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I realize comparisons to Tulip Mania [1] aren't necessarily apt, but listening to the home improvement contractor I hired explain his crypto strategy certainly

I realize comparisons to Tulip Mania [1] aren't necessarily apt, but listening to the home improvement contractor I hired explain his crypto strategy certainly did leave me with that "peak bubble" vibe [2]. [1] https://www.investopedia.com/terms/d/dutch_tulip_bulb_market_bubble.asp https://www.investopedia.com/terms/d/dutch_tulip_bulb_market... [2] https://archive.fortune.com/magazines/fortune/fortune_archive/1996/04/15/211503/index.htm https://archive.fortune.com/magazines/fortune/fortune_archiv...

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phabricator 4y ago
Tulip mania is the go-to comment for every post about crypto on HN, you don't need the link. Shocked no one called this a Ponzi scheme yet.
- sofixa 4y ago
  TFA isn't describing a Ponzi scheme because (as far as we know) the person doing the machinations doesn't run the scheme (underlying "coin") and doesn't use new investors' money to pay off existing ones. It's just a pump and dump (buy while something is cheap, hype it up to make the price go up, then sell at the top).
  - phabricator 4y ago
    I know, still surprised no one has called it that
- efficax 4y ago
  tulip mania and ponzi schemes come up for a good reason
  - johnnymorgan 4y ago
    ..and those reason are what exactly in relation to the solve of the Byzantium Generals problem? USD is still the goto choice for ponzi and scams in general, does that invalidate it's utility?
    - Swenrekcah 4y ago
      False equivalency, since USD has actual uncontested utility and is backed by real world value.
      - rout39574 4y ago
        Backed by fiat. I mean, the US has got some really sharp and explodey fiat, arguably the most fiat fiat in the world. But we stopped pretending it was backed by anything else in the 70s.
        Swenrekcah 4y ago
        It isn’t backed by fiat. Fiat isn’t a thing, it is a description. USD is fiat money, built on trust sure, but in practice backed by the wealth and power of the United States.
        johnnymorgan 4y ago
        Nice circular logic there
    - JshWright 4y ago
      > USD is still the goto choice for ponzi and scams in general, does that invalidate it's utility? What percentage of circulating USD is involved in that sort of activity?
      - johnnymorgan 4y ago
        How about absolutely value over percentage as that is a total BS metric in this context and you know it. Give us absolutely values...yeah nice way to deflect but doesn't hold up bud.
- deleted 4y ago
  [deleted]
rhodorhoades 4y ago
At the bottom of that tulip mania article, investooedia is offering $1M crypto giveaway. We definitely live in a simulation.
yuuu 4y ago
Why does it matter that he was a home improvement contractor?
- LegitShady 4y ago
  read the second link
- blululu 4y ago
  If he were good at speculating he would be doing it full time.
- michaelt 4y ago
  There's a (possibly apocryphal) story [1] that Joe Kennedy got out of the stock market just before it crashed when a shoeshine boy gave him investment advice, which he saw as a sign of a bubble about to burst. 0xbadc0de5 revists this classic story, with a home improvement contractor replacing the shoeshine boy. [1] https://www.sfgate.com/news/article/BUSINESS-INSIDER-The-Mailbag-That-Quote-2804663.php https://www.sfgate.com/news/article/BUSINESS-INSIDER-The-Mai...
  - yuuu 4y ago
    The question was mostly rhetorical, intending to point out that getting investment advice from a home improvement contractor is no different than getting investment advice from a software developer on Hacker News. There was an implication that, since a home improvement contractor works with his hands, he's as stupid as a shoeshine boy.
- fundad 4y ago
  Probably because of how much money is sloshing around the home improvement industry. We're in the wrong business.
- akhmatova 4y ago
  It is significant that the people being taken aren't just teenagers and adult wastoids with addictive personalities. But rather professionals with (otherwise) stable careers. Who were led to believe that crypto was legit, and a way to finally get their fare share.
mherdeg 4y ago
What was his crypto strategy?
- 0xbadc0de5 4y ago
  I'm sure you can guess - basically boils down to the usual combination of "buy the dip" and "line goes up" that you often hear repeated on various YouTube channels and sub-Reddit's. In his defence, he did not use the phase "to the moon" even once. We did probe a bit, out of morbid curiosity, he was down something like 50%. There wasn't much deeper knowledge of the technical aspects of crypto or the various implementation differences, key management, etc. Not to mention traditional investing ideas like volatility and risk. For all appearances, just looks like a victim of the hype. He does do good reno work though and we pay him well for it. If he wants to buy magic beans with it, that's up to him.
