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How is it a scam if the people buying it know exactly what they're buying, and the code is all open source? The word "scam" implies someone is being misled. Ho

How is it a scam if the people buying it know exactly what they're buying, and the code is all open source? The word "scam" implies someone is being misled. How is cryptocurrency any more of a scam than fiat currency, ie. digits in the computer of some private bank or central bank?

the_gastropod 3y ago
Cryptocurrencies are scams in much the same way MLM schemes are scams. Everyone knows what they’re buying into. But their expectations of outcomes are greatly skewed by the vested interests of existing participants.
- kylebenzle 3y ago
  No one with a brain or in a position of power has ever made a legitimate claim that Monero or Bitcoin Cash is a scam. Just empty attacks and idiots.
  - the_gastropod 3y ago
    Wow. Guess I’m out of my league here.
- AnthonyMouse 3y ago
  MLM schemes are a scam because the premise is that you'll make money, but there is no creation of value and the increase in value just comes from the increase in users. Once you saturate the market, the last people to get in are left holding the bag. They lose their money so someone else could get it. Cryptocurrencies increase in value as more people use them, but they don't fall to zero as a result of becoming widespread, because their sole value isn't for speculation. They can also be used as a currency. Now, some of these valuations have built into them the assumption that their use as a currency will ultimately become widespread, because otherwise they would be worth a lot less than they are. But less isn't the same as zero, and volatility doesn't matter if you are using it as a currency because then you're not holding enough of it for a long enough period of time to be exposed to a major change in value. With a MLM scam the value doesn't just have volatility, when you run out of suckers the value crashes to zero forever. With cryptocurrency the speculators can lose their shirts and at the end of the day you can still buy Bitcoin with cash and then use it to pay for a VPN.
  - the_gastropod 3y ago
    Avon, Amway, Vector, Mary Kay, etc have been fleecing suckers WAY longer than Bitcoin has existed. I don’t know where they your “MLM’s go to zero” idea is coming from. Sure, many MLMs go to zero. But so do many cryptocurrencies.
    - AnthonyMouse 3y ago
      Avon et al are the people at the top of the pyramid. They don't go out of business, they keep running the scam until they get arrested or run out of suckers. And P.T. Barnum said something about the latter. It's the suckers whose "investment" in one of these things goes to zero, which happens all the time. There are cryptocurrencies that go to zero, but there are also government currencies that go to zero. They go to zero when people stop using them as a currency, not when they become so widespread that you've saturated the market for suckers.
      - the_gastropod 3y ago
        Ah, I misunderstood. Touché, that is a fair distinction. It's hard to know how widespread leverage is used in crypto investments. One of the scary things about cryptocurrency investments is the lack of regulation, letting unsophisticated "investors" easily take on ludicrous amounts of risk. It's not uncommon to see 100x leverage offerings at crypto exchanges [1][2][3]. If used, it obviously can result in "investment goes to zero"—or worse—situations. [1] https://margex.com/ https://margex.com/ [2] https://app.covo.finance/ https://app.covo.finance/ [3] https://ascendex.com/en/products/trade/futures-trading https://ascendex.com/en/products/trade/futures-trading
        AnthonyMouse 3y ago
        I feel like people should be made aware of the risks and if they haven't misled you about what's at stake, you're an adult and you can place your bets. That isn't a scam, it's a gamble. It's the same as going to a brokerage and selling short, or buying a piece of land sight unseen. They are not allowed to lie to you. You are allowed to be an idiot and lose all your money.
ToucanLoucan 3y ago
> How is it a scam if the people buying it know exactly what they're buying, and the code is all open source? The word "scam" implies someone is being misled. This is astonishing mental gymnastics. Take the average crypto investor and ask them how the blockchain works. Not marketing fluff: the actual steps in pseudo-code for literally any step of the process. "The code is all there bro" is an astonishing amount of bad faith. Yeah, it is. Big deal. I've been a software developer for my entire adult life, but I don't work in cryptography, so I can't tell you a single damn thing about how blockchains work. The average investor in crypto, the influencers that peddle it, the whales that flooded the market with money? None of them understand it even slightly. I'd bet my life savings on it. > How is cryptocurrency any more of a scam than fiat currency, ie. digits in the computer of some private bank or central bank? A short, non-exhaustive list of differences: - Crypto has basically zero consumer protections and makes the implementing of them extremely difficult by it's nature - It is "anonymous" (actually pseudonymous) unless you are technically inclined enough to interact with the chain yourself, with your own software. "Normies" get to use platforms built by... somebody? Who maybe did it right? Probably. If they did it wrong though good luck getting your money back! - Complete lack of any oversight of any regulatory body, which is a selling point, up until there actually are those, which are the large miners, stakeholders and exchanges - Runaway deflation is not only a possibility, it is the goal of all of these projects, it's what "TO THE MOON!" means. They WANT that. After which and during their attempts to achieve it, the currency is useless as a currency because of the volatility in value. - The system has demonstrated multiple times that all the "ownership is truly yours" rhetoric is thrown out the window when the real monied investors in the background have their assets taken from them, in a way that is not against the rules, but no worries we'll just rewrite history for them because they're rich, they can't lose or this whole scheme falls apart
- kylebenzle 3y ago
  You have it oddly exactly backwards. I find that people that are not smart enough to understand Bitcoin generally respond by getting mad about Bitcoin or ignoring it. People that first understand it eventually find Monero and BCH and start investing everything they can afford. Of course idiots can be on both sides.
kylebenzle 3y ago
I find that people that are not smart enough to understand Bitcoin generally respond by getting mad about Bitcoin or ignoring it by calling it a scam.
- kemotep 3y ago
  Really? Only people who do not understand how bitcoin works do not like it and are just not smart enough? This comment being repeated half a dozen times does not make it true or productive to conversation.
- JSavageOne 3y ago
  It's funny because HN was initially supportive of Bitcoin when it first came out, but ever since it became popular has been vehemently against it. It's like the reverse of that famous HN post when Dropbox was announced and the top comment was that this probably won't work: https://news.ycombinator.com/item?id=8863 https://news.ycombinator.com/item?id=8863
jqpabc123 3y ago
How is it a scam if the people buying it know exactly what they're buying It's scam in that you're being enticed to mislead yourself. You're ignoring the obvious difference between "legal tender" and electrons. Most children understand that "monopoly money" isn't real "legal tender" --- but you don't? Those running the crypto "marketplace" don't suffer from these sort of delusions.
- JSavageOne 3y ago
  > It's scam in that you're being enticed to mislead yourself. That doesn't even make sense. > Most children understand that "monopoly money" isn't real "legal tender" --- but you don't? No one is claiming that cryptocurrencies are legal tender (outside of countries like El Salvador that made it so)
  - jqpabc123 3y ago
    That doesn't even make sense. Neither does surrendering "legal tender" for money that is not.
    - JSavageOne 3y ago
      People buy many things that aren't legal tender - money market funds, bonds, stocks, gold, etc.

