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As someone who is pro-crypto and has been working in the space for 5-6 years, I have never felt so embarrassed and disillusioned as the past few months. I wish

As someone who is pro-crypto and has been working in the space for 5-6 years, I have never felt so embarrassed and disillusioned as the past few months. I wish the market had stayed quiet and NFTs had never entered the mainstream. Now it's 99.9% scams and ponzi schemes. It's even worse than the ICO bubble and the whole thing will come crashing down again soon. You'd think people learn, but the get rich quick pitches are just too attractive to the average American who doesn't understand technology or finance.

imron 5y ago
> Now it's 99.9% scams and ponzi schemes Now?
- nomading 5y ago
  Yes, there was a period of time, mostly after the ICO crash, where the market was relatively quiet and most people in the space worked on interesting technological problems. I don't want to get into arguments about the usefulness of blockchains and web3, but the intention of developers was not to scam consumers, at least not explicitly or from the outset. Now the intention of most projects is explicitly to rug pull and scam people, mostly due to the NFT craze.
  - antocv 5y ago
    Just cycles repeating. Remember 2013 then it was all kinds of shitcoins when the term shitcoin was most used, happened. Peercoin, FeatherCoin, AmsterdamCoin, TitsAndAssCoin. They all pumped and dumped. Somebody looking into crypto late 2013 would have found 99% scam coins. Same thing in 2017, 99% scam ICOs. Today its 99% NFT and token scams.
  - beardyw 5y ago
    Just because you can create a new currency it doesn't mean it's a good idea. https://www.goodreads.com/quotes/685739-if-the-management-consultant-said-tersely-we-could-for-a https://www.goodreads.com/quotes/685739-if-the-management-co...
- moffkalast 5y ago
  To be clear though, any kind of investing into items with no practical value is fundamentally a ponzi scheme. For someone that buys low and sells high there's always someone that buys high. Be it on the stock market, forex, crypto exchanges or whatever the NFT scene is doing these days. How do you differentiate a crypto rugpull or a company going bankrupt after all the funding has been drained out by its owner? Or fiat devalued by inflation? In principle it's all different sides of the same coin, pun intended. So yeah, always has been.
  - FranksTV 5y ago
    1) Stocks in companies have value not just because people buy and sell them to each other at higher and higher prices, but because companies add value to the world, and generate income. 2) the difference between a crypto rug pull and a company being drained of its resources is that the second one would result in a police investigation, and fraud charges. It would be illegal, because of the laws that protect investors from exactly that situation. If "It's all the same" then why invest in crypto at all? It's way riskier, and had a lot more negative externalities.
    - moffkalast 5y ago
      1) That's debatable. Companies are after all just people doing stuff. You don't own the people and they could all just quit one day. Maybe you own a part of the company assets, but these days with remote work and internet companies that can be close to nothing. I don't see many stocks paying out dividends, but I suppose that's a thing. 2) Illegal's never stopped anyone from doing anything, and I don't see how the crypto version isn't fraud too. But in both these cases you can fly to a non extradition country with your newfound fuck-you-money, leaving the investors up shit creek without damages. Crypto has some benefits over the stock market, it's open 24/7 so it doesn't discriminate against anyone, and it's more volatile so one can get higher returns (well, or losses) with less of an investment without having to resort to options or margin which are just as risky. It also has more defined and predictable bull/bear markets in relation to bitcoin halvings. I don't really see the two markets as too different though. One has just had more time to become more rigged for wall street.
hwers 5y ago
Just have patience and don't sell your crypto just yet. Peoples moods are so temporary and forgetful there for sure will be another bubble within months again.
throw8932894 5y ago
NFT is not a bubble or scam, but money laundering scheme for tax evasion.
- Ekaros 5y ago
  I say it can be very well all three. Just the groups involved are different. It clearly is bubble with insane valuations for nothing on expectation of growth. It is scam, due to wash trading and all other fun stuff. And fundamental way of trying to sell something worthless with implication that it will go up in value with rest of the bubble. And yeah, point three is back to wash trading and laudering.
  - onlyrealcuzzo 5y ago
    There's a lot of evidence that the inflows to NFTs are extremely small, and that the VAST majority of NFT sales are wash trades. Why would anyone do this when the fees to trade are so high? Everyone thinks the end goal is to fake it until you make it, and sell the wash-traded pumped up tokens to an unsuspecting victim. It's not. The goal is to create fake wealth from nothing. There are banks now that will lend using NFTs as collateral. You get millions of dollars in loans, then you spend millions, then you go bankrupt. Oopsie.
- philwelch 5y ago
  Just like the art market.
- vmchale 5y ago
  Never seen people explain this one. Don't buy that it's better than other stuff.
  - cogman10 5y ago
    Step 1. Create an asset. Step 2. Create a wallet. Step 3. Put ill gotten gains in the wallet in step 2. Step 4. Purchase your own asset with money from step 3. Step 5. Cash out. Because there appears to be no reason behind the valuation of NFTs, it's pretty hard for the tax man to determine that "Oh hey, this doesn't look above board!". Because wallets are pretty easy to create and fund from all over the place, it makes the perfect mode to turn anonymous money into real money. Oh, and bonus points, you still have the NFT, so see if you can't unload it on a rube for less money.
miracle2k 5y ago
You mean, you didn't feel embarrassed in 2020 when people were all trying to find the next "food coin" advertising 10,000% APY to ape into? Because no matter how many times misinformed critics call NFTs a "scam": there is something inherently honest about them: pay money, get a collectible. There are no financial instruments here that can be misunderstood.
- madeofpalk 5y ago
