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Crypto currency
- MagicEmperor
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Crypto currency
Hello, just curious anyone here into crypto currency? If so which ones do you own/recommend buying. Seems like everyone is into this now. ![Mr. Green :mrgreen:](./images/smilies/icon_mrgreen.gif)
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- Kizyr
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Re: Crypto currency
Short answer: don't buy, it's entirely a grift.
I'll lay out the basic reasons to explain why it's a grift, since there's a lot of media/propaganda meant to get more people to buy into crypto since that's how the people already in the game make money off of newcomers (much like pyramid, multilevel marketing, or other schemes).
The most basic thing is this: there's a fundamental contradiction between using something as a currency and using it as an investment, and people trying to get you into crypto pretend like it's both.
For something to be useful as a currency (like dollars, pounds, yen, etc.) it needs to be generally accepted by a lot of people, and the value can't be volatile -- if, e.g., the coins you have are worth $10 today but could be worth $1000 next month, would you actually spend them or hold onto them 'til later? Would you expect anyone else to spend them or hold onto them to convert to a real currency later? This is why "crypto enthusiasts" don't talk about its use in paying for things, except in the theoretical sense -- they talk entirely about how much money you can get by investing, and that get-rich-off-crypto potential is what makes it useless as a currency.
Usually, someone trying to convince you to buy into crypto will talk about the get-rich-quick part and toss in some language about how it can totally be used as a currency (it can't be). Then they'll try to sound intelligent by throwing in buzzwords about the technology (blockchain and open-source software for mining) or basic concepts about money and banking, and if you're not convinced then act like you just must not understand.
To be clear, I'm a data scientist who works at a financial institution with a background in programming and economics... I understand both the tech and the money-and-banking aspect, and crypto enthusiasts almost universally know absolutely nothing about either the tech or the concept of money -- they've bought into the same propaganda, or are relying on other people being too intimidated to contradict them. Their tactic is to talk down to other people to get them to buy into the scam, because the more they maintain that fiction and the more people buy in, the higher value they can sell the cryptocurrencies they're holding onto other people before the bottom eventually falls out.
Granted, because we're a few years into this scam, there's a lot of people involved who fully believe their own propaganda. This is why so many people who are trying to get you into crypto sound like multi-level marketing sellers, talking about how you can earn $1000s/month just working from home and you can be your own boss, pointing to a few people who got rich as proof, etc.. It's also why there are so many bots now on Twitter and YouTube advertising crypto-trading (and now NFTs which use the same concept). So, well, treat it like any other get-rich-quick scheme and don't engage. (This also doesn't even get into how environmentally wasteful cryptocurrencies are -- the energy burn on mining and transactions basically eliminates the last decade of progress on wind/solar. The sooner they're done with as the scam they are, the better for everyone.)
I'll lay out the basic reasons to explain why it's a grift, since there's a lot of media/propaganda meant to get more people to buy into crypto since that's how the people already in the game make money off of newcomers (much like pyramid, multilevel marketing, or other schemes).
The most basic thing is this: there's a fundamental contradiction between using something as a currency and using it as an investment, and people trying to get you into crypto pretend like it's both.
For something to be useful as a currency (like dollars, pounds, yen, etc.) it needs to be generally accepted by a lot of people, and the value can't be volatile -- if, e.g., the coins you have are worth $10 today but could be worth $1000 next month, would you actually spend them or hold onto them 'til later? Would you expect anyone else to spend them or hold onto them to convert to a real currency later? This is why "crypto enthusiasts" don't talk about its use in paying for things, except in the theoretical sense -- they talk entirely about how much money you can get by investing, and that get-rich-off-crypto potential is what makes it useless as a currency.
Usually, someone trying to convince you to buy into crypto will talk about the get-rich-quick part and toss in some language about how it can totally be used as a currency (it can't be). Then they'll try to sound intelligent by throwing in buzzwords about the technology (blockchain and open-source software for mining) or basic concepts about money and banking, and if you're not convinced then act like you just must not understand.