germinalphrase 4y ago
For me - it was seeing a Bitcoin "ATM" next to the Dipping' Dots machine at my local mall.
- quickthrower2 4y ago
  Quotes because Bitcoin ATMs rarely allow conversion to cash (just from cash)?
  - germinalphrase 4y ago
    Correct
- popcalc 4y ago
  Those have a genuine purpose though. To help local drug dealers launder their earnings to cash.
  - HashBasher 4y ago
    2013 called, they want their narrative back. ATM machines have cameras and does KYC.
    - popcalc 4y ago
      The ones near me in SoCal let you liquidate 2.5K/day with an SMS verification and 360p selfie. In Europe you can do magnitudes higher and it's even laxer. Do the cameras actually turn people off? Hell no. Most people using the machines are networked mules sourced from Craigslist. What legit use case is there for paying the crazy 17-30% premiums if you have other options? Whales have always had OTC and the average dude can probably pay less in taxes selling on even a US-banked CEX. I know a guy who owned a sizable exchange at one point in the 2010s. Today he wishes he had never stepped into the world. The real shot callers are a mix of CBOE quants and international organized crime players. The narratives exist for a reason.
- dharmab 4y ago
  Those are so the elderly can pay scammers and ransomware.
powerhour 4y ago
For me it was minimum wage workers at a Jiffy Lube -- folks that probably don't have much disposable income believing they're going to 10000x their investment and be instarich.
- nerdix 4y ago
  You can see this on reddit too. Find a relatively new/unknown coin thats starting to get "next Doge/Shiba" hype on crypto blogs then look for a subreddit for that coin. You'll find quite a bit of people who clearly are working low end hourly wage jobs that are putting sizable percentages of their paycheck every couple of week into the coin. The sub will be littered with posts like "I just bought another 1 million JindoCoin! To the moon!!!!!" They are all hoping for the moonshot return that turns them into millionaires so they can leave the crappy job.
  - hotpotamus 4y ago
    I assume a lot of that is astroturfing, but it's really impossible to tell. It also seems to have religious elements to it which I find unfortunate.
wpietri 4y ago
I know that feeling. I was on a subway platform when a rando started explaining to me how she was investing in bitcoin mining. She was a real estate agent with no tech knowledge, but somebody she talked to persuaded her to buy and run hardware. What really scares me is that this was easily 5 years ago now. At the time I too thought "peak bubble". The extent to which this space has metastasized blows me away. Normally a scam dies when the novelty wanes and it runs out of suckers. But the cryptowhatever space has continually generated shiny new illusions for people to pump and dump. I'm now wondering if we've entered the age of the permanent floating scam, where "there's one born every minute" is enough to provide an eternal flow of suckers for an ever-shifting constellation of predators and useful idiots.
- atwood22 4y ago
  I didn't think Bitcoin was a bubble 5 years ago. The only people I knew using it were using it to buy drugs, and the price seemed to reflect that utility plus the novelty of its implementation. That real estate agent probably did quite well for herself, even at current prices.
  - wpietri 4y ago
    Depends upon her timing and what she was doing. Bitcoin had a peak in late 2017 and then fell 75%, taking 3 years to recover. If whatever she "invested" in was even valid, it's plausible that she made her bet based on rising prices. Or that the hardware became obsolete sooner than she was told. Or that she doubled down based on thinking the fall was a blip. There are a lot of ways for amateurs to lose money, and many of those ways are, as here, engineered by the people eager to take advantage of amateurs.
    - atwood22 4y ago
      I guess it just feels a little elitist to assume she didn't know what she was doing because she was a real estate agent. She definitely was a part of the scene way before most people, so hindsight makes me think she should get some benefit of the doubt. Like yea, she sells real estate, but maybe likes to socialize with a more tech-oriented crowd, or used to work in tech herself but chose real estate to have better hours, etc.
Aaronstotle 4y ago
I knew things were ridiculous when my good friend who is not technically inclined casually said "When dogecoin hits a $1" I was shocked because he said it with the same conviction as when the sun rises tomorrow.

