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Wash trading aside, you're right that scams like this need new money. But consider who the target is here: would-be smart guys who are also would-be rich guys.

Wash trading aside, you're right that scams like this need new money. But consider who the target is here: would-be smart guys who are also would-be rich guys. In this new gilded age, we all know there are plenty of people getting wildly rich. Looking at who gets rich, and how quickly it can happen, it's easy to think, "What do they have that I don't have?" (There are answers to that question, of course, but not ones these people are eager to hear.) That's a view very much encouraged in the cryptocurrency culture, and in the day-trader culture that preceded it. That with smarts and a little luck, a guy can get the riches he was destined for. The people who fall for it of course never ask where the money is coming from, because if they did they'd figure out it was suckers like them. So when they see an ad that says, "ITS YOUR CHANCE TO BUY THE MOST POWERFUL CRYPTO COIN" they don't ask why the chance is specifically theirs. They don't ask what "powerful" could mean for a currency. They don't ask who's trying to convince them, or why the convincer can't even punctuate a sentence. They say, "Yes! It's my chance, just like I know I deserve!" And then they put in their engagement ring fund or the house downpayment fund or the money they borrow from family. And very shortly that money ends up in the pockets of assorted assholes, who are now better funded for their next scam.

junofan 4y ago
I think you’re way off on the psychology of participants. Lots play poker. Bluffing is normal.
- metadat 4y ago
  Ok smart guy.
- wpietri 4y ago
  Many do play poker, but most play at fair games of poker and they play it for fun. None of that applies to the suckers who bought DOCK based on market manipulation, which is generally a crime. [1] This is more equivalent to Three-card Monte, [2] which may look like a fair game involving cards, but which also preys on the would-be smart. [1] https://en.wikipedia.org/wiki/Market_manipulation https://en.wikipedia.org/wiki/Market_manipulation [2] https://en.wikipedia.org/wiki/Three-card_Monte https://en.wikipedia.org/wiki/Three-card_Monte
- atwood22 4y ago
- akhmatova 4y ago
  Your "lots" is unsubstantiated. "Some" is probably more like it.
Cxckers 4y ago
> The people who fall for it of course never ask where the money is coming from, because if they did they'd figure out it was suckers like them. This is the case with all forms of gambling. I think that they know that the money is from others less fortunate. However, human nature seems to make us believe that somehow, we will be the lucky one.
Benjammer 4y ago
Here's the thing I wonder though. If you sat each one down and explained that the whole thing was basically a ponzi scheme, or like a lottery where everyone loses except one person who wins big, I'm not certain you wouldn't see a majority of them say "Yeah, I know," or just keep "playing" after hearing the explanation. To borrow the cliche, you can't really use logic to change someone's mind when they didn't use logic to make up their mind in the first place. Also, gambling is powerfully addictive to a lot of people.
- chatmasta 4y ago
  A lot of people got rich from Madoff’s Ponzi scheme. The problem is they never cashed out their gains. You see the same thing in these kind of crypto trades - yes, you’re participating in a Ponzi scheme, but it actually works as long as it does keep getting new money to buy out your entry position… which can continue happening for quite a long time before actually collapsing. There are also layers to the Ponzi scheme. The alt-coin is just the first one. Even if you cash out for a profit, you probably didn’t even sell it for fiat directly, but sold it for some “less risky” currency like Ethereum or Bitcoin. One might argue you’ve only moved from one a smaller Ponzi scheme to a larger one. But then again… trading across pools of risk is widely accepted as a method of generating wealth. So who are we to judge?
  - wpietri 4y ago
    For sure. It's only a profit when you directly hold more cash than you put in. Madoff's victims didn't lose their money when he finally crashed. They lost it when they put it in.
- kenjackson 4y ago
  This mentality was common with penny stocks around 1998 (maybe still true). But the belief (and reality) was that you just didn't want to be left holding the bag at the end. If you got in low enough and got out soon enough, that's all you wanted. So it was all pump and dump. No one believed in the companies, but they believed they could be in early enough and out just in the nick of time. At a larger scale, I'm not sure the difference with the NYSE or NASDAQ. I don't vote w/ any of the companies for which I own stock. I just hope I buy low and sell when it is much higher -- just the volumes are large enough that small players can't pump the value of the stock -- but reddit and TikTok has shown even this world can be gamed.
sorry_outta_gas 4y ago
For the most part that's all crypto
leobg 4y ago
Very well put. It’s what Hannah Arendt said about those who followed Hitler: What they really fell for was their own bullshit story.