To be clear, I'm a data scientist who works at a financial institution with a background in programming and economics... I understand both the tech and the money-and-banking aspect, and crypto enthusiasts almost universally know absolutely nothing about either the tech or the concept of money -- they've bought into the same propaganda, or are relying on other people being too intimidated to contradict them. Their tactic is to talk down to other people to get them to buy into the scam, because the more they maintain that fiction and the more people buy in, the higher value they can sell the cryptocurrencies they're holding onto other people before the bottom eventually falls out.
Granted, because we're a few years into this scam, there's a lot of people involved who fully believe their own propaganda. This is why so many people who are trying to get you into crypto sound like multi-level marketing sellers, talking about how you can earn $1000s/month just working from home and you can be your own boss, pointing to a few people who got rich as proof, etc.. It's also why there are so many bots now on Twitter and YouTube advertising crypto-trading (and now NFTs which use the same concept). So, well, treat it like any other get-rich-quick scheme and don't engage. (This also doesn't even get into how environmentally wasteful cryptocurrencies are -- the energy burn on mining and transactions basically eliminates the last decade of progress on wind/solar. The sooner they're done with as the scam they are, the better for everyone.)
~Kizyr (they|them)
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- Imperial Knight
- Black Dragon Wizard
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Re: Crypto currency
This Twitter thread is specifically about NFTs but does a good job of explaining how they function as a scam.
https://twitter.com/Foone/status/1457749433844568066
https://twitter.com/Foone/status/1457749433844568066
- Sonic#
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Re: Crypto currency
As a non-financial expert who knows a thing or two about rhetoric, the language around NFTs and cryptocurrency also sets off warning bells for me:
- The fact that ads exist to encourage you to buy cryptocurrency suggests they need to convince people to buy it to generate value, rather than it existing as an investment on its own merits. Kizyr mentions that it's marketed as both currency and investment. It also feels like a collectible or product. Do you really know what you're buying? Do they?
- The tech pitch is nebulous. It uses blockchain. How is that an advantage? As Kizyr points out, most people can't explain the technology, let alone how it correlates to value. That makes it a buzzword, a marketing term, poised to inspire trust through people's trust of technological competence. But this trust is uninformed if you don't understand the word and you can't trust that the seller understands it.
- It's volatile and plays on common perceptive fallacies. For every person you hear who bought into a cryptocurrency that gained value, there is someone else or many others who lost money. There is no good explanation for why value is gained or lost, except vague language like it got "hot" or someone famous tweeted about it. So the language around it is very much like gambling - it's high risk, unpredictable, and many people approach it with an inflated sense of confidence.
- In line with that, when anything is like gambling, one question should be, "Who owns the house?" The house always wins, after all. Another question should be, "What compels the house to play fair?" Stock exchanges and the like are governed by regulations; do you know the regulations around cryptocurrency? If one of the attractions of cryptocurrency is that it is unregulated and therefore seems like it could be outrageously profitable, then you need to also recognize that the lack of regulation also means you are unprotected from loss, social engineering, untrue promises, and other things.
Sonic#
"Than seyde Merlion, "Whethir lyke ye bettir the swerde othir the scawberde?" "I lyke bettir the swerde," seyde Arthure. "Ye ar the more unwyse, for the scawberde ys worth ten of the swerde; for whyles ye have the scawberde uppon you, ye shall lose no blood, be ye never so sore wounded. Therefore kepe well the scawberde allweyes with you." --- Le Morte Darthur, Sir Thomas Malory
"Just as you touch the energy of every life form you meet, so, too, will will their energy strengthen you. Fail to live up to your potential, and you will never win. " --- The Old Man at the End of Time
"Than seyde Merlion, "Whethir lyke ye bettir the swerde othir the scawberde?" "I lyke bettir the swerde," seyde Arthure. "Ye ar the more unwyse, for the scawberde ys worth ten of the swerde; for whyles ye have the scawberde uppon you, ye shall lose no blood, be ye never so sore wounded. Therefore kepe well the scawberde allweyes with you." --- Le Morte Darthur, Sir Thomas Malory
"Just as you touch the energy of every life form you meet, so, too, will will their energy strengthen you. Fail to live up to your potential, and you will never win. " --- The Old Man at the End of Time
- GhaleonOne
- Ghost From The Past
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Re: Crypto currency
As an artist who is selling more art than I make in my day job at this point, I will say NFTs have caught my eye for a while. I've never been interested in crypto whatsoever, but I personally know artists who have made over $100k off of NFTs. That said, it seems like so much work just to understand how all of it works, that I've stuck to selling my art in the physical format. I also feel like there is no real value in the NFT, at least coming from an artist. I don't see how a digital piece of art that's not even large in resolution in many cases can take the place of a physical piece of art you can hang in your home or office.