  > there is something inherently honest about them: pay money, get a collectible. There are no financial instruments here that can be misunderstood. What is "a collectible"? There's what all the grifters say they are/can be. That's where the dishonesty comes in. All scams are technically fundamentally honest - pay money, get rock - once you remove all the parts that are dishonest.
  - miracle2k 5y ago
    > What is "a collectible"? It's like a Bitcoin, but we say instead of saying it is digital gold, it represents a picture of a monkey instead.
- kibwen 5y ago
  > Because no matter how many times misinformed critics call NFTs a "scam": there is something inherently honest about them: pay money, get a collectible. There are no financial instruments here that can be misunderstood. It can absolutely still be a scam. Wash trading is trivially employed to inflate the price of the "bid money" step, fraudulently suggesting the existence of demand when there is none.
  - miracle2k 5y ago
    I have yet to see any evidence that someone successfully wash traded their NFT project to success, but lots of people claiming that it is common place. It's much easier to pay off some influencers.
creshal 5y ago
> You'd think people learn The ones who did are no longer in crypto.
dale_glass 5y ago
Just the past few months? NFTs are just an extension to what happened to bitcoin years ago, when it failed to scale but nobody in charge cared. The main interest in cryptocurrency is not in "A Peer-to-Peer Electronic Cash System", but in a global game of greater fool. Lack of scaling isn't important, because the people in control are perfectly happy with paying once to buy in, then selling once to cash out. If your expectation is that you'll make extremely infrequent transactions worth in the tens of thousands of USD, that you had to pay $50 to get it processed reasonably quickly is a rounding error. Overall it'd been interesting to see how the supposed decentralized system didn't really last. Things got centralized anyway in that there's a very small team that develops the software and a small amount of groups that form an unelected governance systems, and the small contributors to the network effectively don't matter.
jillesvangurp 5y ago
I compare it to the dot com bubble. This is simply what happens when you introduce large amounts of stupid money to a very immature sector. The average American doesn't exist. But of course a lot of amateur investors with dollar signs that lost their money 20 years ago, are the same kind of gullible fools lining up for a repeat of that. So, I'm happy it is happening and it can't happen fast enough for me. In fact, it's long overdue. Back in the day, if you even hinted at "we might get a domain name and a website", you'd be getting funding. People were dumping millions in some pretty moronic and misguided notions. A lot of those companies failed for quite obvious reasons. But not without making several people very rich. Investors have a way with money where they manage to not lose when things go bad and win a lot when that fails to happen. That's one of the perks of playing with other people's money. Worst case you just take your cut and then you wash your hands of the whole thing. Best case it was all you and your genius insights. Sometimes stupid money is tempting for smart investors. When it's on offer, there will be people taking it. And of course few companies actually had some good ideas and got a little more funding than they would have otherwise gotten and used that to become amazingly successful. Amazon, Google, Ebay, and a few others survived the bursting of the bubble and survived and thrived. The same is happening with crypto and blockchain companies. Most of them are obviously empty shells run by charlatans operating out of dodgy jurisdictions. But those are actually pretty easy to spot. If it looks dodgy, it more than likely is super dodgy. If it looks to good to be true, it probably is. So, people losing their money are mostly just fools. The exact same kind of fools that lost their money 20 years ago. When some of those fools are institutional investors betting with your pension money, you'd be right to be a bit concerned about that though. That too happened 20 years ago. More interesting is to look for the things that just aren't that dodgy at a first glance. Some of these companies are looking pretty serious actually. Solid investors, actual customers, working products, etc. It's not all scams and pyramid schemes and those might be the possible survivors of the crypto bubble bursting. Some of the tech is actually quite impressive and looks like it might be used to solve some real problems. There are probably more than few very good tech companies just putting their heads down and getting some real work done right now. Those are the interesting ones to follow.
- piva00 5y ago
  > So, people losing their money are mostly just fools. The exact same kind of fools that lost their money 20 years ago. When some of those fools are institutional investors betting with your pension money, you'd be right to be a bit concerned about that though. Why can't I be concerned about the thousands and thousands of fools that are losing money they can't afford? Yes, they are fools but are they deserving to suffer for being fools and getting carried away by con-men? I know some poor, desperate people in Brazil who got caught in cryptocurrencies and NFTs out of desperation, they are fools but I believe they do deserve empathy when their families go hungry because of a predator with confidence was able to scam them. Not feeling concerned that thousands of individuals like that exist and are being tricked is a bit concerning for me...
pjc50 5y ago
> but the get rich quick pitches are just too attractive to the average American who doesn't understand technology or finance. This is the real reason there's such a backlash; it doesn't actually matter what the underlying merits or otherwise are, the ubiquitous sales tactics, cultishness, and arrogance of the advocates have enraged people. I'm reminded of Russ Alberry's epic rant from 24 years ago about spam destroying one of the original internet decentralized communities, USENET: https://www.eyrie.org/~eagle/writing/rant.html https://www.eyrie.org/~eagle/writing/rant.html
bsenftner 5y ago
The fundamental issue is a complete lack of any financial literacy education in the United States. The average person has zero to negative logic running in their heads how finance and the financial world operate. So, of course, every manner of magic fairy dust logic is a possible explanation given the black hole void most people have when it comes to how financial logic operates.

