What I really don't understand about this shitcoins is the scale of it. When I read this story I basically thought "ok, but you're going to spend a load of money pumping but there's no way there's liquidity for you to actually perform your dump". But if you look up DOCK today you'll see its market cap is $14m and it's daily traded volume is $1.5m. I would get it that you could move some of these coins using a few bill boards and some sponsored ad reads if they were tiny volume traded, but the implication of this is that millions of dollars are moving back and forth every day on a coin that has absolutely nothing going for it. Who is doing that? There can't possibly be retail moving in and out of this stuff. Really I kind of assume this all has to be wash trading right?
Wash trading aside, you're right that scams like this need new money. But consider who the target is here: would-be smart guys who are also would-be rich guys. In this new gilded age, we all know there are plenty of people getting wildly rich. Looking at who gets rich, and how quickly it can happen, it's easy to think, "What do they have that I don't have?" (There are answers to that question, of course, but not ones these people are eager to hear.)
That's a view very much encouraged in the cryptocurrency culture, and in the day-trader culture that preceded it. That with smarts and a little luck, a guy can get the riches he was destined for. The people who fall for it of course never ask where the money is coming from, because if they did they'd figure out it was suckers like them.
So when they see an ad that says, "ITS YOUR CHANCE TO BUY THE MOST POWERFUL CRYPTO COIN" they don't ask why the chance is specifically theirs. They don't ask what "powerful" could mean for a currency. They don't ask who's trying to convince them, or why the convincer can't even punctuate a sentence. They say, "Yes! It's my chance, just like I know I deserve!" And then they put in their engagement ring fund or the house downpayment fund or the money they borrow from family.
And very shortly that money ends up in the pockets of assorted assholes, who are now better funded for their next scam.
Here's the thing I wonder though. If you sat each one down and explained that the whole thing was basically a ponzi scheme, or like a lottery where everyone loses except one person who wins big, I'm not certain you wouldn't see a majority of them say "Yeah, I know," or just keep "playing" after hearing the explanation. To borrow the cliche, you can't really use logic to change someone's mind when they didn't use logic to make up their mind in the first place. Also, gambling is powerfully addictive to a lot of people.
This mentality was common with penny stocks around 1998 (maybe still true). But the belief (and reality) was that you just didn't want to be left holding the bag at the end. If you got in low enough and got out soon enough, that's all you wanted. So it was all pump and dump. No one believed in the companies, but they believed they could be in early enough and out just in the nick of time.
At a larger scale, I'm not sure the difference with the NYSE or NASDAQ. I don't vote w/ any of the companies for which I own stock. I just hope I buy low and sell when it is much higher -- just the volumes are large enough that small players can't pump the value of the stock -- but reddit and TikTok has shown even this world can be gamed.
This is the mentality of a family member of mine who was in early on BTC but also sold early (Liked mined lots at 10cents each, sold all at $10 each).
He is up on every new shit-coin, he spouts a little bit about the world changing proposition, he basically does it because "hes not missing out again".
His idea is to drop $100-$1000 as early as possible (like at the ICO or pre-buy whatever) and hope one of these things 100x'es.
Part of him knows this is a fools game, but he is "smarter" and still doesn't want to be left out yet again.
In 1999 I met a guy who had missed out on a business opportunity around those. He had just bought into what he was sure was the next big thing: Y2K bracelets, which here stood for "Yield 2 King". He was sure that god was sending him this opportunity.
I had an Uber driver just like this. Missed out once, never again. He also gave me card with a referral code for some shitcoin that you 'mine' by tapping the app once an hour.
On difference is dividends stock buybacks, and physical assets.
Companies can support higher valuations buy owning more stuff, if their market cap is lower than the stuff they own, then they’re clearly underpriced.
If a company starts paying out higher dividends due to higher profits, then their stock is worth more because otherwise the dividend repayment would trend towards zero (i.e. dividend payment per share ends up larger than the share price)
If a company is doing stock buybacks, then they’re using their profits to prop up the price of their shares.
But in all of these scenarios, the companies are producing profits, which are directly or indirectly used to pay for the increase is share value. Shitcoin on the other hand are zero sum, they produce no new value from their existence, they just store value and move it around a little bit.
You're talking about current value - true, companies have that - but a huge part of stock prices are expected future value, which (by its nature) can be quite speculative.
Well sure. But it’s substantially less speculative than shitcoins.
Some degree of skill can be used to understand if a specific company is going to improve its situation long term via sound investments in new projects. You can look at companies stated goals and strategy and decide for yourself if those goals are valuable and if the strategy is viable. And thus make an educated call about future value (with appropriate error bars).
With shitcoins there’s nothing to analysis. They fundamentally don’t do anything. Speculating on shitcoins is just trying to guess what a disorganised mass is going to do in the future. There’s no reasonable way to gain any understanding of what their behaviour is going to be, and if it’s going to increase or decrease the value of the shitcoin, because it’s a disorganised mess.
Ultimately the value of a company present and future derived from the fact that it’s organised, and broadly predictable.
Shitcoin value isn’t driven by anything organised, or predictable.
One difference with NYSE or NASDAQ is that those companies could release a dividend or get bought and either of those events would put actual hard currency in your pocket and the price of the stock is (theoretically) based on those events happening.
Gambling plays a part, but I think it has more to do with the in-group dynamics of the crypto community. The Folding Ideas documentary on NFTs had an interesting segment on this topic.
Crypto forums use a lot of in-group language to communicate their shared belief of the crypto project (i.e. hodling, to the moon, etc., etc.) in order to demonstrate their belonging to the community and they summarily reject skeptics essentially as non-believers. It's a quasi-cult mentality but without a true individual leader. These forums then become echo chambers that serve two primary purposes: to continue purging skeptics and to repeat the crypto mantras over and over again without thinking critically. This is effective because it tends to attract people who may exhibit significant intelligence in other aspects of their lives. Where people really get into trouble is when they start thinking: "of course I'm too smart to get wrapped up in a dumb ponzi scheme, and this definitely isn't one."
This makes it really easy for the pump-and-dumpers to manipulate these people into making more and more risky crypto purchases.
One description I've heard is web 3.0 people are mostly people who saw the financial crash in the late aughts and thought the only thing wrong with it was they didn't get to participate directly.
A lot of people got rich from Madoff’s Ponzi scheme. The problem is they never cashed out their gains. You see the same thing in these kind of crypto trades - yes, you’re participating in a Ponzi scheme, but it actually works as long as it does keep getting new money to buy out your entry position… which can continue happening for quite a long time before actually collapsing.
There are also layers to the Ponzi scheme. The alt-coin is just the first one. Even if you cash out for a profit, you probably didn’t even sell it for fiat directly, but sold it for some “less risky” currency like Ethereum or Bitcoin. One might argue you’ve only moved from one a smaller Ponzi scheme to a larger one. But then again… trading across pools of risk is widely accepted as a method of generating wealth. So who are we to judge?
