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1) The author is arguing against skeptics who are "infinitely hostile" to crypto because it consists of "100% scams". I don't think many skeptics believe crypto

1) The author is arguing against skeptics who are "infinitely hostile" to crypto because it consists of "100% scams". I don't think many skeptics believe crypto is 100% scams. Most skeptics would say that the use cases are overstated and the incentives to pump-and-dump are so high that an unacceptable rate of scams was inevitable. If you're going to write an article to refute skeptics, refute the actual argument. 2) The author strongly implies that skeptics are skeptical because they have fallen for scams (by "clicking on spam emails"). Insulting the intelligence of your opponent is also not a compelling way to refute an argument. I have always been skeptical, I have never been scammed, and I don't think I'm unique. 3) The author's research found that the scam rate "seemed low." Molly White is probably the person working harder than any other to track this scam rate, and her "grift counter" currently reports losses of over $12 billion. https://web3isgoinggreat.com https://web3isgoinggreat.com

mattdesl 4y ago
$12B over several years sounds like a lot until you realize how much volume is in the crypto market - $179B in 24 hours according to one source! https://www.statista.com/statistics/1272903/cryptocurrency-trade-volume/ https://www.statista.com/statistics/1272903/cryptocurrency-t...
- vkou 4y ago
  I own a dog. You own a cat. I say my dog is worth a million dollars. You say your cat is worth a million dollars. I trade you my dog for your cat. Then we trade them back. We've just created 2 million dollars of daily trade volume, err, economic activity. When looking at value stolen by scammers, what matters is not the daily trade volume, what matters is how much money was put into the ecosystem [1], and what fraction of it was stolen. [1] Which is a lot less than 180B/day.
  - deleted 4y ago
    [deleted]
  - hailwren 4y ago
    > what fraction of it was stolen This is the rub. If you’re using mcap and mark-to-market rates for total value stolen, it’s completely reasonable to use the same rate to evaluate the size of the system.
  - mattdesl 4y ago
    Even if you only look at stablecoin volume, it is significant. 110B over the last 7 days: https://dune.com/hagaetc/stablecoins https://dune.com/hagaetc/stablecoins I guess you could argue the billions in daily transfers are wash trading, unless the transfer is part of an exploit, and then it’s not wash trading?
  - actionfromafar 4y ago
    To be clear, stolen crypto is true economic activity, right? Edit to downvoters: I actually meant it unironically. Thiefs often want to "cash out" as soon as possible. I'm not saying it's a net good, but it feels "real and gritty" as opposed to many other crypto transactions.
  - ETH_start 4y ago
    >>I say my dog is worth a million dollars. You say your cat is worth a million dollars. I trade you my dog for your cat. Then we trade them back. Uniswap liquidity providers charge a fee for every swap, proportional to the volume swapped, so faking volume like this would be prohibitively expensive.
  - pcthrowaway 4y ago
    I think the main difference here is that your dog/cat don't have markets that they can be traded in relatively easily. There aren't pools of liquidity for which they can be exchanged. Also, your dog and your friend's cat aren't like anything else. The example you constructed is superficially more similar to the NFT market anyway. If dogs and cats were fungible, and there was a market for fractions of both that could be exchanged in and out of, and contained hundreds of thousands of USD in standing liquidity, and the value of your dog was $1 million, and the cat was also $1 million, then sure. Swapping the dog for the cat is approximated by $2 million to the same accuracy that many assets (houses, stocks, etc) are described in notional value.
  - llanowarelves 4y ago
    I agree, but everything's price can be (and is) gamed that way though. So to what degree is trade volume indicative of anything in other things?
- pigsty 4y ago
  How much of that 179 billion was exchanged for legal goods and services other than crypto or cash itself?
- solarpunk 4y ago
  12B in realized losses, as compared to 179B in unrealized volume. Seems like an apples to oranges comparison there.
  - mattdesl 4y ago
    Sure—the point is, $12 billion of transfers being attributable to exploits over several years is quite small considering crypto markets are slinging an order of magnitude more than that every 24 hours.