imron 5y ago

> Now it's 99.9% scams and ponzi schemes Now?

nomading 5y ago
Yes, there was a period of time, mostly after the ICO crash, where the market was relatively quiet and most people in the space worked on interesting technological problems. I don't want to get into arguments about the usefulness of blockchains and web3, but the intention of developers was not to scam consumers, at least not explicitly or from the outset. Now the intention of most projects is explicitly to rug pull and scam people, mostly due to the NFT craze.
- antocv 5y ago
  Just cycles repeating. Remember 2013 then it was all kinds of shitcoins when the term shitcoin was most used, happened. Peercoin, FeatherCoin, AmsterdamCoin, TitsAndAssCoin. They all pumped and dumped. Somebody looking into crypto late 2013 would have found 99% scam coins. Same thing in 2017, 99% scam ICOs. Today its 99% NFT and token scams.
- beardyw 5y ago
  Just because you can create a new currency it doesn't mean it's a good idea. https://www.goodreads.com/quotes/685739-if-the-management-consultant-said-tersely-we-could-for-a https://www.goodreads.com/quotes/685739-if-the-management-co...
moffkalast 5y ago
To be clear though, any kind of investing into items with no practical value is fundamentally a ponzi scheme. For someone that buys low and sells high there's always someone that buys high. Be it on the stock market, forex, crypto exchanges or whatever the NFT scene is doing these days. How do you differentiate a crypto rugpull or a company going bankrupt after all the funding has been drained out by its owner? Or fiat devalued by inflation? In principle it's all different sides of the same coin, pun intended. So yeah, always has been.
- FranksTV 5y ago
  1) Stocks in companies have value not just because people buy and sell them to each other at higher and higher prices, but because companies add value to the world, and generate income. 2) the difference between a crypto rug pull and a company being drained of its resources is that the second one would result in a police investigation, and fraud charges. It would be illegal, because of the laws that protect investors from exactly that situation. If "It's all the same" then why invest in crypto at all? It's way riskier, and had a lot more negative externalities.
  - moffkalast 5y ago
    1) That's debatable. Companies are after all just people doing stuff. You don't own the people and they could all just quit one day. Maybe you own a part of the company assets, but these days with remote work and internet companies that can be close to nothing. I don't see many stocks paying out dividends, but I suppose that's a thing. 2) Illegal's never stopped anyone from doing anything, and I don't see how the crypto version isn't fraud too. But in both these cases you can fly to a non extradition country with your newfound fuck-you-money, leaving the investors up shit creek without damages. Crypto has some benefits over the stock market, it's open 24/7 so it doesn't discriminate against anyone, and it's more volatile so one can get higher returns (well, or losses) with less of an investment without having to resort to options or margin which are just as risky. It also has more defined and predictable bull/bear markets in relation to bitcoin halvings. I don't really see the two markets as too different though. One has just had more time to become more rigged for wall street.