For sure. It's only a profit when you directly hold more cash than you put in. Madoff's victims didn't lose their money when he finally crashed. They lost it when they put it in.
A friend of mine made more than $10 million in crypto essentially knowing full well that it was a Ponzi. He simply believed that he could get in and get out quick enough to find a bagholder and he was right.
As much as I enjoy studying scams, I am clearly not suited to be a scammer, because I wouldn't be able to enjoy that money. Me living large off of the suffering of others would taste like ash.
It's shocking to me how many people don't really seem to mind so long as their victim is faceless and nameless and I think that's one of the reasons the blockchain is so compelling for this sort of scam. Ripping off an actual person is much harder than ripping off some dumbass on some computer somewhere in the world that you never have to see or hear or think about once you've secured the bag.
I don't think the arc of crypto looks much different if you subtracted the grifters. There were enough true believers in the space. I know people who have sold $1m of crypto but still HODLing 90% thinking it will go up.
The reason ponzi schemes are so insidious is because it's logical to participate in them - as long as you expect there to be a bigger fool to offload to.
This reasoning worked a little better before the Fed raised its rates.
> The people who fall for it of course never ask where the money is coming from, because if they did they'd figure out it was suckers like them.
This is the case with all forms of gambling. I think that they know that the money is from others less fortunate. However, human nature seems to make us believe that somehow, we will be the lucky one.
Many do play poker, but most play at fair games of poker and they play it for fun.
None of that applies to the suckers who bought DOCK based on market manipulation, which is generally a crime. [1] This is more equivalent to Three-card Monte, [2] which may look like a fair game involving cards, but which also preys on the would-be smart.
Yes, so basically certainly what’s happening here is the crypto guy bought subscribers so he looks popular so he can charge to shill. Scams all the way down.
Yup. Wash trading by bots is endemic throughout crypto, worse on certain specific exchanges but prevalent throughout. Very very little of the volume is from real live people buying or selling!
Not necessarily wash trading (though it does occur), a lot of it is just perpetual chain reactions of bots. Remove exchanges with no or negligible fees from the calculation and the volumes for these coins tend to plummet.
> There can't possibly be retail moving in and out of this stuff.
There’s a couple different angles with these coins. First, there’s plain old hype where regular people see XX% gains in a day and jump in. There’s also groups that decide ahead of time to do coordinated pumps, which helps feed into the hype. There’s also a LOT of bots that follow these trends and also ones that simply gamble by buying up some amount of a coin the instant it appears on Uniswap et al, with the assumption that it’ll probably pump at least a bit in the short term.
What do you need to have a daily traded volume of $1m? Lets find examples.
E.g. 1 - you need e.g. 1k people trading $1k
Is that unrealistic? I don't know. The world is a very big place with a lot of stupid people. But wait! all of these morons use stupid leverage. Many of these platforms give you 100x. Yes, really.
Here's a few more ways that you can get $1m daily:
e.g. 2 - 1k people putting up $10 with 100x leverage
e.g. 3 - 100 people putting up $100 with 100x leverage
Leverage can show you a short term source of revenue, but what we're saying here is a few things: Firstly, they're still going to be paying the fees and spread, so they're still losing tonnes on fees (and this is massive volume per day). That's just not sustainable, especially if people are getting wiped out with these pump and dumps, if it's done against people on leverage someone is going to be stuck holding the bag.
On the pump phase, everything could work, even if it's not sustainable and even if everybody suspects that is not sustainable.
I'm old enough to have lived the .com bubble as an adult, and almost everybody knew/suspected it was a bubble, and that 95% of the business would fall at some point in the near future. But if you believed that it would last at least one more year, and you can squeeze a 20% profit, and you can do it leveraged 10x... it's just too tempting to many.
Fast forward 7 or so years, housing bubble, same tune: it was a main talking point, everybody knew it was a bubble and unsustainable, but very few predicted the burst to 2007 (and even the ones who did were the same that predicted it to 2004, 2005 and 2006). You are in 2004, everybody saying "this is a bubble" and waiting. In 2005 people still waiting looked like losers, while 2004 buyers laughed and I-told-you.
Nobody wants to be a loser, and some people should beat the market or get fired. Only way to beat the market? Ride the bubble. And the rational way to ride a known bubble is leveraged: you enter the market, profit heavily, and ideally exit (it almost never works). You know you cannot ride a bubble expecting it to rise forever, you know it's going to crash, so you need to enter and exit ASAP.
How is the leverage working here beyond providing a convenient lie.
100x$100 is $10k no matter how much you lie that your shitcoin is worth 100x what people will pay for them. And that's diminishing your yield making it marginal whether you're matching your opportunity cost.
I thought leverage was effectively borrowing on anticipated gains. So I would spend $100 to, get credit to the tune of $10k, then buy my crypto with that. But, here we're talking about people buying a coin and the _seller_ saying the coin is worth 100x and so skipping the step of using fractional reserve to 'create' the funds (the loan amount) to exchange for crypto and just going straight to a deceit.
With leverage there's a debt written to counter the credit, here that doesn't seem to be happening.
If the coin is trading at whatever price (say $100 a piece), you can leverage by 100x doing this:
- Put $100 as deposit.
- They borrow you 10k to buy 100 shitcoins for $100 each (instead of 1 you can really afford), so 10k of shitcoins with the condition that if the coin price falls below $99 your position is liquidated and you lose all.
Note that there's no seller saying "the coin is worth X", it just trades at that price.
>They put in $10 to borrow 100x$10 to buy $1000 worth of the coin. //
If that is all with the coin seller/creator then you're not actually borrowing the money they're just saying 'that $10 token you bought from me 1s ago is worth $1000, you're rich'; you bought $10 worth of coins, the market price is $10, there's no actual leverage involved it's just a deceit.
If the seller is taking the $10 you pay to a different institution, borrowing $1000, then buying the coins, then legitimately they can say it's $1000 of coins. It's still clearly a scheme. The company lending that money are morons in this case unless they are doing it knowing full well that they are going to need to pursue people for the debt.
> But, here we're talking about people buying a coin and the _seller_ saying the coin is worth 100x and so skipping the step of using fractional reserve to 'create' the funds (the loan amount) to exchange for crypto and just going straight to a deceit.
This is a meaningless word salad.
You have an account with an exchange. Taking a position with leverage 100x just means that every time the instrument moves $1 up, your account goes $100 up, and when it moves $1 down, your account goes $100 down.
You just made me realize how much cash trading platform probably are making using leverage. That explain why they were so quick to add theses coins. I'm curious to know how they manage the risk though.
Hmmmm do fees scale with leverage? I don't know if that's true...
My understanding is that leverage is profitable to trading platforms, not because the fees are bigger, but because bigger leverage is "more fun" and so people trade more.
I realize comparisons to Tulip Mania [1] aren't necessarily apt, but listening to the home improvement contractor I hired explain his crypto strategy certainly did leave me with that "peak bubble" vibe [2].