junofan 4y ago

I think you’re way off on the psychology of participants. Lots play poker. Bluffing is normal.

metadat 4y ago
Ok smart guy.
wpietri 4y ago
Many do play poker, but most play at fair games of poker and they play it for fun. None of that applies to the suckers who bought DOCK based on market manipulation, which is generally a crime. [1] This is more equivalent to Three-card Monte, [2] which may look like a fair game involving cards, but which also preys on the would-be smart. [1] https://en.wikipedia.org/wiki/Market_manipulation https://en.wikipedia.org/wiki/Market_manipulation [2] https://en.wikipedia.org/wiki/Three-card_Monte https://en.wikipedia.org/wiki/Three-card_Monte
atwood22 4y ago
akhmatova 4y ago
Your "lots" is unsubstantiated. "Some" is probably more like it.

Cxckers 4y ago

> The people who fall for it of course never ask where the money is coming from, because if they did they'd figure out it was suckers like them. This is the case with all forms of gambling. I think that they know that the money is from others less fortunate. However, human nature seems to make us believe that somehow, we will be the lucky one.

Benjammer 4y ago

Here's the thing I wonder though. If you sat each one down and explained that the whole thing was basically a ponzi scheme, or like a lottery where everyone loses except one person who wins big, I'm not certain you wouldn't see a majority of them say "Yeah, I know," or just keep "playing" after hearing the explanation. To borrow the cliche, you can't really use logic to change someone's mind when they didn't use logic to make up their mind in the first place. Also, gambling is powerfully addictive to a lot of people.

chatmasta 4y ago
A lot of people got rich from Madoff’s Ponzi scheme. The problem is they never cashed out their gains. You see the same thing in these kind of crypto trades - yes, you’re participating in a Ponzi scheme, but it actually works as long as it does keep getting new money to buy out your entry position… which can continue happening for quite a long time before actually collapsing. There are also layers to the Ponzi scheme. The alt-coin is just the first one. Even if you cash out for a profit, you probably didn’t even sell it for fiat directly, but sold it for some “less risky” currency like Ethereum or Bitcoin. One might argue you’ve only moved from one a smaller Ponzi scheme to a larger one. But then again… trading across pools of risk is widely accepted as a method of generating wealth. So who are we to judge?
- wpietri 4y ago
  For sure. It's only a profit when you directly hold more cash than you put in. Madoff's victims didn't lose their money when he finally crashed. They lost it when they put it in.
kenjackson 4y ago
This mentality was common with penny stocks around 1998 (maybe still true). But the belief (and reality) was that you just didn't want to be left holding the bag at the end. If you got in low enough and got out soon enough, that's all you wanted. So it was all pump and dump. No one believed in the companies, but they believed they could be in early enough and out just in the nick of time. At a larger scale, I'm not sure the difference with the NYSE or NASDAQ. I don't vote w/ any of the companies for which I own stock. I just hope I buy low and sell when it is much higher -- just the volumes are large enough that small players can't pump the value of the stock -- but reddit and TikTok has shown even this world can be gamed.

sorry_outta_gas 4y ago

For the most part that's all crypto

leobg 4y ago

Very well put. It’s what Hannah Arendt said about those who followed Hitler: What they really fell for was their own bullshit story.