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There has always been financial fraud, but the thing I find particularly gross here is the large scale participation of retail investors. That seems new to me,
by api 4y ago
There has always been financial fraud, but the thing I find particularly gross here is the large scale participation of retail investors. That seems new to me, at least since the days of wildcat banks.
It’s also an industry that seems to create virtually no value.
- vkou 4y agoMost of the retailers are in it to dump onto a bigger fool. This makes them both perpetrators of, and victims of fraud.
- api 4y agoSome are conscious of it but there are many people bowled over by either the supposed ideology or just a vague sense of it being a next big thing combined with FOMO.
- vkou 4y agoDepends on the instrument. Something like Luna was people chasing yield. Something like NFTs, I'm pretty sure all the nuts know and treat it like a pump and dump.
- Animats 4y ago> There has always been financial fraud, but the thing I find particularly gross here is the large scale participation of retail investors. Go back in financial history to the 1920s, and you'll see the same kinds of startup scams peddled to the public. Which is why most of them were criminalized in the US in the 1930s. There's not much originality in the financial fraud field. Most of the large-scale scams were developed in the 19th century [1]. You need some kind of mass medium to scam large numbers of people, so, while scams go back far further, scams at scale had to await the development of newspaper printing presses. If you know about Madoff, Enron, Milken, Amway, Florida real estate, Ponzi, the Mississippi Bubble, Tulip mania, and bucket shops, you can match most crypto schemes to one of those. This should be covered in schools. [1] https://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds https://en.wikipedia.org/wiki/Extraordinary_Popular_Delusion...
- deleted 4y ago[deleted]
- puranjay 4y agoI don’t disagree with you at all about the scammy nature of the industry at large. But the philosophical underpinnings of the crypto movement, especially the “hard money” idea at the heart of Bitcoin, feels very pertinent at a time when central banks have been doing exactly what the a Bitcoiners had been warning about: debauching money by printing it endlessly. You can consider crypto a scam and you’d be largely right. But its also true that the current financial system is wildly corrupt and increasingly serves only those at the top of the totem pole. Crypto might not be the answer but that doesn’t mean it doesn’t pose the right questions.
- api 4y agoBitcoin goes entirely too far in the opposite direction of fiat money. It’s hyperdeflationary, far more than gold. The extreme deflationary nature leads it to naturally manifest the structure of a Ponzi scheme. It is always guaranteed to be more profitable to just hold than invest or use, and the way you ensure it keeps going up is to go out and shill for more people to buy and hold. That’s not how you run an economy if you want to do anything useful. It’s a pyramid scheme that must eventually collapse when no more HODLers can be recruited. We do need a more transparent honest well run money system but this is not it.
- pcthrowaway 4y agoThe supply isn't deflationary, it's just very slowly inflationary, at a fixed (and decreasing) rate. Ethereum might actually be deflationary now though
- louloulou 4y ago> It is always guaranteed to be more profitable to just hold than invest or use What? There is no such guarantee. In the past 6 months the prices of goods and services denominated in bitcoin have more than doubled.