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Reddit Users Lose Real Money After Meme Currency Bot Dies
- zkms 9y agoI knew about exit scams (https://en.wikipedia.org/wiki/Exit_scam https://en.wikipedia.org/wiki/Exit_scam) when it came to illicit sellers/marketplaces for drugs but I'd never thought that I'd ever see an exit scam for a tip bot for a meme cryptocurrency.
- VMG 9y agoSad, but predictable. There's a mantra in Bitcoin: if somebody else has the private key, you don't own your cryptocurrency.
- mnm2 9y agoAny bank could "just" spend your money on your account The central bank just prints money and thus steals 'value' from you (devaluation) It's a matter of trust into an entity
- pythonaut_16 9y agoBanks operate in a predictable, fairly transparent framework. Inflation devalues your money but the process of inflation is well understood and the occurrence/details are public knowledge. Cryptocurrencies values can fluctuate rapidly and there's a strong precedent for your money disappearing in an exchange or otherwise.
- hashkb 9y agoOk, sure. Even if banks can be slimy, they can't be nearly as slimy as anonymous internet folk working in unprecedented/unregulated legal areas. All trust is not equal.
- nv-vn 9y agoHe wasn't anonymous though...
- ubernostrum 9y agoA bank is subject to laws, and generally believes that it is subject to laws. Cryptocurrency people tend to believe that the stuff they're into makes laws and regulations obsolete, so who would bother writing up any of those?
- JustAnotherPat 9y agoShould be if a hard fork is possible, you don't own your crypto.
- hsod 9y agois a hard fork ever not possible?
- toomuchtodo 9y agoCryptocurrency: you never own your currency.
- rjtavares 9y agoI had some of those. I didn't really lose "real money".
- deleted 9y ago[deleted]
- jstanley 9y ago> his company is broke, he’s broke, and the bot is broke because he spent all the coins, after he himself ran out of money. (emphasis mine) How did he think this was remotely acceptable? Jesus Christ! Don't operate custodial accounts if you don't understand the consequences. You can not just spend other people's money, no matter how broke you are... If that's your only option, give everyone their money back and declare bankruptcy.
- pjc50 9y agoThis is cryptocurrency. Participants see being above the law as a feature.
- jstanley 9y agoYes but being above morals is decidedly not a feature. I'm into cryptocurrency too.
- obstinate 9y agoMorality is just an attempt to describe the actions our monkey brains view as acceptable and unacceptable. If you remove the monkey far enough from its natural habitat, far enough that the shape and magnitude of consequences are susbtantially altered, people feel more and more free to act in ways that are immoral. Cryptocurrencies CLEARLY are having that effect. People think they are above the law and consequences, largely because they are, and act accordingly.
- jasonmp85 9y agoWait I'm being serious here: how is that not a feature? People trade humans and hit jobs on the darknet. Do you really think "get rid of laws and people will do the right thing" is a reasonable assumption? You seem genuinely shocked at this outcome, but how many times has a story like this played out? Myself, I relish these stories.
- jstanley 9y ago
- gdulli 9y agoWhy does it always seem like "Lose real money" is the "E pluribus unum" of cryptocurrencies?
- mikeash 9y agoBecause "crypto" is Latin for "things will definitely go wrong" and "currency" is Latin for "real money."
- mdemare 9y agoCrypto is Greek, actually.
- mason240 9y agoAs if people don't lose real money everyday in bleeding edge investments. This is HackerNews, born from the tech startup/VC culture, right?
- tdb7893 9y agoThere's a difference between losing money on a bet (like VCs) and having it stolen from you (cryptocurrency).
- hanniabu 9y agoYou're acting like a founder never ran off with a VC's money and that there also aren't legit cryptos. This is the real world. Scummy people exist in all facets of life.
- tdb7893 9y agoThey exist everywhere but that hasn't stopped them from being especially prevalent in cryptocurrencies. The financial system is pretty sketchy in general but cryptocurrencies seem to have a large amount of scandals for having such a low volume of people actually using them.