hwers 5y ago

Just have patience and don't sell your crypto just yet. Peoples moods are so temporary and forgetful there for sure will be another bubble within months again.

throw8932894 5y ago

NFT is not a bubble or scam, but money laundering scheme for tax evasion.

Ekaros 5y ago
I say it can be very well all three. Just the groups involved are different. It clearly is bubble with insane valuations for nothing on expectation of growth. It is scam, due to wash trading and all other fun stuff. And fundamental way of trying to sell something worthless with implication that it will go up in value with rest of the bubble. And yeah, point three is back to wash trading and laudering.
- onlyrealcuzzo 5y ago
  There's a lot of evidence that the inflows to NFTs are extremely small, and that the VAST majority of NFT sales are wash trades. Why would anyone do this when the fees to trade are so high? Everyone thinks the end goal is to fake it until you make it, and sell the wash-traded pumped up tokens to an unsuspecting victim. It's not. The goal is to create fake wealth from nothing. There are banks now that will lend using NFTs as collateral. You get millions of dollars in loans, then you spend millions, then you go bankrupt. Oopsie.
philwelch 5y ago
Just like the art market.
vmchale 5y ago
Never seen people explain this one. Don't buy that it's better than other stuff.
- cogman10 5y ago
  Step 1. Create an asset. Step 2. Create a wallet. Step 3. Put ill gotten gains in the wallet in step 2. Step 4. Purchase your own asset with money from step 3. Step 5. Cash out. Because there appears to be no reason behind the valuation of NFTs, it's pretty hard for the tax man to determine that "Oh hey, this doesn't look above board!". Because wallets are pretty easy to create and fund from all over the place, it makes the perfect mode to turn anonymous money into real money. Oh, and bonus points, you still have the NFT, so see if you can't unload it on a rube for less money.

miracle2k 5y ago

You mean, you didn't feel embarrassed in 2020 when people were all trying to find the next "food coin" advertising 10,000% APY to ape into? Because no matter how many times misinformed critics call NFTs a "scam": there is something inherently honest about them: pay money, get a collectible. There are no financial instruments here that can be misunderstood.

madeofpalk 5y ago
> there is something inherently honest about them: pay money, get a collectible. There are no financial instruments here that can be misunderstood. What is "a collectible"? There's what all the grifters say they are/can be. That's where the dishonesty comes in. All scams are technically fundamentally honest - pay money, get rock - once you remove all the parts that are dishonest.
- miracle2k 5y ago
  > What is "a collectible"? It's like a Bitcoin, but we say instead of saying it is digital gold, it represents a picture of a monkey instead.
kibwen 5y ago
> Because no matter how many times misinformed critics call NFTs a "scam": there is something inherently honest about them: pay money, get a collectible. There are no financial instruments here that can be misunderstood. It can absolutely still be a scam. Wash trading is trivially employed to inflate the price of the "bid money" step, fraudulently suggesting the existence of demand when there is none.
- miracle2k 5y ago
  I have yet to see any evidence that someone successfully wash traded their NFT project to success, but lots of people claiming that it is common place. It's much easier to pay off some influencers.

creshal 5y ago

> You'd think people learn The ones who did are no longer in crypto.