It's made for interesting reading over the past year trying to learn more about the concept, but also seems like a great way to lose a lot of money, and more importantly to me, lose a lot of valuable time trying to figure it out. Plus, I hate MLMs and pyramid schemes with a passion and it just seems shady in that way (like Kizyr said above).
It's made for interesting reading over the past year trying to learn more about the concept, but also seems like a great way to lose a lot of money, and more importantly to me, lose a lot of valuable time trying to figure it out. Plus, I hate MLMs and pyramid schemes with a passion and it just seems shady in that way (like Kizyr said above).
-G1
- Alunissage
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Re: Crypto currency
G1! How have you been? What art???
This is the thing that makes me SO MAD about the whole thing. Like we need ANOTHER way for people to mess up the world out of selfishness.(This also doesn't even get into how environmentally wasteful cryptocurrencies are -- the energy burn on mining and transactions basically eliminates the last decade of progress on wind/solar. The sooner they're done with as the scam they are, the better for everyone.)
- Kizyr
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Re: Crypto currency
Hey first, this article that's gotten shared a bit actually goes into the same things I was talking about earlier, though to much greater depth. It does use a lot of concepts in finance/money-and-banking and software, but it is accurate if you want to go way more in-depth: https://www.stephendiehl.com/blog/crypto-absurd.html
Now some specific responses...
Your instinct is also right. NFTs are a scam, even though some people are making money off them for the time being (or more accurately, they're complicit in a con to get money from other people willing to pay $100k for something that is in effect worthless).
They're not actually useful for artwork, even digital artwork. The claim that I hear from NFT-promoters is that it gives you control over your artwork -- which, well, is both (a) a lie, and (b) something better achieved by copyrights. It's a lie since the NFT is an arbitrary digital... thing (the "token")... that is said to represent the ownership of the artwork in question -- but really has no legal basis to do so (hence the lie part). And there's already something that is legally enforceable where it counts, which is the copyright system that's been in place and recognized by courts for a few centuries now (hence the something better via copyrights part).
Now some specific responses...
Fun thing about this: the "collectible" market is also rife with the same kind of speculation. Beanie babies in the 90s were never actually that valuable in-and-of-themselves (i.e., they weren't valuable because of the rarity), but because of speculation that gave the idea you could sell them to someone else for more if you just waited -- until the market busted. Retro video games now are in the same bind: about 5 years ago saw the creation of online markets to speculate in them, so while we were growing up rare video games cost a lot because of the rarity, and now there's an entire fictitious market mean to keep the price going up (very lengthy video here that goes into the details if you're curious: https://www.youtube.com/watch?v=rvLFEh7V18A).Sonic# wrote:The fact that ads exist to encourage you to buy cryptocurrency suggests they need to convince people to buy it to generate value, rather than it existing as an investment on its own merits. Kizyr mentions that it's marketed as both currency and investment. It also feels like a collectible or product. Do you really know what you're buying? Do they?