- 9y ago
- MichaelGG 9y agoWhat'd he spend it on? Is this really hosting intensive? I'd think it'd fit in free tier usage or something. And even if not, it can't be more than what, a hundred or two a month? I don't follow what "creating a business" actually meant as far as why his costs went up. He was running a bot. So, you get an LLC, no big deal, it changes nothing. That's like what, 50$ in some states? What am I missing? Unless it comes out that he started hiring people (to do what??) or if he quit his job and started spending people's money for his rent -- why'd he suddenly incur any serious expenses? Also what's it got to do with crypto currencies per se? If banks offered some super easy API for USD-USD transfers and he had shoved all this money into a WellsFargo account would he somehow not have spent it?
- mcintyre1994 9y ago> According to Mohland, in 2015, all Wow Such Business employees were laid off, including himself, and he began pouring his personal funds into the service to keep the bot alive. It sounds like at some point, for some reason, he had employees. Unless he's just using weird wording and he was the only one.
- MichaelGG 9y agoHoly crap, it's true: https://dogetipbot.wordpress.com/2014/09/05/wow-such-businessdogetipbot-is-growing-let-me-introduce-you-to-our-amazing-new-employees-2/ https://dogetipbot.wordpress.com/2014/09/05/wow-such-busines... Him and a cofounder, a dev, community/customer support, and a new hire coming on to "go to the moon". I would love to know the thought process that came up with this. Edit: Ya they went to conventions and on and on. Built a v3 system that could do "<bold>40 transactions per second</bold>", supported Twitch and other stuff. And they raised money: "Hell, we even raised $445k in a seed round to keep this train moving well on into 2015." Well that makes a lot more sense. And I sympathize with wanting to keep your business alive. I've seen that happen and it sucks because it's hard to cut losses and walk away.
- xigency 9y agoDoes this mean he was running on wallet funds from the start? It doesn't sound like he had any investors or any revenue at all.
- look_lookatme 9y ago> In finance, customer funds are supposed to remain segregated from the business’s funds. They live in a separate legal universe, and this rule is meant to insulate the business and customer from each others’ failures. Can we get a source other than Gizmodo?
- pjc50 9y agohttps://www.handbook.fca.org.uk/handbook/CASS/7/13.html https://www.handbook.fca.org.uk/handbook/CASS/7/13.html Admittedly that's for serious investment rather than daft things like tipbots.
- whack 9y agoIt's worth pointing out that this fiasco has nothing to do with cryptocurrencies. In the absence of regulations and legal enforcement, the exact same thing can happen with any bank or brokerage account. "We went bankrupt due to subprime bets, so we're taking all of our customers' savings to bail ourselves out. Fight club, lol". Given that this was a legally registered business, I hope this scumbag faces criminal prosecution and imprisonment. It's time we started locking up white-collar-thieves the same way we lock up burglars.
- pjc50 9y ago> same thing can happen with any bank or brokerage account Not really, no. There's extensive regulatory systems in place to limit this and it only happens in dire circumstances (accounts over €100k in Cyprus, for example)
- MoOmer 9y ago> In the absence of regulations and legal enforcement,
- aaron-lebo 9y ago> In a world that doesn't exist,
- jharger 9y agoI thought that was called the "third world" these days.
- reverend_gonzo 9y agoActually, this happens all the time, even in highly regulated industries. https://en.wikipedia.org/wiki/MF_Global https://en.wikipedia.org/wiki/MF_Global https://www.sec.gov/news/press-release/2017-85 https://www.sec.gov/news/press-release/2017-85 http://www.chicagobusiness.com/realestate/20130718/CRED03/130719819/brokerages-bookkeeper-found-guilty-of-embezzling http://www.chicagobusiness.com/realestate/20130718/CRED03/13...
- dacox 9y agoWow, the author has a huge chip on their shoulder when it comes to cryptocurrency. Also, how is Gawker still in business?
- simonw 9y agoGawker was acquired by Univision last year.
- soared 9y agoCan someone explain how these coins went from zero value to having value? The articles kind of skips over that part, saying that getting listed on exchanges made it worth something. So simply being able to trade it for real money (+ hype, + limited supply) made it actually worth real money? The only thing that needs to happen for a currency to exist is liquidity and x number of people to think its valuable (who buy/sell it)?
- gnode 9y agoCryptocurrency acts as a transfer currency. If I want to send someone $1 worth of Dogecoin, I spend a dollar on the exchange, and whomever is willing to give me the most Dogecoin to get my dollar wins and sets the trading price. Of course, this is limited by how much Dogecoin people have that they are willing to sell. Mainly its psychology; what people expect to happen determines how they trade and thus what does happen. So you end up with a chaotic system and an unstable currency.