I know that feeling. I was on a subway platform when a rando started explaining to me how she was investing in bitcoin mining. She was a real estate agent with no tech knowledge, but somebody she talked to persuaded her to buy and run hardware.
What really scares me is that this was easily 5 years ago now. At the time I too thought "peak bubble". The extent to which this space has metastasized blows me away. Normally a scam dies when the novelty wanes and it runs out of suckers. But the cryptowhatever space has continually generated shiny new illusions for people to pump and dump. I'm now wondering if we've entered the age of the permanent floating scam, where "there's one born every minute" is enough to provide an eternal flow of suckers for an ever-shifting constellation of predators and useful idiots.
> Normally a scam dies when the novelty wanes and it runs out of suckers. But the cryptowhatever space has continually generated shiny new illusions for people to pump and dump.
I think what's happening here is that there's both scams and legitimate usages. The legitimate users are having a hard time advancing because the scammers dominate the ecosystem and the scammers perpetuate because the legitimate users/developers keep using/developing. We see big companies investing in these companies. We also see scammers funding research (to help prop up the bubble and legitimize themselves).
I think this is what separates crypto from tulip mania. At the end of the day, tulips had very little actual value. On the other hand, crypto does have some value, but people are convinced the technology is much further along than it actually is and thus the bubble refuses to pop. What the actual value of crypto is is up for debate. But I think we can all agree that it is neither zero nor what the current market reflects (at least the current state of crypto).
I have spent the better part of a decade looking for legitimate uses. By which I mean legal, value-creating activities that aren't served better by some other technology. The very best I've found is that it's good for some light financial crime. Some money laundering, some ransomware, various sorts of scams and fraud.
When I compare Bitcoin's paltry real-world use versus, say, M-Pesa and Venmo, which target the same initial uses as Bitcoin, I think it's especially easy to see that the legitimate problems were long ago solved pretty well. So a decade in, I'm comfortable saying the actual value is near enough to zero that it makes no practical difference.
I think there is real value in having digital cash. That is, a digital currency that is both private and secure. I'm thinking something along the lines of zcash though, not bitcoin.
I agree that there are other technologies that solve a lot of the same problems cryptocurrencies serve, but I think your search criteria is wrong. You're looking for legitimate users instead of looking for legitimate usecases. Since the tech is new the only legitimate users you're going to find are fanboys and geeks. This is going to tell us very little about real world usages. If we judged a technology's use case by the number of legitimate users then we'd never invent new technologies because there are never legitimate users using technology that doesn't exist (and very few when it is new). So I don't understand your search criteria.
There are many big fin companies investigating and using different cryptocurrencies though. Whether you call these legitimate users or not is very debatable though.
I think this shows a very poor understanding of technology adoption cycles:
> If we judged a technology's use case by the number of legitimate users then we'd never invent new technologies because there are never legitimate users using technology that doesn't exist (and very few when it is new).
This is definitely not true. Take the internet as an example. From its earliest days it was practical for its initial users. Then there was a long virtuous cycle of increasing capability and increasing users. Along the way, many of the new technologies had plenty of plausible initial users. E.g., look at the initial proposal for the WWW: http://info.cern.ch/hypertext/WWW/Proposal.html
You might also read "Crossing the Chasm", which describes the typical tech adoption lifecycle, who early users tend to be, and how one gets from there to a real success.
> I think there is real value in having digital cash. That is, a digital currency that is both private and secure. I'm thinking something along the lines of zcash though, not bitcoin.
I believe you think that. But I don't think the evidence bears you out. For most people digital cash already exists, and has since the days debit cards became popular. Bitcoin's actual use is a rounding era compared with M-Pesa's transaction volume, let alone debit and credit card use.
> There are many big fin companies investigating and using different cryptocurrencies though. Whether you call these legitimate users or not is very debatable though.
Sorry, but no, there's no real debate. It's true that many of them have investigated, because some VP saw something buzzy enough that a pilot project would give him a career advantage. But it's also true that real financial companies are actually doing very little with cryptocurrencies, and it's less over time. One could argue that's because major financial companies just don't get it. But I think the more plausible explanation is that they see a lot of risk, especially reputational risk and regulatory risk, with comparatively little offsetting reward.
> For most people digital cash already exists, and has since the days debit cards became popular.
I don't think exchanging money that is tracked and the data is sold is privacy preserving and akin to cash. Honestly, I feel like you didn't read my comment but just ranted because I said cryptocurrencies might have some value (after stating that the vast majority of it is scams).
I understand that for you, being able to secretly use your money has value. Setting aside the extent to which that may not make sense (money is inherently social), it's still not something most people care about. In the US, use of actual cash is declining rapidly, going from over 30% of payments to under 20% in less than a decade. In many countries, it's lower still.
I get that there are some people who have practical needs to hide their transactions. E.g., criminals. And there are some people who, as you, have an emotional or ideological desire for financial secrecy. But I don't think either group is sufficient to drive real adoption of cryptocurrency as a common payment mechanism. The former group is self-limiting; they attract police attention and regulatory scrutiny and create branding problems. And I think the latter group is too niche to matter enough to the rest of the payment market.
Maybe I'm wrong, of course, but after a decade of asking for real uses and getting back handwaving, I'm not sweating this one.
You're right, its a perpetual scam. Every day there are thousands of kids who get old enough to think that they can get quick rich by being part of that scam. Some people exit the "market", many more enter it. That's a serious problem and I don't think it will end soon.
That's the reason why a lot of those cryptocurrencies didn't go straight to zero in the last month or so, there are just more morons "buying the dip" and expecting that new money will come and create another hockey stick (and unfortunately it will as explained above).
I didn't think Bitcoin was a bubble 5 years ago. The only people I knew using it were using it to buy drugs, and the price seemed to reflect that utility plus the novelty of its implementation. That real estate agent probably did quite well for herself, even at current prices.
Depends upon her timing and what she was doing. Bitcoin had a peak in late 2017 and then fell 75%, taking 3 years to recover. If whatever she "invested" in was even valid, it's plausible that she made her bet based on rising prices. Or that the hardware became obsolete sooner than she was told. Or that she doubled down based on thinking the fall was a blip.
There are a lot of ways for amateurs to lose money, and many of those ways are, as here, engineered by the people eager to take advantage of amateurs.
I guess it just feels a little elitist to assume she didn't know what she was doing because she was a real estate agent. She definitely was a part of the scene way before most people, so hindsight makes me think she should get some benefit of the doubt. Like yea, she sells real estate, but maybe likes to socialize with a more tech-oriented crowd, or used to work in tech herself but chose real estate to have better hours, etc.
I'm not assuming it was because she was a real estate agent. I specifically said she had no tech knowledge.
It's nothing personal against real estate agents; half of one side of my family was in real estate. What makes you good in real estate is mainly dealing individually with people in a sales-y way, plus moderate knowledge of your local property market. It requires only 9th-grade math and no tech savvy.