the_gastropod 3y ago

Cryptocurrencies are scams in much the same way MLM schemes are scams. Everyone knows what they’re buying into. But their expectations of outcomes are greatly skewed by the vested interests of existing participants.

kylebenzle 3y ago
No one with a brain or in a position of power has ever made a legitimate claim that Monero or Bitcoin Cash is a scam. Just empty attacks and idiots.
- the_gastropod 3y ago
  Wow. Guess I’m out of my league here.
AnthonyMouse 3y ago
MLM schemes are a scam because the premise is that you'll make money, but there is no creation of value and the increase in value just comes from the increase in users. Once you saturate the market, the last people to get in are left holding the bag. They lose their money so someone else could get it. Cryptocurrencies increase in value as more people use them, but they don't fall to zero as a result of becoming widespread, because their sole value isn't for speculation. They can also be used as a currency. Now, some of these valuations have built into them the assumption that their use as a currency will ultimately become widespread, because otherwise they would be worth a lot less than they are. But less isn't the same as zero, and volatility doesn't matter if you are using it as a currency because then you're not holding enough of it for a long enough period of time to be exposed to a major change in value. With a MLM scam the value doesn't just have volatility, when you run out of suckers the value crashes to zero forever. With cryptocurrency the speculators can lose their shirts and at the end of the day you can still buy Bitcoin with cash and then use it to pay for a VPN.
- the_gastropod 3y ago
  Avon, Amway, Vector, Mary Kay, etc have been fleecing suckers WAY longer than Bitcoin has existed. I don’t know where they your “MLM’s go to zero” idea is coming from. Sure, many MLMs go to zero. But so do many cryptocurrencies.
  - AnthonyMouse 3y ago
    Avon et al are the people at the top of the pyramid. They don't go out of business, they keep running the scam until they get arrested or run out of suckers. And P.T. Barnum said something about the latter. It's the suckers whose "investment" in one of these things goes to zero, which happens all the time. There are cryptocurrencies that go to zero, but there are also government currencies that go to zero. They go to zero when people stop using them as a currency, not when they become so widespread that you've saturated the market for suckers.
    - the_gastropod 3y ago
      Ah, I misunderstood. Touché, that is a fair distinction. It's hard to know how widespread leverage is used in crypto investments. One of the scary things about cryptocurrency investments is the lack of regulation, letting unsophisticated "investors" easily take on ludicrous amounts of risk. It's not uncommon to see 100x leverage offerings at crypto exchanges [1][2][3]. If used, it obviously can result in "investment goes to zero"—or worse—situations. [1] https://margex.com/ https://margex.com/ [2] https://app.covo.finance/ https://app.covo.finance/ [3] https://ascendex.com/en/products/trade/futures-trading https://ascendex.com/en/products/trade/futures-trading
      - AnthonyMouse 3y ago
        I feel like people should be made aware of the risks and if they haven't misled you about what's at stake, you're an adult and you can place your bets. That isn't a scam, it's a gamble. It's the same as going to a brokerage and selling short, or buying a piece of land sight unseen. They are not allowed to lie to you. You are allowed to be an idiot and lose all your money.

