8 ms·

The real issue with all the pump and dump, fear of missing out, and all the other crazy “mooning” is that it is ruining this whole space. It is creating a reali

by wintom 9y ago

The real issue with all the pump and dump, fear of missing out, and all the other crazy “mooning” is that it is ruining this whole space. It is creating a reality that all the haters of cryptocurrency have been talking about for a while. Instead of focusing on building real applications with blockchain, programmable money, and changing the world everyone is focused on trading and get rich quick schemes. This stuff could change the world it is money ripped out of government hands and it could be baked into everything we do on the internet but I am not so sure that will happen anytime soon anymore. I am very jaded with the whole space because of all this fraud.

buttcoinslol 9y ago
What did you expect? Humans are greedy, full stop. Also, governments will give up power over currency when they lose their monopoly on violence.. so .. never.
- laretluval 9y ago
  The whole theory of cryptocurrency economics is based on the axiom that people are greedy. Do you really think people didn't realize this? The problem isn't that they didn't realize people are greedy, in fact they believe that more deeply than most. Rather their theories about what aggregate greediness would lead to were inaccurate at least in the short term.
  - deleted 9y ago
    [deleted]
Sangermaine 9y ago
>It is creating a reality that all the haters of cryptocurrency have been talking about for a while. Or you might have it backwards: it's reality crashing against the near-religious fantasies that crypto boosters held for ideological and other reasons.
- Waterluvian 9y ago
  Yeah it feels like a real-time experiment on the necessity of regulation and oversight.
  - CryptoPunk 9y ago
    On the contrary, it shows how the market responds and evolves on its own without top-down enforcement. These pump and dumps will eventually stop being effective, because in a situation where information flows freely, and there are no backstops or gatekeepers to protect investors from their own gullibility, natural selection and other bottom-up adaptive processes go to work. You can even see the growing 'immunity' that investors have to these pump-and-dump schemes on cryptocurrency forums. People on the forums are much quicker to see through attempts at coordinated pumps now than even a few months ago. Letting things play out results in a more robust configuration than trying to guide the market from the top-down through the creation of powerful gatekeepers and laws that rob people of their agency.
    - mschuster91 9y ago
      > These pump and dumps will eventually stop being effective, because the market will adapt. No, they will only stop when there are no more morons left to be milked.
      - CryptoPunk 9y ago
        That's one way in which the market adapts. Overprotecting children or investors is not in their long-term interest, or society's. Ultimately it comes down to whether you think top down processes are more effective, or bottom up ones. I personally know some older people who wanted to invest in Ripple. They talked to me about it and I made them promise not to do so, and to always check with me before investing in any cryptocurrency. That's a bottom up adaptation that makes a couple individuals safer. Sure the government could have just banned them from investing in Ripple, but that's a crude (and Big-Brother-ish) solution that's going to have untold numbers of unintended consequences. Our cognitive biases will prefer the top-down solution, because it's easier to reason about, but I would argue that reason and evidence tells us that bottom-up works better in the long run. A billion micro-adaptations are exponentially better than a couple macro ones. The world is far more complex/detailed than any regulatory agency can handle. ==I'm rate limited, so responding to Sangermaine's comment below after this point== >>What if, instead of these older people having to happen to personally know someone knowledgeable about crypto like yourself, or knowing how to find one and not get duped in some forum, there were regulations requiring public disclosure of various information regarding cryptocurrencies and their backers? You know, like we already have for securities? Then these older people could research this information and decide for themselves what to do, which seems to be what you advocate. You're looking at current regulatory restrictions through rose-colored glasses. The current law requires far more than just disclosure. It also requires having