Is it possible she was also a tech genius? No. Because she not only said she wasn't into technology, she also quickly demonstrated that lack of knowledge. But more importantly, she was excited about bitcoin, which even then was obviously a technology that was not good for much besides creating a zero-value, highly hypeable speculative instrument.
You can frequently tell how tech savvy someone is, at least to a degree. Just like someone can tell I don’t know anything about cars within a minute of talking about cars.
For me it was minimum wage workers at a Jiffy Lube -- folks that probably don't have much disposable income believing they're going to 10000x their investment and be instarich.
You can see this on reddit too. Find a relatively new/unknown coin thats starting to get "next Doge/Shiba" hype on crypto blogs then look for a subreddit for that coin. You'll find quite a bit of people who clearly are working low end hourly wage jobs that are putting sizable percentages of their paycheck every couple of week into the coin. The sub will be littered with posts like "I just bought another 1 million JindoCoin! To the moon!!!!!" They are all hoping for the moonshot return that turns them into millionaires so they can leave the crappy job.
The ones near me in SoCal let you liquidate 2.5K/day with an SMS verification and 360p selfie. In Europe you can do magnitudes higher and it's even laxer. Do the cameras actually turn people off? Hell no. Most people using the machines are networked mules sourced from Craigslist. What legit use case is there for paying the crazy 17-30% premiums if you have other options? Whales have always had OTC and the average dude can probably pay less in taxes selling on even a US-banked CEX.
I know a guy who owned a sizable exchange at one point in the 2010s. Today he wishes he had never stepped into the world. The real shot callers are a mix of CBOE quants and international organized crime players. The narratives exist for a reason.
I'm sure you can guess - basically boils down to the usual combination of "buy the dip" and "line goes up" that you often hear repeated on various YouTube channels and sub-Reddit's. In his defence, he did not use the phase "to the moon" even once. We did probe a bit, out of morbid curiosity, he was down something like 50%. There wasn't much deeper knowledge of the technical aspects of crypto or the various implementation differences, key management, etc. Not to mention traditional investing ideas like volatility and risk. For all appearances, just looks like a victim of the hype. He does do good reno work though and we pay him well for it. If he wants to buy magic beans with it, that's up to him.
There's a (possibly apocryphal) story [1] that Joe Kennedy got out of the stock market just before it crashed when a shoeshine boy gave him investment advice, which he saw as a sign of a bubble about to burst.
0xbadc0de5 revists this classic story, with a home improvement contractor replacing the shoeshine boy.
The question was mostly rhetorical, intending to point out that getting investment advice from a home improvement contractor is no different than getting investment advice from a software developer on Hacker News. There was an implication that, since a home improvement contractor works with his hands, he's as stupid as a shoeshine boy.
It is significant that the people being taken aren't just teenagers and adult wastoids with addictive personalities. But rather professionals with (otherwise) stable careers.
Who were led to believe that crypto was legit, and a way to finally get their fare share.
TFA isn't describing a Ponzi scheme because (as far as we know) the person doing the machinations doesn't run the scheme (underlying "coin") and doesn't use new investors' money to pay off existing ones. It's just a pump and dump (buy while something is cheap, hype it up to make the price go up, then sell at the top).
This shifts the work for your position to another person, and in the negative. Certainly it makes your life easier, but in traps you in a bubble of your own creation.
It’s essentially the same as admitting “I can’t prove it, so you have to prove the inverse” and hoping the other person will Marty McFly for you, and waste their time instead. It’s a solid method for reinforcing confirmation bias because whether they try or forget about it and move on you get to continue in your assumed position.
> There is a problem in distributed computing that is sometimes called the Chinese Generals Problem ... the original title of this paper was The Albanian Generals Problem ... The obviously more appropriate Byzantine generals then occurred to me.
Sure, bitcoin "solves" byzantine generals the same way TCP "solves" it. The theoretical construction is probably unsolvable, like the halting problem. In practice, you can "solve" the halting problem for most inputs too.
In the general construction of byzantine generals, there's essentially an adversarial agent preventing arbitrary communications. As far as I know, a distributed ledger can't generally survive in such an environment. Nor can TCP.
All scams are actually denominated in a currency that has actual value. The goal of a scammer is for them to obtain something valuable (US Dollars, say) from their victim and leave their victims with something worthless (a crypto coin, say).
It doesn’t. Any more than tulip mania invalidated the utility of planting bulbs to get flowers to come up in the spring.
The posts you are responding to never said blockchain consensus protocols don’t work. All they are saying is that hype coins tend to have the shape of a scam.
Now, if you want to get back to us just as soon as you find an application for blockchain consensus protocols that isn’t basically a hype coin, we’d be happy to hear about that.
IPFS is not a blockchain consensus protocol though? And the first five hits on google for storj talk about its investment potential, so.. that looks a lot like a hypecoin to me. But that’s not really important.
Personally I haven’t even seen the goalposts in this interaction since you decided that, in a discussion of a shitcoin pump-and-dump scam, the fact that said coin is built on a solution to the Byzantine Generals problem is somehow important, and… means that people shouldn’t criticize scammers taking advantage of credulous investors to fleece them?
It does not matter if a shitcoin is built using quantum manipulation of the space time continuum, if all that is being done with it is selling it to rubes to obtain their dollars.
You can be excited about blockchain, that’s fine, and you can believe it has actual value. But when people point out that your favorite technology is actually continually being used to perpetrate scams, you should get angry with the scammers, not the people who are pointing that out.
Personally, I like JavaScript. When people shout about tracker-infested slow loading websites, I don’t respond by saying ‘you’re wrong because actually the object dictionary duality in JS is a really elegant system’. That doesn’t matter. I reserve my anger for the people who are using JavaScript for evil.
>Hellium, which is a wireless access point blockchain, there are a bunch but you aren't actually interested in any of this.
You fell for the trap and ignored the one project that meets your requirements...like I called.
You're not a genuine actor in this conversation.
And when people point out that any asset can be used, and is used to a much greater degree, you ignore it.
You are literally projecting yourself on to others.
Feel free to be Paul Krugman on this tech stack, it's not going away because of it's utility. Just because there are assholes that scam people doesn't invalidate it's use cases..
Same applies for the USD.
Why wouldn't percentages be relevant? If one currency delivers a massive amount of utility and value to society while a tiny fraction of it is used for illicit purposes (i.e. USD), and another currency is overwhelming used for illicit purposes, with only a tiny fraction being used for actual utility, that is a meaningful comparison.
You're not making an argument here, you're just saying "percentages bad, absolute value good". The only argument you're making is that using percentages "hides" the negatives USD, but the reverse of that is equally true (absolute values hides the problems w/ cryptocurrency).
My argument is that the net impact of USD is positive, while the net impact of cryptocurrency is negative.
crypto solves the byzantium generals problem, sure, but that's not a problem we were struggling with in the financial system, and it creates more problems than it solves
> Knowing who to trust is absolutely a major problem in financial networking, whether it's crypto, digital or physical.
