7 ms·

Torcoin: Crypto's latest scam

68 points by toinetoine 9y ago

al2o3cr 9y ago
The cryptocoin motto: "From each according to his gullibility, to each according to his greed"
- geogra4 9y ago
  man, whoever is left holding the bag on these is going to be seriously screwed after the tulips run their course
  - davidgerard 9y ago
    Every one of them thinks "man, so close, next time for sure"
- coldtea 9y ago
  If only the second part was true...
Taek 9y ago
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.
- Kinnard 9y ago
  Perhaps the author bought her(his?)self some Torcoin before publishing?
- bhaak 9y ago
  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. :-)
nickik 9y ago
Actually a better description of communism then the usual one.
- danbruc 9y ago
  I would say that does not describe communism at all. Gullibility and greed are two words that one would not usually associated with it, would you?
  - beaconstudios 9y ago
    > Gullibility 100 million dead, but it'll work this time!
    - deleted 9y ago
      [deleted]
      - deleted 9y ago
        [deleted]
    - ue_ 9y ago
      That's an interesting figure, where's that from? Not necessarily doubting you, but it's a huge number. It's not the first time I've seen this figure being posted. I don't consider it an argument against Communism or Socialism.
      - coldtea 9y ago
        It's the usual BS number that counts famines, civil wars, struggles for power etc as "Communism". Because of course, those things (like tons of bloody wars, civil war, famines, and other stuff, like 6 billion jews in ovens) don't happen under other regimes...
        beaconstudios 9y ago
        that's a bit of shifting the goal-posts, isn't it? Communism resulted in the deaths of ~100 million people due to famines from planned economy mismanagement, genocide, mass murder and so on but that's fine because Nazis were horrific murderers too? There's also a difference between civil war and genocide. Lenin and Stalin explicitly murdered millions of their own people via execution or gulags.
timdorr 9y ago
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
brilliantcode 9y ago
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 9y ago
  Just out of curiosity, why are you singling out Poloniex? AFAIK there are exchanges with way more alt coins.
lisper 9y ago
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.
- zanny 9y ago
  Except BTC has been "teetering" on the "brink" for 3+ years on the block size issue. When everyone's value is in the consensus, nobody is going to break it, no matter how much they complain about it. You can't rock the boat too much or you lose all your money. That also means bitcoin is never going to get better, so it is pretty much destined to always be cryptogold. Which isn't even a bad thing, it just isn't competing to be a real money. But it has never been valued for any potential monetary use - it has always been valued as cryptogold.
- jstanley 9y ago
  > 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 9y ago
    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.
Analemma_ 9y ago
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.
- pc86 9y ago
  I take issue with your third point. Libertarianism does not in any way mean you won't avail yourself of law enforcement if you've been the victim of a crime. I'm not a cryptocurrency guy, but what exactly about them would someone involve law enforcement for?
  - geofft 9y ago
    Law enforcement is funded by taxation, which is theft. If you avail yourself of law enforcement, you are benefiting yourself from the proceeds of crime for personal gain.
    - Bartweiss 9y ago
      That's an anarcho-capitalist stance, sure. But very few programmers are an-caps, compared to the number of libertarians. Most libertarians (and minarchists, and a lot of others) specifically accept basic law enforcement as a reasonable role of government. The whole "night watchman state" idea centers around defense, policing, and courts as legitimate government powers. (Also, this is backwards even to an-caps. The taxation was theft, but availing yourself of services purchased is reasonable compensation since no one else is permitted to sell legal services.)
Sami_Lehtinen 9y ago
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/
- martinko 9y ago
  Are you kidding me?
- sireat 9y ago
  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.
chatmasta 9y ago
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-abs http://dedis.cs.yale.edu/dissent/papers/hotpets14-torpath-ab...

68 points by toinetoine 9y ago

al2o3cr 9y ago

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

geogra4 9y ago
man, whoever is left holding the bag on these is going to be seriously screwed after the tulips run their course
- davidgerard 9y ago
  Every one of them thinks "man, so close, next time for sure"
coldtea 9y ago
If only the second part was true...

Taek 9y ago

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.

Kinnard 9y ago
Perhaps the author bought her(his?)self some Torcoin before publishing?
bhaak 9y ago
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. :-)

nickik 9y ago

Actually a better description of communism then the usual one.

danbruc 9y ago
I would say that does not describe communism at all. Gullibility and greed are two words that one would not usually associated with it, would you?
- beaconstudios 9y ago
  > Gullibility 100 million dead, but it'll work this time!
  - deleted 9y ago
    [deleted]
    - deleted 9y ago
      [deleted]
  - ue_ 9y ago
    That's an interesting figure, where's that from? Not necessarily doubting you, but it's a huge number. It's not the first time I've seen this figure being posted. I don't consider it an argument against Communism or Socialism.
    - coldtea 9y ago
      It's the usual BS number that counts famines, civil wars, struggles for power etc as "Communism". Because of course, those things (like tons of bloody wars, civil war, famines, and other stuff, like 6 billion jews in ovens) don't happen under other regimes...
      - beaconstudios 9y ago
        that's a bit of shifting the goal-posts, isn't it? Communism resulted in the deaths of ~100 million people due to famines from planned economy mismanagement, genocide, mass murder and so on but that's fine because Nazis were horrific murderers too? There's also a difference between civil war and genocide. Lenin and Stalin explicitly murdered millions of their own people via execution or gulags.

timdorr 9y ago

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

brilliantcode 9y ago

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 9y ago
Just out of curiosity, why are you singling out Poloniex? AFAIK there are exchanges with way more alt coins.

lisper 9y ago

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.

zanny 9y ago
Except BTC has been "teetering" on the "brink" for 3+ years on the block size issue. When everyone's value is in the consensus, nobody is going to break it, no matter how much they complain about it. You can't rock the boat too much or you lose all your money. That also means bitcoin is never going to get better, so it is pretty much destined to always be cryptogold. Which isn't even a bad thing, it just isn't competing to be a real money. But it has never been valued for any potential monetary use - it has always been valued as cryptogold.
jstanley 9y ago
> 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 9y ago
  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.

Analemma_ 9y ago

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.

pc86 9y ago
I take issue with your third point. Libertarianism does not in any way mean you won't avail yourself of law enforcement if you've been the victim of a crime. I'm not a cryptocurrency guy, but what exactly about them would someone involve law enforcement for?
- geofft 9y ago
  Law enforcement is funded by taxation, which is theft. If you avail yourself of law enforcement, you are benefiting yourself from the proceeds of crime for personal gain.
  - Bartweiss 9y ago
    That's an anarcho-capitalist stance, sure. But very few programmers are an-caps, compared to the number of libertarians. Most libertarians (and minarchists, and a lot of others) specifically accept basic law enforcement as a reasonable role of government. The whole "night watchman state" idea centers around defense, policing, and courts as legitimate government powers. (Also, this is backwards even to an-caps. The taxation was theft, but availing yourself of services purchased is reasonable compensation since no one else is permitted to sell legal services.)

Sami_Lehtinen 9y ago

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/

martinko 9y ago
Are you kidding me?
sireat 9y ago
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.

chatmasta 9y ago

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-abs http://dedis.cs.yale.edu/dissent/papers/hotpets14-torpath-ab...