“Who is the other side of these trades?” is one of the most interesting and least covered stories in a mania.
More people invested in cryptocurrencies over the last year than in the preceding nine years according to many metrics. Most of them are unlikely to have warm feelings about the technology right now. Consider Kim Hyon-jeong. https://t.co/KKf0ncbGS3 pic.twitter.com/dwskWuBua1— Nathaniel Popper (@nathanielpopper) August 20, 2018
I have a feeling that techies of my acquaintance will feel uneasy about the notion that their lambo was bought by the victim of an investment scam. And one of the innovations of Bitcoin is that it creates a scam where every participant can semi-plausibly deny scamming.
The early adopter who sold their Bitcoins never talked to this woman. The US exchange never did either and had florid disclaimers about investment risks a few pixels below the place where they let you buy Bitcoins on a credit card. The Korean exchange had “regulatory uncertainty”
Now if you’ve actually followed this you know the industry is in fact crooked as a barrel of fish hooks and features *exactly* the same people (individuals and types) who usually run investment scams, including (I assume without fear of contradiction) in Korea, but it is deniable
In other news, Bitcoiners write letters to the SEC asking them to approve Bitcoin ETFs so that retail can purchase them in IRAs. That’s a literal thing. The person writing that letter wrote that this would improve prices. That person is the regulatory shock troop of a scam.
It is kind of amazing that you can create a codebase which births a memeplex which convinces uninvolved humans “I should advocate for this memeplex to the SEC.” That’s the core innovation of the Satoshi scam. We’ll be dealing with variants of it for a thousand years.
The scam rides on the same rails blazed by startups, having optimized out all value creation in favor of virulency. It learned the right words. It whispered them in the ears of the right people. It found its converts, some for love and some for money and some for the lulz.
It co-opted our networks, literal and metaphorical. It sifted through our skillsets and applied them, ruthlessly, to the problem of separating people from their money. It asked us to build it the instrumentalities of rapacious avarice and, God help us, we said yes.
There used to be a line in Silicon Valley "I have watched the smartest minds of my generation whisked off into the borg to optimize ad clicks." That line was intended (unfairly) to be blisteringly critical of Google and Facebook.
When people say "All the smartest developers in Silicon Valley right now are in crypto", they mean that *as praise.* (They're wrong about that, thank God, but they're far righter about crypto than any other scam vehicle, of which the world has many.)
And it wasn't just the one scam! No, it was iterated scams, onions of scams where you peeled back a layer and found another scam, scam generating factories, a cottage scam industry, an Internet-born memetic scamception. But it was scams.
There is an actual dollar (or yen, or won, or whatever) underlying all of the "money" in the below statement: The ICO industry (using that term lightly) has raised ~$15 billion dollars. Zero. *Zero.* That is how many actual, usable products have shipped.
Remember Cryptokitties? Cryptokitties is not just a joke; Cryptokitties got a lot of press coverage because it was the only thing running on the Ethereum network which was not either an explicit Ponzi scheme or an ICO. ICOs—investment scams—are Ethereum's killer app.
Was that accidental? No. Platforms don't accidental the top use case on their home page. (Ctrl-F for "Kickstart a project with a trustless crowdsale", which is the barest possible fig leaf over the Howey test.)