    - lxgr 4y ago
      That‘s a bit like calling credit card payment fraud negligible by contrasting it with all monetary movements, including HFT trading volumes and interbank payment flows.
      - mattdesl 4y ago
        I am simply putting the number in context. Credit cards dealing with $8B USD of fraudulent charges per year sounds like a staggering amount until you realize it is a small fraction of all transactions. https://www.security.org/digital-safety/credit-card-fraud-report/ https://www.security.org/digital-safety/credit-card-fraud-re...
        lxgr 4y ago
        Yes, but the issue with your comparison is that you are comparing amounts across categories. Fraud losses are definitionally realized losses, whereas gross crypto transaction volume includes things like a single entity rebalancing funds across wallets or exchanges. On a chain with low or zero fees, a single actor can trivially generate billions of transaction volume like that on a single day.
        mattdesl 4y ago
        Uniswap charges a fee per swap. Generating billions of dollars worth of fake stablecoin transaction volume per day would cost you millions of dollars. The comparison is suitable to show relative scale: $12B over some years sounds like a lot, until you realize it is a small fraction of the total crypto market. Likewise, you could paint VISA as being rampant with fraud by pointing to the many billions lost per annum in credit card fraud, but this represents a small percentage of all VISA activity.
interstice 4y ago
Re 1) That may be the case but opinions are often worded as absolutes (crypto is good/bad) so while the writers themselves may not be infinitely hostile the wording of their articles can be. At least, that’s what I suspect the point here is?
mhoad 4y ago
As recently as just a few days ago the European Central Bank did a look at where things currently stand with crypto and among many other issues they raised they mentioned that in their view: “cryptocurrency is rarely used for legal transactions” Source: https://www.ecb.europa.eu/press/blog/date/2022/html/ecb.blog221130~5301eecd19.en.html https://www.ecb.europa.eu/press/blog/date/2022/html/ecb.blog...
- Karrot_Kream 4y ago
  From the article: "If nothing’s wrong with your country’s financial or political system, then you don’t need crypto. If you use crypto anyway, it will be worse than your regular financial system, because it’s trading off many things you need (efficiency, speed, safety, the good kinds of regulation) for something you don’t need (avoiding the bad kinds of regulation)."
- sinity 4y ago
  Well, I _might've_ used it for a few illegal transactions. Like purchases of prohibited substances. (also some legal ones, tho) It's a feature, obviously. Why is "useful for illegal transactions" supposed to be a bad thing, when these illegal transactions are illegal for extremely dubious reasons? Ofc it's bad from the perspective of the people who want control over you. Good.
  - lisper 4y ago
    > Why is "useful for illegal transactions" supposed to be a bad thing, when these illegal transactions are illegal for extremely dubious reasons? Because some illegal transactions are illegal for very non-dubious reasons, but crypto doesn't make this distinction. (Crypto made ransomware a profitable endeavor.)
    - sinity 4y ago
      Sure, but crypto allows these because it's not as easily controlled by the governments as other things. Same with cash. Which governments increasingly constrain, for this reason. Yet there are not as many people commenting enthusiastically about wanting cash to disappear / fail, or suggesting similar measures against it. (KYC, AML...) Why is cash okay, but _digital equivalent_ is not? When physical transactions are less and less relevant? Why make the decision to basically leave these advantages in the past? I don't think preventing ransomware attacks or financing terrorism is worth losing the capability to transact freely online. Potential totalitarianism is way more scary than 9/11. Quote from a book, "Manna": > With the arrival of robots, tens of millions of people lost their minimum wage jobs and the wealth concentrated so quickly. The rich controlled America’s bureaucracy, military, businesses and natural resources, and the unemployed masses lived in terrafoam, cut off from any opportunity to change their situation. There was the facade of “free elections,” but only candidates supported by the rich could ever get on the ballot. The government