One thing that actually changed in the course of this whole discussion is that the IRS is going to start treating crypto-assets (cryptocurrencies and NFTs) as any other investment or currency -- which is throwing the crypto-market into a bit of an issue since they've been advocating that it's an investment and a currency but now can't deal with it being legally treated as such. Also, well, a lot of the more established trading companies ("banks" in a very loose sense of the word) are incorporated in common tax/legal havens like Bermuda, the Bahamas, and the Cayman Islands.Sonic# wrote:Stock exchanges and the like are governed by regulations; do you know the regulations around cryptocurrency? If one of the attractions of cryptocurrency is that it is unregulated and therefore seems like it could be outrageously profitable, then you need to also recognize that the lack of regulation also means you are unprotected from loss, social engineering, untrue promises, and other things.
I can't emphasize this enough: go with your instinct here and don't put money into something that makes no sense to you.GhaleonOne wrote:That said, it seems like so much work just to understand how all of it works, that I've stuck to selling my art in the physical format. I also feel like there is no real value in the NFT, at least coming from an artist. I don't see how a digital piece of art that's not even large in resolution in many cases can take the place of a physical piece of art you can hang in your home or office.
Your instinct is also right. NFTs are a scam, even though some people are making money off them for the time being (or more accurately, they're complicit in a con to get money from other people willing to pay $100k for something that is in effect worthless).
They're not actually useful for artwork, even digital artwork. The claim that I hear from NFT-promoters is that it gives you control over your artwork -- which, well, is both (a) a lie, and (b) something better achieved by copyrights. It's a lie since the NFT is an arbitrary digital... thing (the "token")... that is said to represent the ownership of the artwork in question -- but really has no legal basis to do so (hence the lie part). And there's already something that is legally enforceable where it counts, which is the copyright system that's been in place and recognized by courts for a few centuries now (hence the something better via copyrights part).
~Kizyr (they|them)
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- MagicEmperor
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Re: Crypto currency
I got a lot of friends into it. I just feel like it's definitely volatile. Few people tried to get me in but it's like I probably missed the train by now... Just a little odd the Staples Center sold naming rights to Crypto.com. Makes you think is crypto becoming something? Just wanted to get your thoughts on this. I appreciate all the information.
- Kizyr
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Re: Crypto currency
Yeah cryptocurrency/NFTs are becoming something, but it's a later stage in pyramid schemes of this scale -- you need increasing numbers of people to buy in to maintain the "base" of the pyramid. So that's why in the last 6 months we've seen way more advertising, and in the next year you'll probably see a lot of things like celebrity endorsements and celebrities in general promoting their own crypto-investments.
Definitely, definitely, do not feel like you "missed the train" because the train itself is not going anywhere good. Similar to pyramid schemes and MLMs, there are going to be a handful of very well-publicized success stories (especially people who got in early on the scam), but (a) there are a lot more people losing money who are either ignored or blamed for their own loss, and (b) the ones who do make money are literally making money off of scamming other people.
I have some sympathy for people who get roped in because they're using longstanding psychological tricks, similar to what cults (and MLMs) use, and tricks that none of us are completely immune to. But I have to draw a line when they start trying to rope more people into the scheme.
Actually there's an older thread where we discussed multilevel marketing schemes, and if you're curious you'll probably notice a lot of the same tricks in pay with crypto now:
https://www.lunarthreads.com/viewtopic.php?f=4&t=5806
Definitely, definitely, do not feel like you "missed the train" because the train itself is not going anywhere good. Similar to pyramid schemes and MLMs, there are going to be a handful of very well-publicized success stories (especially people who got in early on the scam), but (a) there are a lot more people losing money who are either ignored or blamed for their own loss, and (b) the ones who do make money are literally making money off of scamming other people.
I have some sympathy for people who get roped in because they're using longstanding psychological tricks, similar to what cults (and MLMs) use, and tricks that none of us are completely immune to. But I have to draw a line when they start trying to rope more people into the scheme.
Actually there's an older thread where we discussed multilevel marketing schemes, and if you're curious you'll probably notice a lot of the same tricks in pay with crypto now:
https://www.lunarthreads.com/viewtopic.php?f=4&t=5806
~Kizyr (they|them)
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Re: Crypto currency
I have to admit that I invested into crypto. I got out of it after I learned of the environmental impact, which I could have looked up at any time, but failed to do so..
