4 ms·

Without crypto what will be the next delusional get rich quick scheme people will cling to?

by xwdv 4y ago

danans 4y ago
What if crypto (in whatever form) is the ultimate get rich quick scam/scheme and there is always a baseline number of people willing to dump their money into it? Can an asset class be built on top of a seemingly endless hope of people hoping to get rich quick? Take out the asset class part, and it sounds a lot like a lottery, which is just a regulated get rich scheme (where most participants lose monetarily, but get "entertainment") that turns a reliable human fallibility into a social funding mechanism. Take out the social funding, and you have casinos, which also provide entertainment in exchange for the feeling you might get rich quick. Casino companies are publicly traded securities: https://www.cga.ct.gov/PS95/rpt/olr/htm/95-R-0426.htm https://www.cga.ct.gov/PS95/rpt/olr/htm/95-R-0426.htm Is there a form of crypto that could provide the same?
- mherdeg 4y ago
  The downside with the lottery is that it's state controlled; if a group of talented engineers finds a way to play to extract positive expected value from other bettors, stakeholders in the government will call this outcome unfair and shut it down ( https://www.mass.gov/doc/letter-to-state-treasurer-steven-grossman-regarding-the-lottery-july-2012/download https://www.mass.gov/doc/letter-to-state-treasurer-steven-gr... ). Even if, on average, money goes from gamblers to social good, people will complain that sophisticated bettors are extracting an "unfair" profit. By contrast, the crypto markets provide an efficient funnel from low-information gamblers to sophisticated engineers. As long as a fair chunk of the profits are channeled to effective altruism causes (which I think is the status quo?) it's a good deal.
  - danans 4y ago
    > As long as a fair chunk of the profits are channeled to effective altruism causes (which I think is the status quo?) That's one heck of a qualification without a citation. The "altruism causes" channeled to would need to somehow outweigh the massive costs in terms of CO2 footprint and the loss of savings/security of an untold number of regular people (your "low-information gamblers") who bought into a big ponzi scheme. They can't be made whole (though society will definitionally pay for the subset who lost a significant portion of their life savings), but seems pretty legit to point a finger at those who scammed them.
woodruffw 4y ago
At least in the US, there are two sorts of schemes that people historically cling to: there's the goldbugs (who hoard precious metals because of the dollar's imminent collapse - any day now!) and the Amway types (who buy into pyramid cough multilevel schemes thinking that they'll ultimately profit off of their social circle). Cryptocurrencies merge these two groups of chumps into one group of hyper-chumps. So it stands to reason that many will go back to the old schemes which, arguably, is an improvement in the state of affairs.
oldgradstudent 4y ago
Could be anything. Real estate is a sensible investment, but a housing bubble makes it a delusional get rich scheme. Combine the most reasonable investment with a lot of easy leverage and you get a delusional get rich scheme.

Without crypto what will be the next delusional get rich quick scheme people will cling to?

by xwdv 4y ago

Without crypto what will be the next delusional get rich quick scheme people will cling to?

What if crypto (in whatever form) is the ultimate get rich quick scam/scheme and there is always a baseline number of people willing to dump their money into it? Can an asset class be built on top of a seemingly endless hope of people hoping to get rich quick? Take out the asset class part, and it sounds a lot like a lottery, which is just a regulated get rich scheme (where most participants lose monetarily, but get "entertainment") that turns a reliable human fallibility into a social funding mechanism. Take out the social funding, and you have casinos, which also provide entertainment in exchange for the feeling you might get rich quick. Casino companies are publicly traded securities: https://www.cga.ct.gov/PS95/rpt/olr/htm/95-R-0426.htm https://www.cga.ct.gov/PS95/rpt/olr/htm/95-R-0426.htm Is there a form of crypto that could provide the same?

mherdeg 4y ago
The downside with the lottery is that it's state controlled; if a group of talented engineers finds a way to play to extract positive expected value from other bettors, stakeholders in the government will call this outcome unfair and shut it down ( https://www.mass.gov/doc/letter-to-state-treasurer-steven-grossman-regarding-the-lottery-july-2012/download https://www.mass.gov/doc/letter-to-state-treasurer-steven-gr... ). Even if, on average, money goes from gamblers to social good, people will complain that sophisticated bettors are extracting an "unfair" profit. By contrast, the crypto markets provide an efficient funnel from low-information gamblers to sophisticated engineers. As long as a fair chunk of the profits are channeled to effective altruism causes (which I think is the status quo?) it's a good deal.
- danans 4y ago
  > As long as a fair chunk of the profits are channeled to effective altruism causes (which I think is the status quo?) That's one heck of a qualification without a citation. The "altruism causes" channeled to would need to somehow outweigh the massive costs in terms of CO2 footprint and the loss of savings/security of an untold number of regular people (your "low-information gamblers") who bought into a big ponzi scheme. They can't be made whole (though society will definitionally pay for the subset who lost a significant portion of their life savings), but seems pretty legit to point a finger at those who scammed them.

woodruffw 4y ago

At least in the US, there are two sorts of schemes that people historically cling to: there's the goldbugs (who hoard precious metals because of the dollar's imminent collapse - any day now!) and the Amway types (who buy into pyramid cough multilevel schemes thinking that they'll ultimately profit off of their social circle). Cryptocurrencies merge these two groups of chumps into one group of hyper-chumps. So it stands to reason that many will go back to the old schemes which, arguably, is an improvement in the state of affairs.

oldgradstudent 4y ago

Could be anything. Real estate is a sensible investment, but a housing bubble makes it a delusional get rich scheme. Combine the most reasonable investment with a lot of easy leverage and you get a delusional get rich scheme.