Solving the Byzantine Generals problem doesn't help you know who to trust.
With a large enough network, it makes it extremely difficult for malicious actors to subvert the process of exchanging money.
It does nothing to solve other crucial aspects of "who do I trust with my money", such as having recourse when someone scams you into giving them money.
In fact, the technology's spread has enabled terrible abuses of trust like cryptolocker attacks, and has probably made scamming much more profitable and practical.
If the solution to those problem has even a whiff of "user error" in it, then I submit that the problem is not actually with the users (it so rarely is).
I don’t think so as evidenced by financial systems moving trillions of dollars that have figured out who to trust. There are exchanges that have “solved” the trust issue and they seem pretty solvent and successful.
I mean, the US has got some really sharp and explodey fiat, arguably the most fiat fiat in the world. But we stopped pretending it was backed by anything else in the 70s.
Equating shitcoin pumping to central banking is hilariously absurd.
While I do agree that central banking has gone too far, central bankers--at least in developed countries--are not on some blatant mission to rob people of money for their own enrichment. Sure corruption might happen on the fringes, but it's not the primary intent.
Pump and dumps are pump and dumps. The primary mission is to fuck others over.
It is absurd! At least victims of shitcoin pumping are putting their money into the fraud willingly!
> are not on some blatant mission to rob people of money for their own enrichment.
Yes, they are. The point of inflation in contemporary mainstream economic theory is to lower the nominal price of labor and increase employment. So if "making themselves look like they are doing something" counts as "their own enrichment" then yes, central bankers are robbing people of their past value of their labour, especially low income labourers, to make themselves look like they are doing the country a solid.
CS Lewis quote comes to mind: "Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience"
>central bankers are robbing people of their past value of their labour, especially low income labourers, to make themselves look like they are doing the country a solid
No, that's not at all the reason. Low targeted inflation is to prevent the wild economic swings that preceded central banking as wild inflation and deflation routinely wiped out people, including low income laborers. Take some time with this list of historical US recessions [1]
Virtually zero people hold pure cash as their only wealth, so virtually zero people lose value over time from low inflation. Other goods like real estate, stocks, etc., rise with inflation. Wages rise with inflation. So your low income laborer part getting robbed makes no sense.
The reason inflation target of zero is not used is to avoid deflationary spirals, a lesson learned again over history through repeated painful events.
The evidence on these is so solid every single country, all 200ish choose this system. It's not a grand conspiracy of evil wizard people. It's what educated people choose as a solution to past problems. If other systems worked better for an economy, don't you think at least 1 of 200ish countries would be doing it?
Well the united states went from 1860-1900 with deflation and things were pretty good. The us went from wartorn backwoods country to world power, so it's not clear to me that deflation is necessarily "bad for countries". Re: conspiracies. There is also no conspiracy to make suvs more and more atrocious but the incentive and competitive structure made it so that entire classes of cars disappeared (e.g. station wagon) that's not an argument that the station wagon is inherently bad (the Toyota Prius V is a fantastic vehicle), it's just not what people chose because of mass action.
Countries chose inflation because it's less obvious way to tax people, and because screwing over labor makes you short term competitive in trade markets (they took er jerbs). Especially as other countries inflate. It's an easy choice to make.
1860-1900 most certainly was not "pretty good" for people living then. Read some. The Long Depression [1] saw nearly 20,000 businesses fail, ten states went bankrupt, unemployment soared, some places saw 25 percent unemployed. Multiple panics destroyed significant assets. The period was so bad that it directly led to creating the Fed because the people wanted the uncertainty and suffering to stop.
> Countries chose inflation because it's less obvious way to tax people
I think you're missing significant understanding about money and inflation.
Explain carefully how inflation taxes people to the benefit of the govt. Your explanation should carefully distinguish between the Fed and the Treasury, the three methods the Fed used to influence the rate, the laws and accounting both use.
I'm pretty sure you have no idea, and are simply making up ghost stories to cover misunderstandings.
So, explain the process. Because I do know in detail how these pieces fit, and nothing like your beliefs occur. So you explain it.
Oh, and by the way, inflation helps nearly anyone with debt such a college loans, car loans, or mortgages, because it lowers effective payments. Given most people have more debt than cash as savings, inflation helps borrowers and costs lenders.
Honestly the description of the horrors you provide could apply to any 50 year period of us history. So if it's all the same, how about we don't fucking steal from the poor to give to the rich?
> Oh, and by the way, inflation helps nearly anyone with debt such a college loans, car loans, or mortgages, because it lowers effective payments
Only if you are getting pay raises. We know the workers return on productivity has stagnated since 1970. Why do you love stealing from the poor?
Lowering the cost to borrow by volume mostly helps finance: big corporate bonds, and financial instruments like shorts and options.
It's not the same, as the evidence I just posted proves. That you don't care to learn it is telling. The string evidence that things were worse is what led every country to switch to central banking.
Or are you that much smarter than every economist and banker on the planet? Maybe you should post a paper with your evidence. Overturning over a century of data across hundreds of countries would make you famous.
>Only if you are getting pay raises. We know the workers return on productivity has stagnated since 1970
First, the "only if you are getting pay raises" is false. It would depend on the loan and wage.
Also, your two claims do not even make logical sense. Either they got pay raises or incomes did not remain flat. (Hint: they got pay raises, AND they got increases in total remuneration, which includes things besides wages. And yes, wages are flat, but remuneration and total cost to employ (both data series the BLS tracks which you can check yourself) have increased).
Want proof of all this? It took me one google of "do wages match inflation over time", and this [1] from the first page provides historical graphs showing exactly what I claimed.
So yes, people did get raises to match inflation (which is trivially checkable), their effective loan payments did decrease.
Please at least put in some effort to check the numerical evidence before you post more stuff you just pull from god knows where.
>Lowering the cost to borrow by volume mostly helps finance: big corporate bonds, and financial instruments like shorts and options
You apparently have no idea the difference between cost to borrow and inflation. The cost to borrow is the interest rate - no one knows future inflation well enough to make a loan with such wizardry. Higher than expected inflation simply helps borrowers and costs lenders. Inflation the other direction works in the opposite direction.
But cost to borrow and inflation are completely different things.
Since you're just making stuff up, please provide decent sources (not opinion blogs - decent polling or data places are good) for any further claims. You're too untrustworthy for me to waste more time on.
> inflation in contemporary mainstream economic theory is to lower the nominal price of labor
Erm. Wut? Pray tell which economic theory espouses this? The point of inflation (1-2%) is to prevent deflationary spirals. Presuming there is some maximum productive capacity, wages will necessarily go up with inflationary currencies ideally in line or exceeding inflation. Bank interest rates also ideally match the inflation rate.
The only reason nominal wages have remained suppressed in developed nations has been outsourcing. This is not a function of the central bank.