I quit this fall, after about a year. I walked away up 80% from my initial investment. I'm not talking about a small $500 investment either. It was a large amount of money. Enough to make me pull the trigger on a move to Japan next year.
Seeing it being implemented by Visa, Mastercard, PayPal, gift cards, and hearing of billionaires like Bill Miller putting 50% of their assets into it, make me believe it's going to be here a while. I'm not saying I'm happy about it. It just doesn't seem to be in a precarious position, currently.
I quit this fall, after about a year. I walked away up 80% from my initial investment. I'm not talking about a small $500 investment either. It was a large amount of money. Enough to make me pull the trigger on a move to Japan next year.
Seeing it being implemented by Visa, Mastercard, PayPal, gift cards, and hearing of billionaires like Bill Miller putting 50% of their assets into it, make me believe it's going to be here a while. I'm not saying I'm happy about it. It just doesn't seem to be in a precarious position, currently.
- MagicEmperor
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Re: Crypto currency
The fact that Mastercard, VISA, PAYPAL, even Robinhood support it is very odd to me. If it wasn't going anywhere why would all these companies adapt it? It deff seems like a Pyramid Scheme but just so hard to wrap my head around it.
- Sonic#
- Pao Tribe Chieftain
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Re: Crypto currency
That's great, WD. I'm glad you're able to pursue moving to Japan.
I do agree it's hard to know what to think of Mastercard and other entities supporting cryptocurrency.
Popularity is a really hard thing to gauge. Its popularity could also be evidence of a bubble, a little like subprime mortgage lending was supported by major banks and institutions in the mid-00s. Or it could be like investors and media buying into a company like Theranos, here one day and gone thenext. Or it could be rather like the lottery - yes, it sticks around for a while, and some people profit, but only by the big players extracting more value from it and enough people with a good story to tempt more people to buy in.The fact that Mastercard, VISA, PAYPAL, even Robinhood support it is very odd to me. If it wasn't going anywhere why would all these companies adapt it? It deff seems like a Pyramid Scheme but just so hard to wrap my head around it.
I do agree it's hard to know what to think of Mastercard and other entities supporting cryptocurrency.
Sonic#
"Than seyde Merlion, "Whethir lyke ye bettir the swerde othir the scawberde?" "I lyke bettir the swerde," seyde Arthure. "Ye ar the more unwyse, for the scawberde ys worth ten of the swerde; for whyles ye have the scawberde uppon you, ye shall lose no blood, be ye never so sore wounded. Therefore kepe well the scawberde allweyes with you." --- Le Morte Darthur, Sir Thomas Malory
"Just as you touch the energy of every life form you meet, so, too, will will their energy strengthen you. Fail to live up to your potential, and you will never win. " --- The Old Man at the End of Time
"Than seyde Merlion, "Whethir lyke ye bettir the swerde othir the scawberde?" "I lyke bettir the swerde," seyde Arthure. "Ye ar the more unwyse, for the scawberde ys worth ten of the swerde; for whyles ye have the scawberde uppon you, ye shall lose no blood, be ye never so sore wounded. Therefore kepe well the scawberde allweyes with you." --- Le Morte Darthur, Sir Thomas Malory
"Just as you touch the energy of every life form you meet, so, too, will will their energy strengthen you. Fail to live up to your potential, and you will never win. " --- The Old Man at the End of Time
- Kizyr
- Keeper of Knowledge (probationary)
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Re: Crypto currency
Ok so a lot's happened lately. I want to say that I'm gonna address these things in a medium-length post here:
What's worse, if you go to forums full of "crypto enthusiasts", you and everyone else would be blamed for the loss, and then they would turn around and talk about "buying the dip" to convince you to put even more money ("buying the dip" refers to buying on a low period with the assumption that it will go up by the time you sell it -- which basically leaves unsaid that it assumes you can tell the future, which is why this rhetorical trick is so pervasive whenever someone tries to con you into an "investment opportunity").