was completely controlled by the rich, as were the robotic security forces, the military and the intelligence organizations. American democracy had morphed into a third world dictatorship ruled by the wealthy elite. > Ultimately, you would expect that there would be riots across America. But the people could not riot. The terrorist scares at the beginning of the century had caused a number of important changes. Eventually, there were video security cameras and microphones covering and recording nearly every square inch of public space in America. There were taps on all phone conversations and Internet messages sniffing for terrorist clues. If anyone thought about starting a protest rally or a riot, or discussed any form of civil disobedience with anyone else, he was branded a terrorist and preemptively put in jail. Combine that with robotic security forces, and riots are impossible.
s1artibartfast 4y ago
I think what you wrote is a reasonable position, but it t seems to me that there is least a portion of the population who is basically "infinitely hostile" in the sense that they have made it part of their identity to hate crypto and become zealots. These are people that will boycott people and products remotely associated with crypto. I don't think the author is trying to argue against the type of skeptic you describe. In fact, they seem to mostly agree. In short I think you are misconstruing the argument.
fallingknife 4y ago
$12 billion sounds like a lot, but Madoff's ponzi scheme was $50 billion, and that's just one instance, not a whole market aggregate like the $12 billion. Also, if you want to talk about fraud rate, you need a denominator. A big sounding number by itself is meaningless.
adra 4y ago
You could use agnostics vs atheists as an analog here. Most effectively atheist individuals are most likely technically agnostic because they are open to receive new information in order to have their opinions on the matter changed. A hard Atheist would make their decision based on no evidence at all, and I think you'll find most atheists are at least open to be effectively sold on deism if it came out incontrovertibly (still waiting). All of this is the same with a crypto sceptic. I don't think you can assume crypto has to be a scam or more aptly a speculative investment scheme searching for a purpose. Some day, we could be convinced that crypto is super valuable for solving X, and the day it happens is the day I look to it with interest (still waiting).
- lisper 4y ago
  No, an atheist is one whose current Bayesian prior on the existence of God is close to zero. An agnostic is one whose current prior is close to 0.5. A theist's prior is close to one.
  - MisterBastahrd 4y ago
    There are agnostic atheists and agnostic theists.
    - lisper 4y ago
      > agnostic atheists P ~= 0.3 > and agnostic theists P ~= 0.7
  - s1artibartfast 4y ago
    That's not how I see it, but I think it raises the interesting question. What is the need or value in coming to a definitive conclusion on something when it doesn't impact your daily life or choices. My personal opinion and observation is that many people choose to take a stance on topics despite having no need to do so. I think they would be better served remaining agnostic on most topics despite their priors leaning one way or another.
    - 4y ago
SilasX 4y ago
>The author is arguing against skeptics who are "infinitely hostile" to crypto because it consists of "100% scams". I don't think many skeptics believe crypto is 100% scams This looks like the sanewashing[1] anti-pattern. Numerous comments say exactly this, every time it comes up. It's great that you personally have a nuanced opinion on the matter, but you should be careful about speaking for others, or saying what skeptics believe. From a quick search of HN of "all crypto scam", filtering out ones that aren't endorsing the view, or are throwaway accounts: https://news.ycombinator.com/item?id=33566892 https://news.ycombinator.com/item?id=33566892 https://news.ycombinator.com/item?id=31012827 https://news.ycombinator.com/item?id=31012827 https://news.ycombinator.com/item?id=33524215 https://news.ycombinator.com/item?id=33524215 https://news.ycombinator.com/item?id=33654880 https://news.ycombinator.com/item?id=33654880 [1] https://andrewaustin.blog/2022/02/14/sanewashing-its-more-widespread-than-you-might-think/ https://andrewaustin.blog/2022/02/14/sanewashing-its-more-wi...
darawk 4y ago
