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Fraud fraud fraud. These are 99% pump and dump schemes.

by robk 9y ago

drcode 9y ago
This is true [1] but does this matter if even only 1% is incredibly innovative and world changing? I think a limited number of these will almost certainly be successful operations. That said, I do not plan to invest in anything beyond ETH (ethereum currency) because I have low confidence in most of these ICOs and it's hard to pick out the right ones. [1] It's true most of these are hare-brained schemes by people hopelessly over their heads, including a fair number that are scammy. However, given how little most of these promise (beyond saying something along the lines of "we're building X and if people use it there will be an automatic payout to coin holders") I think it's unfair and close-minded to just label them all "frauds" a priori- Something can't be a fraud if no one is lying- Terms like "pump and dump" and "scam" for some of these I think is fair though.
- throwaway2048 9y ago
  Yes, it does matter, nobody is going to trust the one honest guy when the 99 others are looking to rip you off for as much as they can carry. Distrust and inability to ascertain quality before purchase drives out all the honest players from the market. https://en.wikipedia.org/wiki/Market_for_lemons https://en.wikipedia.org/wiki/Market_for_lemons
  - Analemma_ 9y ago
    I don't know if the "market for lemons" argument applies when a market is purely fraudulent. In that case, normal dynamics do not apply and the key question is whether you can always find new suckers. I argued in another comment a few days ago that the answer is yes: https://news.ycombinator.com/item?id=14220491 https://news.ycombinator.com/item?id=14220491
  - kolinko 9y ago
    While I agree that 95% of ICOs are not so good, so are 95% of e-mails in my Inbox. With ICOs, there are quite a few ways to ascertain the quality - regular due diligence applies, even more so when there are so many eyes watching every proposal.
- nugget 9y ago
  I own ETH as well but let's be honest it's mostly about speculation at this point (see: the GNOSIS launch today). I'll be a lot more confident when I see a draft of a sustainable proof of stake system and a few major commercial partners. Crypto market cap in these proof of work systems fascinates me. ETH now has a $7b market cap but it would take less than $100 million in hardware to control 51% of hashing power and effectively destroy the currency. (And to the extent you can lease cloud resources, probably much less.)
  - drcode 9y ago
    Well, what would happen with that type of attack is that ethereum would be "frozen" for 6 months or so until a "Proof of Stake" version of ethereum is ready, which would have more protections against this type of attack (because of "Auditable Byzantine Fault Tolerance") I agree the attack would still be devastating at the moment, if someone has a spare $100 million lying around that they want to throw away.
- s_kilk 9y ago
  > but does this matter if even only 1% is incredibly innovative and world changing? Like a one-in-a-million totally legit and revolutionary pyramid scheme?
SippinLean 9y ago
I treat them like penny stocks. 99% of the "shitcoins" whose ICOs I bought into were complete scams/failures. The other two were Ethereum and Dash :)

Fraud fraud fraud. These are 99% pump and dump schemes.

by robk 9y ago

Fraud fraud fraud. These are 99% pump and dump schemes.

This is true [1] but does this matter if even only 1% is incredibly innovative and world changing? I think a limited number of these will almost certainly be successful operations. That said, I do not plan to invest in anything beyond ETH (ethereum currency) because I have low confidence in most of these ICOs and it's hard to pick out the right ones. [1] It's true most of these are hare-brained schemes by people hopelessly over their heads, including a fair number that are scammy. However, given how little most of these promise (beyond saying something along the lines of "we're building X and if people use it there will be an automatic payout to coin holders") I think it's unfair and close-minded to just label them all "frauds" a priori- Something can't be a fraud if no one is lying- Terms like "pump and dump" and "scam" for some of these I think is fair though.

throwaway2048 9y ago
Yes, it does matter, nobody is going to trust the one honest guy when the 99 others are looking to rip you off for as much as they can carry. Distrust and inability to ascertain quality before purchase drives out all the honest players from the market. https://en.wikipedia.org/wiki/Market_for_lemons https://en.wikipedia.org/wiki/Market_for_lemons
- Analemma_ 9y ago
  I don't know if the "market for lemons" argument applies when a market is purely fraudulent. In that case, normal dynamics do not apply and the key question is whether you can always find new suckers. I argued in another comment a few days ago that the answer is yes: https://news.ycombinator.com/item?id=14220491 https://news.ycombinator.com/item?id=14220491
- kolinko 9y ago
  While I agree that 95% of ICOs are not so good, so are 95% of e-mails in my Inbox. With ICOs, there are quite a few ways to ascertain the quality - regular due diligence applies, even more so when there are so many eyes watching every proposal.
nugget 9y ago
I own ETH as well but let's be honest it's mostly about speculation at this point (see: the GNOSIS launch today). I'll be a lot more confident when I see a draft of a sustainable proof of stake system and a few major commercial partners. Crypto market cap in these proof of work systems fascinates me. ETH now has a $7b market cap but it would take less than $100 million in hardware to control 51% of hashing power and effectively destroy the currency. (And to the extent you can lease cloud resources, probably much less.)
- drcode 9y ago
  Well, what would happen with that type of attack is that ethereum would be "frozen" for 6 months or so until a "Proof of Stake" version of ethereum is ready, which would have more protections against this type of attack (because of "Auditable Byzantine Fault Tolerance") I agree the attack would still be devastating at the moment, if someone has a spare $100 million lying around that they want to throw away.
s_kilk 9y ago
> but does this matter if even only 1% is incredibly innovative and world changing? Like a one-in-a-million totally legit and revolutionary pyramid scheme?

SippinLean 9y ago

I treat them like penny stocks. 99% of the "shitcoins" whose ICOs I bought into were complete scams/failures. The other two were Ethereum and Dash :)