So I reprise the very first few words I said: don't buy, it's entirely a grift. You're far more likely to lose money, and the great majority of people who lose out are sort of shunned out of popularity to point to the few winners as evidence that "you too can get rich quick!". As this scam goes on, the disparity will only get greater.
Ok, so now what I was going to get to...
Getting into/out of cryptocurrency
And, well, there are a few people who are winners. Just like a lottery, or scams in the past -- penny stocks, pump-and-dump schemes, pyramid schemes, MLMs, all have people higher up on the pyramid who cash out, since others can point to them as signs that "you too can get rich quick!" ("and if you don't it's your own fault").
For anyone who is already invested, all I can suggest is to cash out now. What happens is either you lose out (more likely), or (less likely) you turn a little profit on the backs of other people who do lose out on something they were sold as a golden investment. But demonizing people who have invested usually serves to get them to dig their heels in and rationalize the con.
Why big companies like Visa/Paypal are getting into it (which is misleading)
First, simply, there are a lot of bad decisions made at these companies. Decision-makers are still human, and still fall for tricks like being overwhelmed with jargon and not wanting to look foolish ("blockchain!", "this is the tech of the future!"), and thinking they can profit if they get in on this early (or "on the dip"). Sometimes it's just plain greed that proves stronger than anything else.
Collateralized debt obligations (CDOs), which were the way that bad mortgages were packaged together to obscure their risk, and which contributed the most to the 2008 financial crisis, had a similar run. Everyone was investing in them and everyone was convincing themselves and others that they were good ideas -- despite plenty of people at the time pointing out all their flaws. CDOs seemed to be everywhere, until they weren't.
That respectable-looking companies are getting in on this is literally a way that people shilling cryptocurrency are trying to expand the scam, by looking more reputable than they are by piggybacking off of others' reputation.
But I said that it's misleading. Why?
Visa/Mastercard aren't exactly "backing" cryptocurrency. The logo on your credit card covers the network that it's on -- but the company that issues your credit card is going to be something like Citibank, Chase, Bank of America, CapitalOne, etc. (not Visa or Mastercard -- note, Discover and American Express are different). And none of those major financial institutions that issue credit cards are actually investing in cryptocurrency -- it's ones like crypto.com that are able to get a Visa logo on their card. And, well, crypto.com (as the issuer) is taking on the risk, not Visa itself.
(This is really esoteric btw. I hope I explained it well.)
PayPal and Robinhood are organized like silicon valley tech companies and... make bad decisions accordingly. There isn't a great way to sugarcoat it, but their business model shoves a lot of risk onto their users (PayPal) or the venture capitalists backing them (Robinhood), so they likely figure they may as well cash in on any trend no matter how scammy.
How even obvious scams can linger for a long time
There's just... y'all, there's so much BS that goes on in these industries. Just like 15 years ago with CDOs, there's a lot of people convincing one another that they're sound investments and using tricks to obscure the risk, launder the reputation, paint the critics as "behind the times" or "they just don't understand".
This business of using legitimate-looking companies and celebrity endorsements is part of this. I mean the encouraging thing is that it's also being ridiculously mocked (which discourages new entrants who might otherwise be suckered in, although I'm not sure if it's causing anyone who's invested who might be considering cashing out to dig in their heels instead).
But even pyramid schemes can last a while with this respectible veneer if enough people behind it are connected: Bernie Madoff's famous ponzi scheme lasted over 15 years. Theranos managed to deceive investors for about 3-4 years. Uber still loses money and is able to stay in business because of consistent investor funding while they try to monopolize markets -- meaning that they stay in business because they can convince people that turning a profit is juuuust around the corner.
Other resources
Literally a few days ago, FoldableHuman (Dan Olsen) released a fantastic if lengthy video on this entire subject. He says a lot of what I've been trying to explain, although his explanations I find much clearer and more approachable, while still being highly accurate. And there is so much new that I learned fro this video.