deleted 4y ago

[deleted]

phabricator 4y ago

Tulip mania is the go-to comment for every post about crypto on HN, you don't need the link. Shocked no one called this a Ponzi scheme yet.

sofixa 4y ago
TFA isn't describing a Ponzi scheme because (as far as we know) the person doing the machinations doesn't run the scheme (underlying "coin") and doesn't use new investors' money to pay off existing ones. It's just a pump and dump (buy while something is cheap, hype it up to make the price go up, then sell at the top).
- phabricator 4y ago
  I know, still surprised no one has called it that
efficax 4y ago
tulip mania and ponzi schemes come up for a good reason
- johnnymorgan 4y ago
  ..and those reason are what exactly in relation to the solve of the Byzantium Generals problem? USD is still the goto choice for ponzi and scams in general, does that invalidate it's utility?
  - Swenrekcah 4y ago
    False equivalency, since USD has actual uncontested utility and is backed by real world value.
    - rout39574 4y ago
      Backed by fiat. I mean, the US has got some really sharp and explodey fiat, arguably the most fiat fiat in the world. But we stopped pretending it was backed by anything else in the 70s.
      - Swenrekcah 4y ago
        It isn’t backed by fiat. Fiat isn’t a thing, it is a description. USD is fiat money, built on trust sure, but in practice backed by the wealth and power of the United States.
        johnnymorgan 4y ago
        Nice circular logic there
  - JshWright 4y ago
    > USD is still the goto choice for ponzi and scams in general, does that invalidate it's utility? What percentage of circulating USD is involved in that sort of activity?
    - johnnymorgan 4y ago
      How about absolutely value over percentage as that is a total BS metric in this context and you know it. Give us absolutely values...yeah nice way to deflect but doesn't hold up bud.
deleted 4y ago
[deleted]

rhodorhoades 4y ago

At the bottom of that tulip mania article, investooedia is offering $1M crypto giveaway. We definitely live in a simulation.

yuuu 4y ago

Why does it matter that he was a home improvement contractor?

LegitShady 4y ago
read the second link
blululu 4y ago
If he were good at speculating he would be doing it full time.
michaelt 4y ago
There's a (possibly apocryphal) story [1] that Joe Kennedy got out of the stock market just before it crashed when a shoeshine boy gave him investment advice, which he saw as a sign of a bubble about to burst. 0xbadc0de5 revists this classic story, with a home improvement contractor replacing the shoeshine boy. [1] https://www.sfgate.com/news/article/BUSINESS-INSIDER-The-Mailbag-That-Quote-2804663.php https://www.sfgate.com/news/article/BUSINESS-INSIDER-The-Mai...
- yuuu 4y ago
  The question was mostly rhetorical, intending to point out that getting investment advice from a home improvement contractor is no different than getting investment advice from a software developer on Hacker News. There was an implication that, since a home improvement contractor works with his hands, he's as stupid as a shoeshine boy.
fundad 4y ago
Probably because of how much money is sloshing around the home improvement industry. We're in the wrong business.
akhmatova 4y ago
It is significant that the people being taken aren't just teenagers and adult wastoids with addictive personalities. But rather professionals with (otherwise) stable careers. Who were led to believe that crypto was legit, and a way to finally get their fare share.

mherdeg 4y ago

What was his crypto strategy?