ToucanLoucan 3y ago

> How is it a scam if the people buying it know exactly what they're buying, and the code is all open source? The word "scam" implies someone is being misled. This is astonishing mental gymnastics. Take the average crypto investor and ask them how the blockchain works. Not marketing fluff: the actual steps in pseudo-code for literally any step of the process. "The code is all there bro" is an astonishing amount of bad faith. Yeah, it is. Big deal. I've been a software developer for my entire adult life, but I don't work in cryptography, so I can't tell you a single damn thing about how blockchains work. The average investor in crypto, the influencers that peddle it, the whales that flooded the market with money? None of them understand it even slightly. I'd bet my life savings on it. > How is cryptocurrency any more of a scam than fiat currency, ie. digits in the computer of some private bank or central bank? A short, non-exhaustive list of differences: - Crypto has basically zero consumer protections and makes the implementing of them extremely difficult by it's nature - It is "anonymous" (actually pseudonymous) unless you are technically inclined enough to interact with the chain yourself, with your own software. "Normies" get to use platforms built by... somebody? Who maybe did it right? Probably. If they did it wrong though good luck getting your money back! - Complete lack of any oversight of any regulatory body, which is a selling point, up until there actually are those, which are the large miners, stakeholders and exchanges - Runaway deflation is not only a possibility, it is the goal of all of these projects, it's what "TO THE MOON!" means. They WANT that. After which and during their attempts to achieve it, the currency is useless as a currency because of the volatility in value. - The system has demonstrated multiple times that all the "ownership is truly yours" rhetoric is thrown out the window when the real monied investors in the background have their assets taken from them, in a way that is not against the rules, but no worries we'll just rewrite history for them because they're rich, they can't lose or this whole scheme falls apart

kylebenzle 3y ago
You have it oddly exactly backwards. I find that people that are not smart enough to understand Bitcoin generally respond by getting mad about Bitcoin or ignoring it. People that first understand it eventually find Monero and BCH and start investing everything they can afford. Of course idiots can be on both sides.

kylebenzle 3y ago

I find that people that are not smart enough to understand Bitcoin generally respond by getting mad about Bitcoin or ignoring it by calling it a scam.

kemotep 3y ago
Really? Only people who do not understand how bitcoin works do not like it and are just not smart enough? This comment being repeated half a dozen times does not make it true or productive to conversation.
JSavageOne 3y ago
It's funny because HN was initially supportive of Bitcoin when it first came out, but ever since it became popular has been vehemently against it. It's like the reverse of that famous HN post when Dropbox was announced and the top comment was that this probably won't work: https://news.ycombinator.com/item?id=8863 https://news.ycombinator.com/item?id=8863

jqpabc123 3y ago

How is it a scam if the people buying it know exactly what they're buying It's scam in that you're being enticed to mislead yourself. You're ignoring the obvious difference between "legal tender" and electrons. Most children understand that "monopoly money" isn't real "legal tender" --- but you don't? Those running the crypto "marketplace" don't suffer from these sort of delusions.

JSavageOne 3y ago
> It's scam in that you're being enticed to mislead yourself. That doesn't even make sense. > Most children understand that "monopoly money" isn't real "legal tender" --- but you don't? No one is claiming that cryptocurrencies are legal tender (outside of countries like El Salvador that made it so)
- jqpabc123 3y ago
  That doesn't even make sense. Neither does surrendering "legal tender" for money that is not.
  - JSavageOne 3y ago
    People buy many things that aren't legal tender - money market funds, bonds, stocks, gold, etc.