I really encourage folks to take some time and watch it, even if you have to split it up over a few days. I really hope more folks feel encouraged by this to not be taken in by cryptocurrency "enthusiasts" trying the whole "oh you just don't understand" tactic -- because I can tell you that 100% of the "enthusiasts" do not understand fundamental things about how money works, and often even how the tech works: https://www.youtube.com/watch?v=YQ_xWvX1n9g
- Getting "into" / "out of" cryptocurrency
- Why big companies like Visa/Paypal are getting into it (which is misleading)
- How even obvious scams can linger for a long time
- Other resources
What's worse, if you go to forums full of "crypto enthusiasts", you and everyone else would be blamed for the loss, and then they would turn around and talk about "buying the dip" to convince you to put even more money ("buying the dip" refers to buying on a low period with the assumption that it will go up by the time you sell it -- which basically leaves unsaid that it assumes you can tell the future, which is why this rhetorical trick is so pervasive whenever someone tries to con you into an "investment opportunity").
So I reprise the very first few words I said: don't buy, it's entirely a grift. You're far more likely to lose money, and the great majority of people who lose out are sort of shunned out of popularity to point to the few winners as evidence that "you too can get rich quick!". As this scam goes on, the disparity will only get greater.
Ok, so now what I was going to get to...
Getting into/out of cryptocurrency
Even though I am actively exposing how much of a scam cryptoshit (broadly referring to cryptocurrency and NFTs) is, my anger is directed at people trying to sell others on it, not on people who have or are considering investing/buying cryptoshit. In other words, on anyone trying to perpetuate the con, not on people who have been caught in it.
And, well, there are a few people who are winners. Just like a lottery, or scams in the past -- penny stocks, pump-and-dump schemes, pyramid schemes, MLMs, all have people higher up on the pyramid who cash out, since others can point to them as signs that "you too can get rich quick!" ("and if you don't it's your own fault").
For anyone who is already invested, all I can suggest is to cash out now. What happens is either you lose out (more likely), or (less likely) you turn a little profit on the backs of other people who do lose out on something they were sold as a golden investment. But demonizing people who have invested usually serves to get them to dig their heels in and rationalize the con.
Why big companies like Visa/Paypal are getting into it (which is misleading)
WD RPG WD wrote: ↑Sat Jan 15, 2022 6:51 pmSeeing it being implemented by Visa, Mastercard, PayPal, gift cards, and hearing of billionaires like Bill Miller putting 50% of their assets into it, make me believe it's going to be here a while. I'm not saying I'm happy about it. It just doesn't seem to be in a precarious position, currently.
To start, I'm coming at this as someone who's in the financial industry and has an econ/finance and tech background. There's some good explanations for what you're seeing.MagicEmperor wrote: ↑Sat Jan 15, 2022 7:41 pmThe fact that Mastercard, VISA, PAYPAL, even Robinhood support it is very odd to me. If it wasn't going anywhere why would all these companies adapt it? It deff seems like a Pyramid Scheme but just so hard to wrap my head around it.
First, simply, there are a lot of bad decisions made at these companies. Decision-makers are still human, and still fall for tricks like being overwhelmed with jargon and not wanting to look foolish ("blockchain!", "this is the tech of the future!"), and thinking they can profit if they get in on this early (or "on the dip"). Sometimes it's just plain greed that proves stronger than anything else.
Collateralized debt obligations (CDOs), which were the way that bad mortgages were packaged together to obscure their risk, and which contributed the most to the 2008 financial crisis, had a similar run. Everyone was investing in them and everyone was convincing themselves and others that they were good ideas -- despite plenty of people at the time pointing out all their flaws. CDOs seemed to be everywhere, until they weren't.
That respectable-looking companies are getting in on this is literally a way that people shilling cryptocurrency are trying to expand the scam, by looking more reputable than they are by piggybacking off of others' reputation.
But I said that it's misleading. Why?