a certain number of 'market professionals' (as determined by the regulatory agency) vet the offering, and for the agency itself to vet it and give it approval before the issuer can offer it to anyone other than the rich (accredited investors). This inevitably leads to the cost of publicly offering a security to run into the millions of dollars. There are massively negative unintended consequences from raising the financial barrier to capital raising. Just because they're not directly felt, doesn't mean they aren't just as impactful as the more direct negative consequences that such a blanket restriction would ameliorate. Look, there are no perfect solutions. We have to think about this in terms of long-term impact, and trade-offs. The long-term result of preventing politicians from imposing laws that violate people's right to do with their own money what they wish, is the emergence of a relatively more vigilant investing public, that generally knows better that it has to do due diligence, and that through experience, some of it bitter, has developed relationships with individuals they can count on to help them with their investment decisions. The alternative is that we create a centralized gatekeeper and presumably that will stop more scams, but that also stops more opportunities. We would be taking away people's agency, and replacing the billions of decisions that the investing public would have collectively done, with the much smaller set that a regulatory agency does when making judgements on what people are permitted to invest in. >>"Allow everything" or "ban everything" aren't the only options, never have been, and in the real world aren't. I never suggested allowing everything. I think fraud should not be allowed. But I don't think we should preemptively ban everything that falls within some broad class of economic activity that has not gotten the approval of some gatekeeper.
malmsteen 9y ago
There's no "application" of blockchain. You'd be rather thanking thoses schemes because they are feeding the hype of what would be seems as a useless techno otherwise. I mean come on, anything can be done without it and using blockchain just bring unessential minor improvements like decentralization that no one cares about. Prove me wrong ...
- adamnemecek 9y ago
  It allows you to opt out of the monetary system that's been imposed on you by your govt. This might be less of a big deal if you live in a developed country but it's a big deal if you live in an unstable country.
  - empath75 9y ago
    Instead you can put your money into a pyramid scheme run by gangsters.
    - adamnemecek 9y ago
      Kinda like the banking system?
      - buttcoinslol 9y ago
        Better the devil you know. FDIC and SIPC instill a lot more confidence in me (and every single rational investor) than uh Bitfinex or Kraken.
        adamnemecek 9y ago
        Store it in an offline wallet.
  - troels 9y ago
    So does foreign currency
  - 9y ago
jahewson 9y ago
I’m afraid that reality has been around for a lot longer than cryptocurrency and it was quite obvious to a great many people that an unregulated global financial market was going to result in massive fraud. After all it’s a big enough problem in regulated markets! “Ripped out of the hands of government” means “ripped out of the hands of regulators” and history has taught us exactly what happens again and again in such situations.
paulsutter 9y ago
Yes it’s like the 1999 dotcom bubble but worse. Don’t worry though, soon it will be 2001. All the tourists will go home and the real work will continue. Bram Cohen: https://gist.github.com/FredericJacobs/1614f8eb741532c3f2cb https://gist.github.com/FredericJacobs/1614f8eb741532c3f2cb
- wsc981 9y ago
  Just today I discovered Bram Cohen is actually working on a new crypto-currency in a company [0] he has setup. It should be interesting to see if he can create a better crypto that doesn't have all problems that he currently sees in Bitcoin and others. He's currently looking for devs with good algorithmic skills to join his company. --- [0]: https://chia.network/ https://chia.network/
  - Nursie 9y ago
    Last I heard he was talking about proof of storage, which seems like it has the potential to do for hard drive prices what the others have done for graphics cards!
zitterbewegung 9y ago
