowcoin. :-)

------
al2o3cr
The cryptocoin motto: "From each according to his gullibility, to each
according to his greed"

~~~
geogra4
man, whoever is left holding the bag on these is going to be seriously screwed
after the tulips run their course

~~~
davidgerard
Every one of them thinks "man, so close, _next time for sure_ "

------
brilliantcode
It never ceases to amaze me how gullible people are with all these
questionable "crypto" coins being traded on Poloniex.

Price is manipulated but because these don't fall under SEC's turf it's being
looked the other way...

but if anything should keep the Poloniex and Ethereum guys awake is that the
SEC has traditionally _retroactively_ applied a law however far back they need
to.

This means that you should start treating cryptocoins under the assumption
that the SEC would retroactively view it as equity therefore violation of
trading laws.

~~~
danmaz74
Just out of curiosity, why are you singling out Poloniex? AFAIK there are
exchanges with way more alt coins.

------
Sami_Lehtinen
There are many rumors circulating around OneCoin being a scam. Afaik it hasn't
been (yet) proven to be a scam.
[https://www.onecoin.eu/en/](https://www.onecoin.eu/en/)

~~~
sireat
If you consider that most EU equivalents of SEC have issued warnings against
OneCoin I would say that counts as a scam.

The amazing thing is that OneCoin does not even have a public blockchain or
any chain.

Probably just an Excel spreadsheet with periodic applying of *2 formula.

It is just a regular pyramid which has nothing to do with cryptocurrencies
besides the name.

I get regular questions from non-technical people who have been asked to
"invest" in OneCoin.

It is hard to tell people to stay away.