"even in the long run, it’s really, really hard to cut nominal wages. Yet when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis"
Paul Krugman is about as mainstream an economist as you can get
> wages will necessarily go up with inflationary
What exactly is the mechanism for this? I'm reminded of this video:
If your goal is to stop stealing from the poor to give to the rich, then yes, any inflation is bad. That might not be your goal. Your goal might be to continue stealing from the poor to give to the rich, in which case inflation is good.
I think you are entirely misunderstanding what Krugman is saying.
*The aim is to avoid a deflationary collapse, not to cut wages.* Let's say you have a typical economic cycle in an apple producing economy with real growth and a fixed currency. Since you have real growth, you're producing more and more apples with the same resources. This is great! Apples are cheap! Except you now have created a behavioral problem.
Since the price of apples decreases with growth, a farmer needs to cut costs to remain profitable. In an ideal world, this would mean cutting wages. In a real growth scenario, the workers should be able to purchase more apples despite the wage cuts since the price drop in apples should exceed the wage cut. In the real world, this farmer would lose his head for cutting pay--wages are sticky. So instead of making the optimal choice (paying people less in nominal, but more in real terms), the farmer will fire people. This is BAD.
Again, I'm going to keep pounding the table that the only reason inflation has gotten this out of hand is due to the *immense size of the stimulus.* The central bank raising interest rates would have only deferred that inflation into the future.
> Since the price of apples decreases with growth, a farmer needs to cut costs to remain profitable.
No? The cost of inputs will also go down?
> The aim is to avoid a deflationary collapse
I am literally quoting him in the article. It may be that the aim is to prevent a "deflationary collapse", but it's still inextricably "trying with no guarantee it will work to prevent a deflationary collapse specifically by cheating laborers out of their wages"
It's even encoded in your explanation: you are preoccupied with saving the farmer's skin, not with being fair to the laborer.
For the record, I am no Marxist, I'm very much an advocate of free markets, I just don't like cheating laborers. Inflationism is basically just corporatism/trickle down, made palatable to liberals.
Do you concede that inflation robs people of purchasing power? That's the most important point from that.
I can understand that the "for their own enrichment" part of that sentence is a bit debatable. It's true (as far as I know) that the central bankers are not personally building giant Scrooge McDuck money bins and siphoning cash directly from their monetary policy decisions in there for swimming purposes.
However, you can point out that the money and power they gain is due to their willingness to keep business as usual (inflation) churning. And let's not forget that the central bankers can manage to get high 6 figures speaking engagement fees, at least after they're out. I can't be sure what level of quid pro quo goes on with all of that, but they certainly do manage to enrich themselves by playing their part and continuing the generally policy of inflation.
>Do you concede that inflation robs people of purchasing power? That's the most important point from that.
And then people get cost of living raises - that's why almost all income groups have seen wage growth in inflation adjusted dollars since, well, 100+ years.
Here's what happens when central banking didn't target low inflation [1]. Read through it for a better understanding of why the current system is better than any that preceded it.
> Do you concede that inflation robs people of purchasing power?
Think this through. Whose purchasing power? If you have a billion dollars and I have nothing, and prices go up 2%, which of us lost purchasing power? Keeping in mind that inflation drives up wages too?
It's absolutely true that central bankers and other cartoon villain fatcats are trying to enrich themselves. But the way they do that is by investing their wealth in the economy, and then manipulating inflation to make the economy grow as fast as possible.
> Do you concede that inflation robs people of purchasing power? That's the most important point from that.
It's not supposed to. The policy rate is supposed to match the inflation rate on average. When the fed says 2% inflation target it also implies that the fed funds rate should be at 2%.
Most of the runaway inflation you're seeing today is because the *government* spent way, way too much money which put a massive strain on limited resources. Blame the CARES Act + American Rescue Plan. You want to see corruption and pork spending? Look at the $3 trillion in deficit spending across the Trump and Biden administrations.
I always wondered about those crypto ads for shit coins. I was walking through Dubai airport back in November/December last year and I saw "Floki Inu" on pretty much every screen, they looked like this [0].
I assumed it was some pump and dump and wondered who was behind it and how they had enough money to buy all those ads. Turns out it's not that expensive and the returns look like they are worth it...
That Floki one was all over the London underground last year as well. They used the tagline "Missed Doge? Get Floki", which is about as bad as the other one I kept seeing, something like "When you see crypto on the underground, it's time to buy" by some exchange.
Interesting! These were on a bunch of busses in Copenhagen as well.
The ads were so low effort, I've never seen anything like it. They looked almost like they were made in MS Paint, and then they seemed to have used Google Translate to translate the phrase "Missed Bitcoin? Buy Floki". They used the wrong Danish word for "miss" meaning "I missed my mom" rather than the one meaning "I missed the bus". The ad still kind of worked, but it definitely would have made more sense if they'd used the intended word.
Looking at the video this guy paid $30k for (https://www.youtube.com/watch?v=fc7ugkT2N9E), it got 40,000 views. Assuming these numbers are completely legit - hard when you are literally hiring a scammer -, the person pumping the shitcoin paid almost 1 USD per viewer. I wonder what the ROI for this was.
$30k to promote the video and they can't record an audio track that doesn't clip? I opened this for two seconds and it sounds like nails on a chalkboard.
I wonder if it's kind of like "Nigerian prince" scammers who intentionally use bad English in their emails. The idea is the class of people who are impervious to their scams are filtered out by these typos. By filtering people at the start of the scam "pipeline", it saves the scammer time.
Maybe the bad audio is here is serving as a sort of filter as well.
Plus you're targeting people who are not polished and accomplished themselves with the pitch that they can make money at a rate that very few other people are achieving. If the video looks polished and professional it'll be easier for them to realize that they're the mark, they're the ones getting scammed. A poorly produced but heavily promoted video primes them to think that someone like them can make a huge score doing something that conventionally successful and savvy people are overlooking.
There's also the very real fact that most of those scammers can barely speak English, so they don't really have any other option. Even if they source a well written starting email, the facade will fall apart immediately once they have to write something by themselves.
reading through reply tweets of pro-crypto ppl, it's amazing how some parts of the "crypto community" view shameless grifting and scams as a valid hustle for money
I think integrity in business has been steadily devalued by various crises and scandals (Enron, 2008, Worldcom) to the point that it sometimes seems quaint to even expect it anymore. Something similar seems to have happened with sponsored content - both influencers and celebrities have few qualms about using their name to sell the most questionable shit. Maybe it was always like this, but I don't recall there being so many celebrity ads when I was a teenager.
This, so much. There are a few Youtube channels I used to follow, that over time degraded into shameless shilling for completely irrelevant (to the channel) crap, and sometimes outright infomercials. I've tried engaging with the channel owners on this, and they literally don't understand what you're talking about.
These people started out passionately showing stuff they do in their garage, and now don't understand the concept of NOT doing everything 100% for the money. Shilling, scamming, it's all the new normal to these people.