The fraud will continue until we get more and more rules and regulation. I expect the governments will step in to regulate all of this. Once we have that we will have applications that work for the public . But I think the real innovation will be in private blockchain systems . The Hyperledger group has some exciting technology . Taking business problems you know and seeing if it will work will be really exciting. I recommend going through their free course https://courses.edx.org/courses/course-v1:LinuxFoundationX+LFS171x+3T2017/course/ https://courses.edx.org/courses/course-v1:LinuxFoundationX+L... Even if you aren’t interested in private blockchain technology it gives you what you need to understand. From there you could just read the white papers of bitcoin and Ethereum .
laretluval 9y ago
You want money to be baked into everything we do on the internet?
- tetrahedr0n 9y ago
  It already is. Today, the leading form of "money" used on the internet is your information to pay for your access to something. Facebook, google, instagram, etc etc.
bhouston 9y ago
> This stuff could change the world We are in the dot com bubble of cryptocurrency. Real tech that has been overtaken by hype, momentum investing, and well scammers. I expect a similar type of situation to play out. I feel like the non-existence USDT is going to be at the center of the coming crisis in cryptocurrency and I think that exchanges should face that head on, rather than letting it swallow them up. Exchanges should start to move away from USDT sooner rather than later.
malmsteen 9y ago
In addition to my first comment... : The western-like environment is also the direct consequence of the "no regulation" aspect that crypto fans like so much. When there start being regulation everyone will leave the space precisely because there's not the hope anymore of making quick fast money...
Theodores 9y ago
Many millions of people have sums of money from an inheritance or other windfall, this money sits in a bank and does not collect interest, even with low inflation it essentially depreciates. So along comes the crypto market and all of a sudden people are putting their savings in, hoping to make a quick buck on a rising market. They know it is a risk but they do it anyway. This choice of 'scam coins' over 'fiat' is part religious cult and people get caught up believing more than they can understand about the holy blockchain, however, it also reflects badly on mainstream banking and how broken that is. Really it has been broken for at least a generation in that interest rates are dysfunctional-low. Barely a day goes by without a scam coming to light that costs real USD, there is a ocean of difference between 'coin market value' and dollars of real money, but still this is lots of poor people losing their windfall savings. It can be a boyfriend or a brother that accesses the savings, so the purse strings are on that trust relationship. My top tip is to get into the divorce business as a lot of people are going to be arguing over 'where the bitcoin went'. They still probably won't be believing 'fiat' money is real so the carcasses left behind by the altcoin scammers should still be rich pickings for lawyers and estate agents. Right now I am trying to think of how I could use the all wonderful blockchain to help plant trees in the Northern Forest, with an app so people could sponsor a tree and have it all tied in to some fashionable blockchain thing. In this way, in fifty years time, the bits of poetry and dedications people have left for the trees will still work as there will be no central server needed. However, I don't quite see it. If I am to help plant five million trees by getting people to sponsor the things then the blockchain can wait. My clumsy database tables and the various joins will all be magic-beaned into blockchain sexy at another time, so the forest QR codes and AR poetry works in a decentralised way, for the next few millenia, right? So maybe I should just roll with it, work with a few altcoin scammers that know the gig is a joke and scam a few million people into buying coins 'backed with saplings' and have them feverishly land grab the whole of the North of England, desperate to plant an extra Rowan tree here or there. In that way, when it all goes tits up, there will be a forest happily growing away. Or maybe an 'alt-coin' forest could work? 'Bitcoin Pine', 'Bitcoin Oak', 'Bitcoin Ash' - imagine the fun trading in the futures market.
zerostar07 9y ago
Well good. If a cryptocoin is regulatable, its a failure. Let them be pumped and dumped until they re banned. It only brings the tech closer to what it has to be
whataretensors 9y ago
It's not exactly fraud in the same sense as someone stealing money. It's a game that people are playing - which the pump and dumpers can lose. A potential winning strategy is to wait until they tell you to buy and start selling.
- baxtr 9y ago
  That’s why they announce the coin right before the pump