1) Large numbers of people on this site regularly argue that the entire conceptual foundation of crypto is fraudulent and/or without merit, not simply overstated. 2) I don't think he's arguing that everyone who thinks crypto is a scam is that sort of person, he was saying that most people who have been scammed are. 3) Molly White's number's agree with OP's. $12 billion vs a market cap of $858B is roughly the same percentage identified in the article. And before you complain about the use of market cap as denominator, market cap is also the numerator being used by Molly White's analysis, so it's the correct denominator.
- kokanee 4y ago
  This seems to be one of the better responses to my comment. Thanks. Some thoughts in reply: 1) People should be more hesitant to speak in absolutes. Unfortunately it’s possible that having a nuanced take is inversely correlated with the tendency to post noisy comments online. Maybe, regardless of the underlying stance of “most” skeptics, some more honest dialogue is warranted. Point conceded. 2. Hm. If that’s the case, the author’s assertion that most people who have been scammed are the kinds of people who fall for scams is fair, but not going to change many minds. 3. This is discussed ad nauseam below, so I’ll just add a reminder that we’re debating the author’s statement that “big crypto projects are very rarely scams” as evidenced by his google search. He goes on to say that “Crypto is a few hundred interesting projects, plus a long tail of thousands of scams.” So, most crypto projects are safe if you just ignore most crypto projects and only consider the most dominant. Realized losses vs unrealized market cap aside, the dynamics that incentivize that long tail of scams are worth worrying about in my view.
  - darawk 4y ago
    Thanks, agree with 1 and 2. For 3, I think his statement as written "big crypto projects are very rarely scams" is clearly not literally true in a meaningful sense, and it's right to criticize him for that. However, I think a weaker statement like "The people that complain that crypto projects are scams are overstating how dense the space is with scams" is probably more accurate. It's sort of hard to determine how to weight an analysis of the density of scams in a space. Certainly if you weight by project count, it'll be quite high. If you weight by market cap, it'll be considerably lower. But to your actual point, I agree worrying about scams in crypto is very important, and I read the OP as (admittedly, somewhat carelessly) trying to argue against the view that "all" or "nearly all" crypto projects are scams. I think a better way to state it might be something like: Post dotcom bubble pop a lot of people were saying "those internet companies were all scams", and they were right in some kind of media-attention-weighted sense, and maybe even some other senses. But there were certainly a lot of real and important companies there, and even a lot of near-real-and-important companies that were just a little ahead of their time and didn't make it, and I don't think it's fair to dismiss most of them as scams. I'd definitely say crypto is still in the pre-making-it stage of its lifecycle, and it remains to be seen whether any of these projects will end up being say, the Google or Amazon of this space, that survives the winter and goes on to do meaningful things. However, even if they all die, I think it's fair to say that e.g. Ethereum and Bitcoin were sincere attempts at building novel technology.
lamontcg 4y ago
> 1) The author is arguing against skeptics who are "infinitely hostile" to crypto because it consists of "100% scams". I don't think many skeptics believe crypto is 100% scams. Most skeptics would say that the use cases are overstated and the incentives to pump-and-dump are so high that an unacceptable rate of scams was inevitable. If you're going to write an article to refute skeptics, refute the actual argument. The more aggressive skeptical argument is that cryptocurrencies can be looked at as a banking system with no government backstop at all, which are vulnerable to a systemic bank panic and run the system -- creating contagion effects that will ultimately knock down all the dominoes. Financial systems are all vulnerable to the fact that they are not stable systems and so they all need circuit breakers and need automatic measures in place to backstop the system in the event of a panic (critics of the argument that I'm making will point out that doesn't produce any certainty of stability, but they miss the point that those measures do make the system more stable). Without those, they'll definitely hit a systemic panic and will unravel sooner rather than later.