0xbadc0de5 4y ago
I'm sure you can guess - basically boils down to the usual combination of "buy the dip" and "line goes up" that you often hear repeated on various YouTube channels and sub-Reddit's. In his defence, he did not use the phase "to the moon" even once. We did probe a bit, out of morbid curiosity, he was down something like 50%. There wasn't much deeper knowledge of the technical aspects of crypto or the various implementation differences, key management, etc. Not to mention traditional investing ideas like volatility and risk. For all appearances, just looks like a victim of the hype. He does do good reno work though and we pay him well for it. If he wants to buy magic beans with it, that's up to him.

germinalphrase 4y ago

For me - it was seeing a Bitcoin "ATM" next to the Dipping' Dots machine at my local mall.

quickthrower2 4y ago
Quotes because Bitcoin ATMs rarely allow conversion to cash (just from cash)?
- germinalphrase 4y ago
  Correct
popcalc 4y ago
Those have a genuine purpose though. To help local drug dealers launder their earnings to cash.
- HashBasher 4y ago
  2013 called, they want their narrative back. ATM machines have cameras and does KYC.
  - popcalc 4y ago
    The ones near me in SoCal let you liquidate 2.5K/day with an SMS verification and 360p selfie. In Europe you can do magnitudes higher and it's even laxer. Do the cameras actually turn people off? Hell no. Most people using the machines are networked mules sourced from Craigslist. What legit use case is there for paying the crazy 17-30% premiums if you have other options? Whales have always had OTC and the average dude can probably pay less in taxes selling on even a US-banked CEX. I know a guy who owned a sizable exchange at one point in the 2010s. Today he wishes he had never stepped into the world. The real shot callers are a mix of CBOE quants and international organized crime players. The narratives exist for a reason.
dharmab 4y ago
Those are so the elderly can pay scammers and ransomware.

powerhour 4y ago

For me it was minimum wage workers at a Jiffy Lube -- folks that probably don't have much disposable income believing they're going to 10000x their investment and be instarich.

nerdix 4y ago
You can see this on reddit too. Find a relatively new/unknown coin thats starting to get "next Doge/Shiba" hype on crypto blogs then look for a subreddit for that coin. You'll find quite a bit of people who clearly are working low end hourly wage jobs that are putting sizable percentages of their paycheck every couple of week into the coin. The sub will be littered with posts like "I just bought another 1 million JindoCoin! To the moon!!!!!" They are all hoping for the moonshot return that turns them into millionaires so they can leave the crappy job.
- hotpotamus 4y ago
  I assume a lot of that is astroturfing, but it's really impossible to tell. It also seems to have religious elements to it which I find unfortunate.

wpietri 4y ago

I know that feeling. I was on a subway platform when a rando started explaining to me how she was investing in bitcoin mining. She was a real estate agent with no tech knowledge, but somebody she talked to persuaded her to buy and run hardware. What really scares me is that this was easily 5 years ago now. At the time I too thought "peak bubble". The extent to which this space has metastasized blows me away. Normally a scam dies when the novelty wanes and it runs out of suckers. But the cryptowhatever space has continually generated shiny new illusions for people to pump and dump. I'm now wondering if we've entered the age of the permanent floating scam, where "there's one born every minute" is enough to provide an eternal flow of suckers for an ever-shifting constellation of predators and useful idiots.

atwood22 4y ago
I didn't think Bitcoin was a bubble 5 years ago. The only people I knew using it were using it to buy drugs, and the price seemed to reflect that utility plus the novelty of its implementation. That real estate agent probably did quite well for herself, even at current prices.
- wpietri 4y ago
  Depends upon her timing and what she was doing. Bitcoin had a peak in late 2017 and then fell 75%, taking 3 years to recover. If whatever she "invested" in was even valid, it's plausible that she made her bet based on rising prices. Or that the hardware became obsolete sooner than she was told. Or that she doubled down based on thinking the fall was a blip. There are a lot of ways for amateurs to lose money, and many of those ways are, as here, engineered by the people eager to take advantage of amateurs.
  - atwood22 4y ago
    I guess it just feels a little elitist to assume she didn't know what she was doing because she was a real estate agent. She definitely was a part of the scene way before most people, so hindsight makes me think she should get some benefit of the doubt. Like yea, she sells real estate, but maybe likes to socialize with a more tech-oriented crowd, or used to work in tech herself but chose real estate to have better hours, etc.

Aaronstotle 4y ago

I knew things were ridiculous when my good friend who is not technically inclined casually said "When dogecoin hits a $1" I was shocked because he said it with the same conviction as when the sun rises tomorrow.