by wintom 9y ago

buttcoinslol 9y ago

What did you expect? Humans are greedy, full stop. Also, governments will give up power over currency when they lose their monopoly on violence.. so .. never.

laretluval 9y ago
The whole theory of cryptocurrency economics is based on the axiom that people are greedy. Do you really think people didn't realize this? The problem isn't that they didn't realize people are greedy, in fact they believe that more deeply than most. Rather their theories about what aggregate greediness would lead to were inaccurate at least in the short term.
- deleted 9y ago
  [deleted]

Sangermaine 9y ago

>It is creating a reality that all the haters of cryptocurrency have been talking about for a while. Or you might have it backwards: it's reality crashing against the near-religious fantasies that crypto boosters held for ideological and other reasons.

Waterluvian 9y ago
Yeah it feels like a real-time experiment on the necessity of regulation and oversight.
- CryptoPunk 9y ago
  On the contrary, it shows how the market responds and evolves on its own without top-down enforcement. These pump and dumps will eventually stop being effective, because in a situation where information flows freely, and there are no backstops or gatekeepers to protect investors from their own gullibility, natural selection and other bottom-up adaptive processes go to work. You can even see the growing 'immunity' that investors have to these pump-and-dump schemes on cryptocurrency forums. People on the forums are much quicker to see through attempts at coordinated pumps now than even a few months ago. Letting things play out results in a more robust configuration than trying to guide the market from the top-down through the creation of powerful gatekeepers and laws that rob people of their agency.
  - mschuster91 9y ago
    > These pump and dumps will eventually stop being effective, because the market will adapt. No, they will only stop when there are no more morons left to be milked.
    - CryptoPunk 9y ago
      That's one way in which the market adapts. Overprotecting children or investors is not in their long-term interest, or society's. Ultimately it comes down to whether you think top down processes are more effective, or bottom up ones. I personally know some older people who wanted to invest in Ripple. They talked to me about it and I made them promise not to do so, and to always check with me before investing in any cryptocurrency. That's a bottom up adaptation that makes a couple individuals safer. Sure the government could have just banned them from investing in Ripple, but that's a crude (and Big-Brother-ish) solution that's going to have untold numbers of unintended consequences. Our cognitive biases will prefer the top-down solution, because it's easier to reason about, but I would argue that reason and evidence tells us that bottom-up works better in the long run. A billion micro-adaptations are exponentially better than a couple macro ones. The world is far more complex/detailed than any regulatory agency can handle. ==I'm rate limited, so responding to Sangermaine's comment below after this point== >>What if, instead of these older people having to happen to personally know someone knowledgeable about crypto like yourself, or knowing how to find one and not get duped in some forum, there were regulations requiring public disclosure of various information regarding cryptocurrencies and their backers? You know, like we already have for securities? Then these older people could research this information and decide for themselves what to do, which seems to be what you advocate. You're looking at current regulatory restrictions through rose-colored glasses. The current law requires far more than just disclosure. It also requires having a certain number of 'market professionals' (as determined by the regulatory agency) vet the offering, and for the agency itself to vet it and give it approval before the issuer can offer it to anyone other than the rich (accredited investors). This inevitably leads to the cost of publicly offering a security to run into the millions of dollars. There are massively negative unintended consequences from raising the financial barrier to capital raising. Just because they're not directly felt, doesn't mean they aren't just as impactful as the more direct negative consequences that such a blanket restriction would ameliorate. Look, there are no perfect solutions. We have to think about this in terms of long-term impact, and trade-offs. The long-term result of preventing politicians from imposing laws that violate people's right to do with their own money what they wish, is the emergence of a relatively more vigilant investing public, that generally knows better that it has to do due diligence, and that through experience, some of it bitter, has developed relationships with individuals they can count on to help them with their investment decisions. The alternative is that we create a centralized gatekeeper and presumably that will stop more scams, but that also stops more opportunities. We would be taking away people's agency, and replacing the billions of decisions that the investing public would have collectively done, with the much smaller set that a regulatory agency does when making judgements on what people are permitted to invest in. >>"Allow everything" or "ban everything" aren't the only options, never have been, and in the real world aren't. I never suggested allowing everything. I think fraud should not be allowed. But I don't think we should preemptively ban everything that falls within some broad class of economic activity that has not gotten the approval of some gatekeeper.

malmsteen 9y ago

There's no "application" of blockchain. You'd be rather thanking thoses schemes because they are feeding the hype of what would be seems as a useless techno otherwise. I mean come on, anything can be done without it and using blockchain just bring unessential minor improvements like decentralization that no one cares about. Prove me wrong ...

adamnemecek 9y ago
It allows you to opt out of the monetary system that's been imposed on you by your govt. This might be less of a big deal if you live in a developed country but it's a big deal if you live in an unstable country.
- empath75 9y ago
  Instead you can put your money into a pyramid scheme run by gangsters.
  - adamnemecek 9y ago
    Kinda like the banking system?
    - buttcoinslol 9y ago
      Better the devil you know. FDIC and SIPC instill a lot more confidence in me (and every single rational investor) than uh Bitfinex or Kraken.
      - adamnemecek 9y ago
        Store it in an offline wallet.
- troels 9y ago
  So does foreign currency
- 9y ago

jahewson 9y ago

I’m afraid that reality has been around for a lot longer than cryptocurrency and it was quite obvious to a great many people that an unregulated global financial market was going to result in massive fraud. After all it’s a big enough problem in regulated markets! “Ripped out of the hands of government” means “ripped out of the hands of regulators” and history has taught us exactly what happens again and again in such situations.

paulsutter 9y ago

Yes it’s like the 1999 dotcom bubble but worse. Don’t worry though, soon it will be 2001. All the tourists will go home and the real work will continue. Bram Cohen: https://gist.github.com/FredericJacobs/1614f8eb741532c3f2cb https://gist.github.com/FredericJacobs/1614f8eb741532c3f2cb

wsc981 9y ago
Just today I discovered Bram Cohen is actually working on a new crypto-currency in a company [0] he has setup. It should be interesting to see if he can create a better crypto that doesn't have all problems that he currently sees in Bitcoin and others. He's currently looking for devs with good algorithmic skills to join his company. --- [0]: https://chia.network/ https://chia.network/
- Nursie 9y ago
  Last I heard he was talking about proof of storage, which seems like it has the potential to do for hard drive prices what the others have done for graphics cards!