- GavinMcG 9y agoYes. Anything someone is willing to give you something for has value.
- udia 9y agoI think you just answered your own question. The only thing that needs to happen for a currency to exist is liquidity and people to think its valuable.
- pjc50 9y ago> The only thing that needs to happen for a currency to exist is liquidity and x number of people to think its valuable (who buy/sell it)? Yes? Of course, trading can vanish just as quickly as it came.
- alanfalcon 9y agoThis is the same way Bitcoin came to be worth $1800.
- r721 9y agoThe comments from reddit posts are worth reading: https://www.reddit.com/r/dogecoin/comments/69vycc/important_im_taking_dogetipbot_to_a_server_farm/ https://www.reddit.com/r/dogecoin/comments/69vycc/important_... https://www.reddit.com/r/dogecoin/comments/6a1eh0/options/ https://www.reddit.com/r/dogecoin/comments/6a1eh0/options/
- aaron-lebo 9y agoYikes. So, you stole everyone's money to support your personal business and then claimed bankruptcy once all of everyone's money was gone. Is that correct? Then you complain when some hacker takes the money from the ponzi type scheme your running and now the result of all of it is, everybody lost their money including you? Bravo Mo How do people like this exist?
- mynewtb 9y agoI always thought Moolah and Mohland shared a remarkable amount of characters.
- sarreph 9y agoReal shame. As an active community member, I can tell you that mohland was pretty much revered by the Doge members, because of how influential and prolific DogeTipbot was across the sub. People were tipping each other on a huge scale of engagement unseen anywhere else (by me, anyway). Then, it turns out not even our dev-mascot can be trusted... What a pity. It's also interesting to see some of the discussions around the creation of a decentralised tipbot... But it seems like this would not be possible[0], because the keys to the wallet(s) would always need to be in someone's hands (or a few people's anyway). [0] - https://www.reddit.com/r/dogecoin/comments/6acho0/a_decentralized_reddit_tipbot_is_not_possible/ https://www.reddit.com/r/dogecoin/comments/6acho0/a_decentra...
- deleted 9y ago[deleted]
- AdamSC1 9y agoI knew Mohland and the DogeTipbot project pretty well. He did have a few employees mostly working in customer support. He was a stand-up guy and a strong advocate for the Dogecoin community. People are talking about the fact that he liquidated the assets from user wallets as a malicious action, and while I agree it was a terrible choice, I see it more as a bad decision. Backed into a corner he tried to leverage a businesses asset holdings to keep it a float in time to recover. Depending on your jurisdiction this is something banks do all the time as part of your balance is not liquid and invested elsewhere. The issue here is his business didn't recover and wasn't ever going to. Last I heard Josh's plan was to keep the main part of the bot free and charge for websites and streamers to accept tips from the Dogecoin community. He wasn't an idiot like this article tries to portray. There was a reason he was keeping the consumer end of things free. But, the micropayment landscape had more competitive options than a niche currency. All in all its sad to see the business fail but this was poor business choices, not maliciousness nor stupidity like the article tries to claim.
- antisthenes 9y agoI think the bigger issue is that you're calling it a business. It's not a business, it was a hobby/bot/side project whatever you want to call it (I'm still not quite sure what it does and don't really want to delve so far into the depths of stupidity to understand it) and it never made any money. > He wasn't an idiot like this article tries to portray. He wasn't an idiot for making poor decisions. Everyone makes poor decisions. But he was an idiot for thinking this could ever be a business (and staking apparently his personal savings and credit cards on it). Let's not tip-toe around the issue. Calling someone an idiot isn't as big a deal as you think it is. We all had some wishful thoughts at one point or another. This is just a cautionary tale of a guy who spent too much money on a hobby.
- FussyZeus 9y ago> Backed into a corner he tried to leverage a businesses asset holdings to keep it a float in time to recover. Depending on your jurisdiction this is something banks do all the time as part of your balance is not liquid and invested elsewhere. Except banks are insured in case shit goes south and the depositors get their money back. This is why I don't touch the "coins" with a ten foot pole. Yes fiat currency is also made up nonsense, but it's made up nonsense backed by nations, not some guy in a trailer in Nevada.