More likely they now face a choice between shilling for shady VPN companies while doing fun stuff in their garage or doing less fun stuff in their garage while they work a real job to support it. Easy choice, IMO.
You were probably a teenager during Youtube’s (and every other online video service’s) extensive loss-leading period where they didn’t show ads. It’s a standard practice for VC viral growth. It really was a golden age for online video.
that kind of describes a lot of startup ethos as well though. buying "users" to pad the numbers before fund raising, click farms, etc. crypto just seems to be the darling of "okay to shit all over" because, well, it's crypto.
In the UK the incumbent government ministers scammed taxpayers with what is effectively almost a fake invoice scam for PPE to the tune of £8.7Billion (that's the amount written off with a wave of the hand and 'these are not the scammers you're looking for').
That's our lead.
No unconnected person is going to ever reach that level of financial immorality and the supreme legislator says "this is fine".
USA'a Trump is a massive grifter, also countenanced by the legislature.
Why would you be moral if the most politically powerful and financial successful people are modelling success through immorality.
This story is BS, its an 100% pump for 15 minutes in both graphs for what seems to be a tiny amount of money. His friend probably spent way more for those billboards. This is much easier to do with sending a message to one of those discord "pump groups". Go to any altcoin in binance that has some, but not a lot of daily volume, and you will see the same patterns multiple times a day
There is no way you'd be able to cash out $1.3M if most of the liquidity is simply not there, the price would crater immediately. You'd have to sell to yourself.
Honest question, do you think there is zero value to stablecoins? There's obviously huge demand for dollar assets in middle income countries without easy access to dollarized banking. In countries like Turkey or Argentina or Nigeria, stablecoins have achieved widespread adoption because they're far safer form of savings than inflationary local currency. It's hard for me to imagine how that's zero-sum.
Due to the subjectivity of this statement, there is little-to-no area for debate.
It is of my belief that the limits of programmable money should be probed, tested, & examined: Currently, the traditional banking infrastructure does not allow for such automation, and the attempts to do so are unfortunately dependent on banks that have the ability to censor transactions if coerced to do so, whether via national security concerns, politics, mob rule, etc.
This is especially concerning to me as there's a non-zero chance that my government will block my financial transactions simply because of my beliefs & lifestyle (G in anti-LGBTQ+ country). This consequently leads to the next sentence:
> All of the place you listed need better governance more than anything else.
That statement is predicated upon the following axioms:
1) There is a person / a group of people close enough to the governance tools that can both (a) enact the necessary changes & (b) defend said tools from manipulation/corruption
2) That the "change-enactors" can competently use said tools without adverse effects
3) (potential subset of 1(b)) That said enactors will not use said tools on scapegoats/critics/political targets
4) (potential subset of 1(b)) The enactors can be trusted to use said tools
5) There's a system in place to combat misuse of said tools, & that can be deployed in a timely manner
6) (potential subset of 1(b)) The enactors will not use said tools on said misuse combat system
7) The punishment for governance tool misuse is sufficient enough to act as a detractor for such actions
8) That said misuse combat system will not in itself be misused (The "Who Watches the Watchmen?" problem)
Assuming that all of the axioms can be fulfilled, I have no qualms or objections to your statement: Such a system in place will no doubt be more efficient & effective. It should be noted however that the hidden cost (centralization of control/power) will be a vector for abuse, & will attract those that want said power/control. In addition, due to the pigeonhole principle and the significant & non-zero probability of negative actors, in most scenarios the outlined axioms will not be completely fulfilled, with the tools of governance being used as outlined in (3).
Arguing that things that have never worked before will continue to not work, barring obvious violations of the laws of physics, has a pretty poor history.
A global stablecoin is one area where decentralization might make a significant difference in utility.
It has a terrific history - you must be not counting all the stuff that fails for previously known reasons that people try again. Sure, if you only cherry pick post hoc examples of things that eventually worked, then you can claim a poor history. But the correct evaluation is to pick all things being tried right now by any person on the planet, and measure how many were new and worked for the first time.
You know what does have a poor history? People claiming something will work because they once saw some unrelated thing work and assuming that means all things will work, no matter what the previous evidence.
>barring obvious violations of the laws of physics
Why limit yourself to physics? Those are not the only laws that govern how societal structures work. Also is it possible that the reason some dreams in economics fail because they eventually hit physics? The same works for crypto.
Santa isn't real. Unicorns don't live in the chimney. There is no free energy, despite probably 10s to 100s of thousands of people and inventions that said there were. All those people that found counterexamples to Fermat's Last Theorem were wrong. The list of medical things tried well after they were known to be wrong is astounding, and none of those things will likely ever, ever work. I could go on and on. It's far easier to make up stuff that will not work than to make up stuff that possibly could work or definitely works.
So no, most things that currently don't work will never work, which is how we acquired the knowledge we have - we ruled out dumb and stupid things.
There is a tiny, tiny sliver on the edge that is undecided, and that is where almost all new things and inventions come from. The vast landscape of settled knowledge will stay that way.
So, as to stablecoins, and mostly crypto in general - this is what happens when programmers generally wildly ignorant of the reasons for how modern finance work try to make modern finance. Since they're mostly ignorant of why the system has evolved to where it is over millennia of knowledge, they're simply trying to reinvent all that stuff one destroyed speculator at a time.
The current stable coins imploded as nearly anyone with much knowledge about econ would have guessed. I didn't follow them closely, but one night a friend carefully explained all the processes behind (I think it was) Luna. At one point I told him that the pieces he explained form a dynamic equilibrium instead of a static equilibrium, which means a little perturbation and the whole things goes off the rails. He remarked that my insight, after hearing the details for the first time, was exactly what did happen.
It's funny watching crypto slowly try to reinvent every financial item that failed and do exactly the same things that caused previous things to fail. Stable coins are not new, after all.
It baffles me that people keep trying to do things that are simply dumb, either out of hubris, greed, or ignorance.
Good luck on whatever stable coins you expect to happen. If they keep it up long enough they might eventually invent financial derivatives, but I expect that to be when the world has already moved past those and found yet better products.
Congratulations on your discovery of dynamical systems.
You describe the very scenario where stablecoins come into being, but you are too perfectly rational to engage in that creative behavior. That’s fine.
You admit others probably will but decide it will be a failure at the point where it works because someone else will have somehow bypassed this whole process.
All claimed pegged value items are spotless until they fail. USDC is exactly the same as every non-fiat currency, all claimed back by commodity X, all have failed once economies got tough.
USDC does nothing, zero, nada, that literally hundreds of places tried over the past 200 years.
It will fail, for the same reasons.
That they haven't imploded over 4 years with tiny usage is not special.
It is fascinating how they've changed their claims over time, and are no where near transparent on what backs them at the moment. Good luck with yet another repeat of bad ideas.
DAI has not even stayed pegged to the dollar over it's few year lifetime. I don't know how you call that spotless.
