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A couple years ago I had the privileged of getting to overhear an adjacent table where a scam cryptocurrency founder was pitching their ICO to an investor in a

• bduerst 7y ago
  >Honestly, I think being "tech savvy" is a liability. Someone who doesn't think they're tech savvy knows they don't know. It takes a certain level of expertise to talk yourself into something extremely dumb. What you just said, but in visual form: https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect#/media/File:Dunning-Kruger-Effect-en.png https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect#...
  • magic_beans 7y ago
    This case, where being "tech savvy" actually produces the ignorance, is actually the opposite of the Dunning Kruger effect.
• kirubakaran 7y ago
  > It takes a certain level of expertise to talk yourself into something extremely dumb. That's a brilliant line. I'm sure I'll be borrowing it :-)
• loganfrederick 7y ago
  Part of the "certain level of expertise to talk yourself into something extremely dumb" is because we've all heard the stories of genius ideas that were dismissed as crazy. And if someone considers themselves "smart", then they think they can identify those opportunities before the general population. This leads to both/either FOMO ("I don't want to be considered dumb because I didn't invest in X") or self-optimism/egotistical ("I'm smart because I found the Next Big Thing"). These two factors explain a lot of the cases where supposedly smart people talk themselves into stupid decisions. Or as another commenter posted, these people are not really "smart" or are smart but not "wise", because a wise person would recognize such situations and be on the other side of the stupidity mountain into enlightenment land.
• notahacker 7y ago
  > Honestly, I think being "tech savvy" is a liability. Someone who doesn't think they're tech savvy knows they don't know. It takes a certain level of expertise to talk yourself into something extremely dumb. They might not fall for this particular pitch deck (or the one I overheard), but there are scams for every skill level. And the more confident you are in your understanding, the larger the "investment" you will being willing to make. Blockchain's probably the prime example of that. Understand a potential real world use case and you can probably identify the extent to which mutability of records loses value, and pay someone to audit the code if the real problem is that centralisation is impractical and stakeholders can benefit from manipulating the records without having any incentive to modify the physical product. If your fundamental understanding of a business model convinces you the real business problem is mutability of records, you can hire someone skilled to evaluate whether the codebase is likely to fix that. More difficult if your starting point is that the code and team certainly deliver on promises and the only problem that needs due diligence is everything else about why people would ever use it. On the other hand, outside the VC world there are a lot of people in corporates who broadly understand use cases but don't have an in-depth knowledge of the tech whose job depends on saying yes to enough innovation initiatives
  • Bartweiss 7y ago
    > outside the VC world there are a lot of people in corporates who broadly understand use cases but don't have an in-depth knowledge of the tech whose job depends on saying yes to enough innovation initiatives Both inside and outside the VC world, I think. You make an extremely good point about use cases: you don't have to be an expert on the tech to avoid scams as long as you're an expert on the problem it's being used for. If you can say "but we have a trusted source and we want to fix mistakes in old records, wouldn't a database be better?", you're past 90% of blockchain puffery. But if you have to say "what if there's a trusted source?", you can still get snowed by talk about all the hypothetical ways that could fail to apply. If you're picking tech someone else will use, or investing in products you think the market will value, you can't rely on knowing the problem in detail. It's like the difference between a beta tester saying "can I buy this?" and saying "I'll bet tons of people will buy this". The first tells you what they think about the product, the second other just tells you what they think about other people.
• Bartweiss 7y ago
  I think at some level expertise does become a robust defense against scams; it's just that the level required is incredibly high. Scamming Cynthia Dwork or Wei Dai with a new cryptocurrency would presumably be a waste of effort, because they'd jump straight at that <jargon> bit and even a very good con artist wouldn't keep up. Likewise, top physicists, cryptographers, and mathematicians hear from a lot of cranks without ever getting taken in. (Or, I suppose, they're too embarrassed to admit it.) But most people aren't at that level of expertise, and no one is that good at everything. If you're an expert at one thing, you're bound to be merely informed on a bunch of topics at the periphery of that thing. And "tech savvy" more or less means "informed by not an expert", so I think you're exactly right - that, more than cluelessness, is where danger lies. As we gain knowledge, we rely more on our own expertise than on consensus wisdom. And that's often right for spotting bad ideas, but it doesn't work for spotting scams. If someone is trying to hide the flaws where your knowledge is lacking, learning twice as much gives you far less than twice the resilience. I definitely can't identify the next bit thing in gene therapy or concrete additives, so there's no point in even trying to pitch me. I'd turn down the real deal and not regret it later, because I have no chance of getting it right. But I first heard about Bitcoin in 2011, so it's not quite unimaginable that I'll get a shot at the next one also. And a "not quite unimaginable" shot at riches is pretty much what scammers live off of.
  • nullc 7y ago
    I think the only thing that might protect Cynthia Dwork or Wei Dai would be if they were wise enough to not believe they were immune to being scammed. Yes, the person I was talking about wouldn't be successful against a more sophisticated target. But there is no amount of technical sophistication that makes you immune against the right scam because even the most technically adept has finite time to consider things, and they're all still human. Your excellent point about "learning twice as much gives you far less than twice the resilience" means that essentially no one can be completely immune, once you factor in time. So I think only the wisdom to really appreciate your vulnerability is universally protective, even if you are an honest to god super-guru. Case in point, witness the fact that one of the early Bitcoin developers publicly endorsed and obvious fraudster claiming to have invented Bitcoin but who can't even get basically technical points about Bitcoin right, much less some new and unfamiliar system. In some alternative universe where that hadn't happened his name might have easily found its way onto your list. I agree with you that the kind of top flight technical background needed to shunt off even fairly unsophisticated scammers is very rare. > But I first heard about Bitcoin in 2011, so it's not quite unimaginable that I'll get a shot at the next one also. Indeed, but there you wouldn't have needed to expend much-- and not anything that could have directly made a scammer money. I've always thought it was weird to see people who in 2011 said Bitcoin was a scam and didn't mine any though they could have at little cost... years later turn around and dump their life savings into super sketchy premined altcoins. I think they learned the wrong lesson. Their skepticism wasn't a problem.