mattdesl 4y ago

$12B over several years sounds like a lot until you realize how much volume is in the crypto market - $179B in 24 hours according to one source! https://www.statista.com/statistics/1272903/cryptocurrency-trade-volume/ https://www.statista.com/statistics/1272903/cryptocurrency-t...

vkou 4y ago
I own a dog. You own a cat. I say my dog is worth a million dollars. You say your cat is worth a million dollars. I trade you my dog for your cat. Then we trade them back. We've just created 2 million dollars of daily trade volume, err, economic activity. When looking at value stolen by scammers, what matters is not the daily trade volume, what matters is how much money was put into the ecosystem [1], and what fraction of it was stolen. [1] Which is a lot less than 180B/day.
- deleted 4y ago
  [deleted]
- hailwren 4y ago
  > what fraction of it was stolen This is the rub. If you’re using mcap and mark-to-market rates for total value stolen, it’s completely reasonable to use the same rate to evaluate the size of the system.
- mattdesl 4y ago
  Even if you only look at stablecoin volume, it is significant. 110B over the last 7 days: https://dune.com/hagaetc/stablecoins https://dune.com/hagaetc/stablecoins I guess you could argue the billions in daily transfers are wash trading, unless the transfer is part of an exploit, and then it’s not wash trading?
- actionfromafar 4y ago
  To be clear, stolen crypto is true economic activity, right? Edit to downvoters: I actually meant it unironically. Thiefs often want to "cash out" as soon as possible. I'm not saying it's a net good, but it feels "real and gritty" as opposed to many other crypto transactions.
- ETH_start 4y ago
  >>I say my dog is worth a million dollars. You say your cat is worth a million dollars. I trade you my dog for your cat. Then we trade them back. Uniswap liquidity providers charge a fee for every swap, proportional to the volume swapped, so faking volume like this would be prohibitively expensive.
- pcthrowaway 4y ago
  I think the main difference here is that your dog/cat don't have markets that they can be traded in relatively easily. There aren't pools of liquidity for which they can be exchanged. Also, your dog and your friend's cat aren't like anything else. The example you constructed is superficially more similar to the NFT market anyway. If dogs and cats were fungible, and there was a market for fractions of both that could be exchanged in and out of, and contained hundreds of thousands of USD in standing liquidity, and the value of your dog was $1 million, and the cat was also $1 million, then sure. Swapping the dog for the cat is approximated by $2 million to the same accuracy that many assets (houses, stocks, etc) are described in notional value.
- llanowarelves 4y ago
  I agree, but everything's price can be (and is) gamed that way though. So to what degree is trade volume indicative of anything in other things?
pigsty 4y ago
How much of that 179 billion was exchanged for legal goods and services other than crypto or cash itself?
solarpunk 4y ago
12B in realized losses, as compared to 179B in unrealized volume. Seems like an apples to oranges comparison there.
- mattdesl 4y ago
  Sure—the point is, $12 billion of transfers being attributable to exploits over several years is quite small considering crypto markets are slinging an order of magnitude more than that every 24 hours.
  - lxgr 4y ago
    That‘s a bit like calling credit card payment fraud negligible by contrasting it with all monetary movements, including HFT trading volumes and interbank payment flows.
    - mattdesl 4y ago
      I am simply putting the number in context. Credit cards dealing with $8B USD of fraudulent charges per year sounds like a staggering amount until you realize it is a small fraction of all transactions. https://www.security.org/digital-safety/credit-card-fraud-report/ https://www.security.org/digital-safety/credit-card-fraud-re...
      - lxgr 4y ago
        Yes, but the issue with your comparison is that you are comparing amounts across categories. Fraud losses are definitionally realized losses, whereas gross crypto transaction volume includes things like a single entity rebalancing funds across wallets or exchanges. On a chain with low or zero fees, a single actor can trivially generate billions of transaction volume like that on a single day.
        mattdesl 4y ago
        Uniswap charges a fee per swap. Generating billions of dollars worth of fake stablecoin transaction volume per day would cost you millions of dollars. The comparison is suitable to show relative scale: $12B over some years sounds like a lot, until you realize it is a small fraction of the total crypto market. Likewise, you could paint VISA as being rampant with fraud by pointing to the many billions lost per annum in credit card fraud, but this represents a small percentage of all VISA activity.

interstice 4y ago

Re 1) That may be the case but opinions are often worded as absolutes (crypto is good/bad) so while the writers themselves may not be infinitely hostile the wording of their articles can be. At least, that’s what I suspect the point here is?

mhoad 4y ago

As recently as just a few days ago the European Central Bank did a look at where things currently stand with crypto and among many other issues they raised they mentioned that in their view: “cryptocurrency is rarely used for legal transactions” Source: https://www.ecb.europa.eu/press/blog/date/2022/html/ecb.blog221130~5301eecd19.en.html https://www.ecb.europa.eu/press/blog/date/2022/html/ecb.blog...