It requires suspended disbelief to claim these things.
It’s worse than a zero sum game; unless the utility gained outweighs the value of all the energy spent on mining (which it clearly doesn’t) then it’s actually a negative sum game.
I'm not a fan of and don't own any crypto, but in fairness Matt Levine points out that joint stock companies were mostly scams for ~a century and ended up changing the world. Just because something doesn't reveal its value for even 100+ years doesn't mean it doesn't actually have value. That said you might be dead before it materializes.
I don't really get your reaction here. The obvious takeaway from that point is a) determining the impact of any given technology is difficult and may take decades to centuries, and b) you should be aware that even IF your assessment of the technology is correct in the long term, you could still lose all of your money by investing in it. It's in no way an endorsement of investing in crypto, and I don't think he's responsible for every conman who will selectively quote him to shill a product.
Oh I agree, and yet it seems that an astonishingly small portion of crypto transactions are actually decentralized, or as currency. Until that changes, every conversation I have on the matter seems to end with "no bro, you'll see."
The idea was that it would be immune to nation states playing fiscal games, but the digital currencies seem to be following the stock markets behavior more closely than things like gold, which seems to imply that isn't the case?
Anonymous currencies for purchasing things that are illegal in the jurisdiction of the seller and/or buyer certainly have a value, but more as a service than a currency, so I wouldn't expect to make money sitting on coins. Instead I'd expect the payoff to be for buying them from the illegal sellers to sell to the illegal buyers. Essentially, being a launderer with possibly lower risk and less effort than in the past.
I'm not sure that enabling illegal things is a positive value though. Sure, there might be some things that are banned for dumb reasons (cannabis comes to mind), but if you enable any and all commerce, you end up also enabling stuff like assassinations and child abuse.
Imo a currency that makes those possible has negative value.
Regarding the "fiscal games" by nation states part - in democratic societies those "games" are policy decisions, voted for by the people. I find trying to circumvent the will of the people as expressed in a democratic vote morally questionable, and think that enabling antidemocratic behavior, too, is negative value. (Not to mention that it doesn't work anyways, as you noted).
>Imo a currency that makes those possible has negative value.
'Regular' currency has been used for all sorts of nefarious things since the dawn of currency, including assassinations and child trafficking and such. Nothing about USD/EUR/CAD/etc. inherently makes it impossible to purchase or participate in illegal goods/activities.
I'm not in favor of cryptocurrency, but the argument that cryptocurrency is the thing enables bad things to be bought/sold is a really tired argument and seems to forget all of human history prior to the last 10 years.
If this were true then cryptocurrency would not replace regular currency for drugs, assassinations, and dark market activities generally.
I believe KYC, banking regulations, and traceability all reduce the utility of conventional money for bad things. You can't easily transfer large amounts of money without leaving a trail that investigators may find in the conventional system. Bitcoin solves this!
I was talking about economic or market value, not societal or moral value. While I agree that that enabling child abuse or trafficking in people is a societal negative value, that sadly does not mean there isn't a positive market value for doing so.
When you live in a nation whose bank's decisions don't influence the world economy, you don't get a vote when those nations decide to raise or lower interest rates, or to suppress the value of their currencies, or have trade wars with each other. The idea of insulating yourself from those decisions that you did not vote on is attractive, but it now seems like more traditional assets are likely a better approach.
You can use ordinary USD (or any other fiat currencies) to "enable" stuff like assassinations and child abuse. All anonymous cash allows that to happen. That's why there are regulations and reporting of large cash transactions.
There's nothing special about cryptocurrency there, except that regulators have not regulated KYC/AML enough yet.
There's very little "value" in cryptocurrency, there is some value in the concept of blockchains, with proof-of-stake, replacing titles offices and other regulatory registers. NFTs are essentially that, but don't have any legal or regulatory power behind enforcing the "ownership" that the NFT records.
That decentralized digital currencies provide no value is the extraordinary claim. It's a statement that is obviously false to anyone who's been following mainstream news in the past years.
Darknet markets exist, are not a big secret, and are largely enabled by cryptocurrencies. This stuff has been in mainstream press since 2013.
> Darknet markets exist, are not a big secret, and are largely enabled by cryptocurrencies.
Ask people if they think a market for criminals to exchange illegal goods and services provides positive value and you'll find that most don't think it does.
Just cause there's money to be made, doesn't mean value is created or otherwise robberies would be quite valuable too.
Given that there are voluntary buyers and sellers choosing to engage in these exchanges of real products, the suggestion that no value is created directly contradicts very basic economic theory.
I suppose that is true, but also very nitpicky. Let me rephrase: no net value is created.
If you win 50 bucks in a casino and spent 100 betting, I suppose you technically "won" 50 bucks, but in colloquial use of language it'd be more correct to say you lost 50 bucks.
In the case of darknet markets, value is created for all participants, otherwise the deals wouldn't happen. There's no coercion involved.
The externalities are debatable, but I think we can accept that drug trade in the onionland has less negative externalities than drug trade on the street.
The difference between a grift and a real coin seems to be kind of small. If you keep on developing and pushing the coin/project forever, it's not considered a grift.
"I don't shill btc and attack everything else including fiat so that my net worth goes to the moon, no sir, I do it for other, non-profit-seeking motives. Getting wildly rich will just be an unfortunate byproduct of me following my moral code and various philosophies I recently adopted."
This.
Some people don't seem to understand. Which could be explained by the lack of enforcement, not sure. How many of them have been prosecuted? Maybe only a few biggest players that didn't hide themselves
Pump and dumps of securities are illegal. I can only assume the SEC doesn't consider cryptocurrencies securities, or Elon Musk wouldn't have gotten away with his utterly blatant bitcoin pump and dump. He did it in public on twitter, using a pubicly listed company's money. Do what he did with a stock, and you're toast.
Another example of a crypto pump scam that I've been watching the last few months is luckyblock.com / LBLOCK.
These guys (finixio.com) have extracted upwards of 10M USD from the project, all the while making outlandish promises of riches to the "hodlers" but ultimately never making good on them.
Like the DOCK example it's all about high profile shill marketing.
Somehow I missed Crackle TV's 'Startup' (2016). I just finished the first season. The show so far has been spot in in illustrating the crypto world we live in today. I'm wondering if this show didn't help fuel the run up in crypto prices in 2017.
Really sad to see people on the other side of this being duped into buying into a pump and dump. I can't fathom how some people think making money like this won't come with karmic consequences. Money is life. Taking peoples money like this can't be good.
> there were no victims. Nobody lost anything, all the investors got to keep their DOCKs.
That so absurd, is it a parody I'm missing?
The scammer started with USD, bought DOCK cheap and sold high, and ended with more USD. Big winner.
The scamees started with USD, bought DOCK high and either kept their (now worthless) DOCK or sold it at a big loss. Unless one day DOCK does turn out to be the next BTC, they're huge losers here.