dale_glass 5y ago

Just the past few months? NFTs are just an extension to what happened to bitcoin years ago, when it failed to scale but nobody in charge cared. The main interest in cryptocurrency is not in "A Peer-to-Peer Electronic Cash System", but in a global game of greater fool. Lack of scaling isn't important, because the people in control are perfectly happy with paying once to buy in, then selling once to cash out. If your expectation is that you'll make extremely infrequent transactions worth in the tens of thousands of USD, that you had to pay $50 to get it processed reasonably quickly is a rounding error. Overall it'd been interesting to see how the supposed decentralized system didn't really last. Things got centralized anyway in that there's a very small team that develops the software and a small amount of groups that form an unelected governance systems, and the small contributors to the network effectively don't matter.

jillesvangurp 5y ago

I compare it to the dot com bubble. This is simply what happens when you introduce large amounts of stupid money to a very immature sector. The average American doesn't exist. But of course a lot of amateur investors with dollar signs that lost their money 20 years ago, are the same kind of gullible fools lining up for a repeat of that. So, I'm happy it is happening and it can't happen fast enough for me. In fact, it's long overdue. Back in the day, if you even hinted at "we might get a domain name and a website", you'd be getting funding. People were dumping millions in some pretty moronic and misguided notions. A lot of those companies failed for quite obvious reasons. But not without making several people very rich. Investors have a way with money where they manage to not lose when things go bad and win a lot when that fails to happen. That's one of the perks of playing with other people's money. Worst case you just take your cut and then you wash your hands of the whole thing. Best case it was all you and your genius insights. Sometimes stupid money is tempting for smart investors. When it's on offer, there will be people taking it. And of course few companies actually had some good ideas and got a little more funding than they would have otherwise gotten and used that to become amazingly successful. Amazon, Google, Ebay, and a few others survived the bursting of the bubble and survived and thrived. The same is happening with crypto and blockchain companies. Most of them are obviously empty shells run by charlatans operating out of dodgy jurisdictions. But those are actually pretty easy to spot. If it looks dodgy, it more than likely is super dodgy. If it looks to good to be true, it probably is. So, people losing their money are mostly just fools. The exact same kind of fools that lost their money 20 years ago. When some of those fools are institutional investors betting with your pension money, you'd be right to be a bit concerned about that though. That too happened 20 years ago. More interesting is to look for the things that just aren't that dodgy at a first glance. Some of these companies are looking pretty serious actually. Solid investors, actual customers, working products, etc. It's not all scams and pyramid schemes and those might be the possible survivors of the crypto bubble bursting. Some of the tech is actually quite impressive and looks like it might be used to solve some real problems. There are probably more than few very good tech companies just putting their heads down and getting some real work done right now. Those are the interesting ones to follow.

piva00 5y ago
> So, people losing their money are mostly just fools. The exact same kind of fools that lost their money 20 years ago. When some of those fools are institutional investors betting with your pension money, you'd be right to be a bit concerned about that though. Why can't I be concerned about the thousands and thousands of fools that are losing money they can't afford? Yes, they are fools but are they deserving to suffer for being fools and getting carried away by con-men? I know some poor, desperate people in Brazil who got caught in cryptocurrencies and NFTs out of desperation, they are fools but I believe they do deserve empathy when their families go hungry because of a predator with confidence was able to scam them. Not feeling concerned that thousands of individuals like that exist and are being tricked is a bit concerning for me...

pjc50 5y ago

> but the get rich quick pitches are just too attractive to the average American who doesn't understand technology or finance. This is the real reason there's such a backlash; it doesn't actually matter what the underlying merits or otherwise are, the ubiquitous sales tactics, cultishness, and arrogance of the advocates have enraged people. I'm reminded of Russ Alberry's epic rant from 24 years ago about spam destroying one of the original internet decentralized communities, USENET: https://www.eyrie.org/~eagle/writing/rant.html https://www.eyrie.org/~eagle/writing/rant.html

bsenftner 5y ago

The fundamental issue is a complete lack of any financial literacy education in the United States. The average person has zero to negative logic running in their heads how finance and the financial world operate. So, of course, every manner of magic fairy dust logic is a possible explanation given the black hole void most people have when it comes to how financial logic operates.