Karrot_Kream 4y ago
From the article: "If nothing’s wrong with your country’s financial or political system, then you don’t need crypto. If you use crypto anyway, it will be worse than your regular financial system, because it’s trading off many things you need (efficiency, speed, safety, the good kinds of regulation) for something you don’t need (avoiding the bad kinds of regulation)."
sinity 4y ago
Well, I _might've_ used it for a few illegal transactions. Like purchases of prohibited substances. (also some legal ones, tho) It's a feature, obviously. Why is "useful for illegal transactions" supposed to be a bad thing, when these illegal transactions are illegal for extremely dubious reasons? Ofc it's bad from the perspective of the people who want control over you. Good.
- lisper 4y ago
  > Why is "useful for illegal transactions" supposed to be a bad thing, when these illegal transactions are illegal for extremely dubious reasons? Because some illegal transactions are illegal for very non-dubious reasons, but crypto doesn't make this distinction. (Crypto made ransomware a profitable endeavor.)
  - sinity 4y ago
    Sure, but crypto allows these because it's not as easily controlled by the governments as other things. Same with cash. Which governments increasingly constrain, for this reason. Yet there are not as many people commenting enthusiastically about wanting cash to disappear / fail, or suggesting similar measures against it. (KYC, AML...) Why is cash okay, but _digital equivalent_ is not? When physical transactions are less and less relevant? Why make the decision to basically leave these advantages in the past? I don't think preventing ransomware attacks or financing terrorism is worth losing the capability to transact freely online. Potential totalitarianism is way more scary than 9/11. Quote from a book, "Manna": > With the arrival of robots, tens of millions of people lost their minimum wage jobs and the wealth concentrated so quickly. The rich controlled America’s bureaucracy, military, businesses and natural resources, and the unemployed masses lived in terrafoam, cut off from any opportunity to change their situation. There was the facade of “free elections,” but only candidates supported by the rich could ever get on the ballot. The government was completely controlled by the rich, as were the robotic security forces, the military and the intelligence organizations. American democracy had morphed into a third world dictatorship ruled by the wealthy elite. > Ultimately, you would expect that there would be riots across America. But the people could not riot. The terrorist scares at the beginning of the century had caused a number of important changes. Eventually, there were video security cameras and microphones covering and recording nearly every square inch of public space in America. There were taps on all phone conversations and Internet messages sniffing for terrorist clues. If anyone thought about starting a protest rally or a riot, or discussed any form of civil disobedience with anyone else, he was branded a terrorist and preemptively put in jail. Combine that with robotic security forces, and riots are impossible.

s1artibartfast 4y ago

I think what you wrote is a reasonable position, but it t seems to me that there is least a portion of the population who is basically "infinitely hostile" in the sense that they have made it part of their identity to hate crypto and become zealots. These are people that will boycott people and products remotely associated with crypto. I don't think the author is trying to argue against the type of skeptic you describe. In fact, they seem to mostly agree. In short I think you are misconstruing the argument.

fallingknife 4y ago

$12 billion sounds like a lot, but Madoff's ponzi scheme was $50 billion, and that's just one instance, not a whole market aggregate like the $12 billion. Also, if you want to talk about fraud rate, you need a denominator. A big sounding number by itself is meaningless.

adra 4y ago

You could use agnostics vs atheists as an analog here. Most effectively atheist individuals are most likely technically agnostic because they are open to receive new information in order to have their opinions on the matter changed. A hard Atheist would make their decision based on no evidence at all, and I think you'll find most atheists are at least open to be effectively sold on deism if it came out incontrovertibly (still waiting). All of this is the same with a crypto sceptic. I don't think you can assume crypto has to be a scam or more aptly a speculative investment scheme searching for a purpose. Some day, we could be convinced that crypto is super valuable for solving X, and the day it happens is the day I look to it with interest (still waiting).

lisper 4y ago
No, an atheist is one whose current Bayesian prior on the existence of God is close to zero. An agnostic is one whose current prior is close to 0.5. A theist's prior is close to one.
- MisterBastahrd 4y ago
  There are agnostic atheists and agnostic theists.
  - lisper 4y ago
    > agnostic atheists P ~= 0.3 > and agnostic theists P ~= 0.7
- s1artibartfast 4y ago
  That's not how I see it, but I think it raises the interesting question. What is the need or value in coming to a definitive conclusion on something when it doesn't impact your daily life or choices. My personal opinion and observation is that many people choose to take a stance on topics despite having no need to do so. I think they would be better served remaining agnostic on most topics despite their priors leaning one way or another.
  - 4y ago

SilasX 4y ago

>The author is arguing against skeptics who are "infinitely hostile" to crypto because it consists of "100% scams". I don't think many skeptics believe crypto is 100% scams This looks like the sanewashing[1] anti-pattern. Numerous comments say exactly this, every time it comes up. It's great that you personally have a nuanced opinion on the matter, but you should be careful about speaking for others, or saying what skeptics believe. From a quick search of HN of "all crypto scam", filtering out ones that aren't endorsing the view, or are throwaway accounts: https://news.ycombinator.com/item?id=33566892 https://news.ycombinator.com/item?id=33566892 https://news.ycombinator.com/item?id=31012827 https://news.ycombinator.com/item?id=31012827 https://news.ycombinator.com/item?id=33524215 https://news.ycombinator.com/item?id=33524215 https://news.ycombinator.com/item?id=33654880 https://news.ycombinator.com/item?id=33654880 [1] https://andrewaustin.blog/2022/02/14/sanewashing-its-more-widespread-than-you-might-think/ https://andrewaustin.blog/2022/02/14/sanewashing-its-more-wi...