zitterbewegung 9y ago

The fraud will continue until we get more and more rules and regulation. I expect the governments will step in to regulate all of this. Once we have that we will have applications that work for the public . But I think the real innovation will be in private blockchain systems . The Hyperledger group has some exciting technology . Taking business problems you know and seeing if it will work will be really exciting. I recommend going through their free course https://courses.edx.org/courses/course-v1:LinuxFoundationX+LFS171x+3T2017/course/ https://courses.edx.org/courses/course-v1:LinuxFoundationX+L... Even if you aren’t interested in private blockchain technology it gives you what you need to understand. From there you could just read the white papers of bitcoin and Ethereum .

laretluval 9y ago

You want money to be baked into everything we do on the internet?

tetrahedr0n 9y ago
It already is. Today, the leading form of "money" used on the internet is your information to pay for your access to something. Facebook, google, instagram, etc etc.

bhouston 9y ago

> This stuff could change the world We are in the dot com bubble of cryptocurrency. Real tech that has been overtaken by hype, momentum investing, and well scammers. I expect a similar type of situation to play out. I feel like the non-existence USDT is going to be at the center of the coming crisis in cryptocurrency and I think that exchanges should face that head on, rather than letting it swallow them up. Exchanges should start to move away from USDT sooner rather than later.

malmsteen 9y ago

In addition to my first comment... : The western-like environment is also the direct consequence of the "no regulation" aspect that crypto fans like so much. When there start being regulation everyone will leave the space precisely because there's not the hope anymore of making quick fast money...

Theodores 9y ago

Many millions of people have sums of money from an inheritance or other windfall, this money sits in a bank and does not collect interest, even with low inflation it essentially depreciates. So along comes the crypto market and all of a sudden people are putting their savings in, hoping to make a quick buck on a rising market. They know it is a risk but they do it anyway. This choice of 'scam coins' over 'fiat' is part religious cult and people get caught up believing more than they can understand about the holy blockchain, however, it also reflects badly on mainstream banking and how broken that is. Really it has been broken for at least a generation in that interest rates are dysfunctional-low. Barely a day goes by without a scam coming to light that costs real USD, there is a ocean of difference between 'coin market value' and dollars of real money, but still this is lots of poor people losing their windfall savings. It can be a boyfriend or a brother that accesses the savings, so the purse strings are on that trust relationship. My top tip is to get into the divorce business as a lot of people are going to be arguing over 'where the bitcoin went'. They still probably won't be believing 'fiat' money is real so the carcasses left behind by the altcoin scammers should still be rich pickings for lawyers and estate agents. Right now I am trying to think of how I could use the all wonderful blockchain to help plant trees in the Northern Forest, with an app so people could sponsor a tree and have it all tied in to some fashionable blockchain thing. In this way, in fifty years time, the bits of poetry and dedications people have left for the trees will still work as there will be no central server needed. However, I don't quite see it. If I am to help plant five million trees by getting people to sponsor the things then the blockchain can wait. My clumsy database tables and the various joins will all be magic-beaned into blockchain sexy at another time, so the forest QR codes and AR poetry works in a decentralised way, for the next few millenia, right? So maybe I should just roll with it, work with a few altcoin scammers that know the gig is a joke and scam a few million people into buying coins 'backed with saplings' and have them feverishly land grab the whole of the North of England, desperate to plant an extra Rowan tree here or there. In that way, when it all goes tits up, there will be a forest happily growing away. Or maybe an 'alt-coin' forest could work? 'Bitcoin Pine', 'Bitcoin Oak', 'Bitcoin Ash' - imagine the fun trading in the futures market.

zerostar07 9y ago

Well good. If a cryptocoin is regulatable, its a failure. Let them be pumped and dumped until they re banned. It only brings the tech closer to what it has to be

whataretensors 9y ago

It's not exactly fraud in the same sense as someone stealing money. It's a game that people are playing - which the pump and dumpers can lose. A potential winning strategy is to wait until they tell you to buy and start selling.

baxtr 9y ago
That’s why they announce the coin right before the pump