4 ms·

You're perfectly describing the sunk cost fallacy. The naifs who overcomitted on a "guaranteed win" investment can't walk back from it because that would mean g

by hnbad 4y ago

You're perfectly describing the sunk cost fallacy. The naifs who overcomitted on a "guaranteed win" investment can't walk back from it because that would mean giving up on a lot (e.g. 50% or more) of their investments, which often as you said isn't money they really had "lying around" (even your retirement fund isn't really disposable once you actually need to retire on it). The failure to achieve the promised growth paradoxically converts them into true believers because they see no way out without admitting they ruined their lives. A lot of crypto grifters (and even mainstream celebrities) have been actively encouraging these people to sink literally all their capital in coins or NFTs with unrealistic promises and FOMO. They did this because they knew it would work and drive up prices enough for them to be able to cash out by dumping their worthless void money on the unwashed masses.

arinlen 4y ago
> You're perfectly describing the sunk cost fallacy. Sounds like a classical pump-and-dump scheme.
Spooky23 4y ago
I think the prevalence and scale of criminal activity through crypto was under appreciated in the mainstream. Let’s be real, much of the market activity is money laundering, ransomware and other payoffs, and Chinese people bypassing currency controls. It’s no coincidence that China cracked down on miners and the price dropped a few months ago. It’s plain as day now that with Russia being removed from the internet and most markets, buy-side demand for crypto is sinking.
- prox 4y ago
  It wasn’t so long ago we had some fans of crypto on HN, lots of stories how this or that scheme was going to work. First movers want to sound and convince others they are right and “now” is the right time to step in. Most of it can be debunked if you had a good economy course that tells you how value is created.
  - Spooky23 4y ago
    I think the early days were full of promise. Circa 2010-2015 crypto felt like Wired magazine in 1994 about the internet. Unfortunately, reality is a harsh mistress.
    - prox 4y ago
      Indeed. I also have no doubt some early adopters got real rich. But they were the top of the pyramid. The merry go round plays as long people keep joining. Looks like we hit some sort of limit at the bottom of the pyramid. Now they might find some new investors, but it will only delay the inevitable.

by hnbad 4y ago

arinlen 4y ago

> You're perfectly describing the sunk cost fallacy. Sounds like a classical pump-and-dump scheme.

Spooky23 4y ago

I think the prevalence and scale of criminal activity through crypto was under appreciated in the mainstream. Let’s be real, much of the market activity is money laundering, ransomware and other payoffs, and Chinese people bypassing currency controls. It’s no coincidence that China cracked down on miners and the price dropped a few months ago. It’s plain as day now that with Russia being removed from the internet and most markets, buy-side demand for crypto is sinking.

prox 4y ago
It wasn’t so long ago we had some fans of crypto on HN, lots of stories how this or that scheme was going to work. First movers want to sound and convince others they are right and “now” is the right time to step in. Most of it can be debunked if you had a good economy course that tells you how value is created.
- Spooky23 4y ago
  I think the early days were full of promise. Circa 2010-2015 crypto felt like Wired magazine in 1994 about the internet. Unfortunately, reality is a harsh mistress.
  - prox 4y ago
    Indeed. I also have no doubt some early adopters got real rich. But they were the top of the pyramid. The merry go round plays as long people keep joining. Looks like we hit some sort of limit at the bottom of the pyramid. Now they might find some new investors, but it will only delay the inevitable.