darawk 4y ago

1) Large numbers of people on this site regularly argue that the entire conceptual foundation of crypto is fraudulent and/or without merit, not simply overstated. 2) I don't think he's arguing that everyone who thinks crypto is a scam is that sort of person, he was saying that most people who have been scammed are. 3) Molly White's number's agree with OP's. $12 billion vs a market cap of $858B is roughly the same percentage identified in the article. And before you complain about the use of market cap as denominator, market cap is also the numerator being used by Molly White's analysis, so it's the correct denominator.

kokanee 4y ago
This seems to be one of the better responses to my comment. Thanks. Some thoughts in reply: 1) People should be more hesitant to speak in absolutes. Unfortunately it’s possible that having a nuanced take is inversely correlated with the tendency to post noisy comments online. Maybe, regardless of the underlying stance of “most” skeptics, some more honest dialogue is warranted. Point conceded. 2. Hm. If that’s the case, the author’s assertion that most people who have been scammed are the kinds of people who fall for scams is fair, but not going to change many minds. 3. This is discussed ad nauseam below, so I’ll just add a reminder that we’re debating the author’s statement that “big crypto projects are very rarely scams” as evidenced by his google search. He goes on to say that “Crypto is a few hundred interesting projects, plus a long tail of thousands of scams.” So, most crypto projects are safe if you just ignore most crypto projects and only consider the most dominant. Realized losses vs unrealized market cap aside, the dynamics that incentivize that long tail of scams are worth worrying about in my view.
- darawk 4y ago
  Thanks, agree with 1 and 2. For 3, I think his statement as written "big crypto projects are very rarely scams" is clearly not literally true in a meaningful sense, and it's right to criticize him for that. However, I think a weaker statement like "The people that complain that crypto projects are scams are overstating how dense the space is with scams" is probably more accurate. It's sort of hard to determine how to weight an analysis of the density of scams in a space. Certainly if you weight by project count, it'll be quite high. If you weight by market cap, it'll be considerably lower. But to your actual point, I agree worrying about scams in crypto is very important, and I read the OP as (admittedly, somewhat carelessly) trying to argue against the view that "all" or "nearly all" crypto projects are scams. I think a better way to state it might be something like: Post dotcom bubble pop a lot of people were saying "those internet companies were all scams", and they were right in some kind of media-attention-weighted sense, and maybe even some other senses. But there were certainly a lot of real and important companies there, and even a lot of near-real-and-important companies that were just a little ahead of their time and didn't make it, and I don't think it's fair to dismiss most of them as scams. I'd definitely say crypto is still in the pre-making-it stage of its lifecycle, and it remains to be seen whether any of these projects will end up being say, the Google or Amazon of this space, that survives the winter and goes on to do meaningful things. However, even if they all die, I think it's fair to say that e.g. Ethereum and Bitcoin were sincere attempts at building novel technology.

lamontcg 4y ago

> 1) The author is arguing against skeptics who are "infinitely hostile" to crypto because it consists of "100% scams". I don't think many skeptics believe crypto is 100% scams. Most skeptics would say that the use cases are overstated and the incentives to pump-and-dump are so high that an unacceptable rate of scams was inevitable. If you're going to write an article to refute skeptics, refute the actual argument. The more aggressive skeptical argument is that cryptocurrencies can be looked at as a banking system with no government backstop at all, which are vulnerable to a systemic bank panic and run the system -- creating contagion effects that will ultimately knock down all the dominoes. Financial systems are all vulnerable to the fact that they are not stable systems and so they all need circuit breakers and need automatic measures in place to backstop the system in the event of a panic (critics of the argument that I'm making will point out that doesn't produce any certainty of stability, but they miss the point that those measures do make the system more stable). Without those, they'll definitely hit a systemic panic and will unravel sooner rather than later.