Visa/Mastercard aren't exactly "backing" cryptocurrency. The logo on your credit card covers the network that it's on -- but the company that issues your credit card is going to be something like Citibank, Chase, Bank of America, CapitalOne, etc. (not Visa or Mastercard -- note, Discover and American Express are different). And none of those major financial institutions that issue credit cards are actually investing in cryptocurrency -- it's ones like crypto.com that are able to get a Visa logo on their card. And, well, crypto.com (as the issuer) is taking on the risk, not Visa itself.
(This is really esoteric btw. I hope I explained it well.)
PayPal and Robinhood are organized like silicon valley tech companies and... make bad decisions accordingly. There isn't a great way to sugarcoat it, but their business model shoves a lot of risk onto their users (PayPal) or the venture capitalists backing them (Robinhood), so they likely figure they may as well cash in on any trend no matter how scammy.
How even obvious scams can linger for a long time
There's just... y'all, there's so much BS that goes on in these industries. Just like 15 years ago with CDOs, there's a lot of people convincing one another that they're sound investments and using tricks to obscure the risk, launder the reputation, paint the critics as "behind the times" or "they just don't understand".
This business of using legitimate-looking companies and celebrity endorsements is part of this. I mean the encouraging thing is that it's also being ridiculously mocked (which discourages new entrants who might otherwise be suckered in, although I'm not sure if it's causing anyone who's invested who might be considering cashing out to dig in their heels instead).
But even pyramid schemes can last a while with this respectible veneer if enough people behind it are connected: Bernie Madoff's famous ponzi scheme lasted over 15 years. Theranos managed to deceive investors for about 3-4 years. Uber still loses money and is able to stay in business because of consistent investor funding while they try to monopolize markets -- meaning that they stay in business because they can convince people that turning a profit is juuuust around the corner.
Other resources
Literally a few days ago, FoldableHuman (Dan Olsen) released a fantastic if lengthy video on this entire subject. He says a lot of what I've been trying to explain, although his explanations I find much clearer and more approachable, while still being highly accurate. And there is so much new that I learned fro this video.
I really encourage folks to take some time and watch it, even if you have to split it up over a few days. I really hope more folks feel encouraged by this to not be taken in by cryptocurrency "enthusiasts" trying the whole "oh you just don't understand" tactic -- because I can tell you that 100% of the "enthusiasts" do not understand fundamental things about how money works, and often even how the tech works: https://www.youtube.com/watch?v=YQ_xWvX1n9g
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Re: Crypto currency
Kiz, I took notes on this. Just wanted to let you know, since you went through all that trouble to write this up for us. Thanks.
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Re: Crypto currency
My opinion on it is if it helps you at your current spot in life then do it. If you're against it then don't it. But i can't speak for everyone and their backgrounds. Sometimes your computer can mine for money depending on how powerful it is and you can earn money through that. My partner does it and it hasn't take any time of his. He puts it on when he goes to bed and within a couple months we have roughly 40 dollars are so depending on where bit coin is at. It's helped us in quite a few situations.
Conclusion as with what i introduced. If it helps you, do it. If you feel it isn't your thing. Don't. You don't need anyone's dismissal or approval when it comes to bills and financial stability
Conclusion as with what i introduced. If it helps you, do it. If you feel it isn't your thing. Don't. You don't need anyone's dismissal or approval when it comes to bills and financial stability
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Re: Crypto currency
Welp I said there are bots on Twitter and YouTube trying to get people to buy into cryptocurrency, add to that old internet forums because this gem of a bot just showed up in the filter:
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Re: Crypto currency
I was rewatching scenes from the so-bad-it's-good live action Street Fighter movie (except Raul Julia as M. Bison, who was actually good), and I realized: Bison dollars were a proto-Cryptocurrency:
I'm pretty sure economics doesn't work like how Bison describes lol. As for actual Crypto, I'll pass mainly due to environmental concerns.
I'm pretty sure economics doesn't work like how Bison describes lol. As for actual Crypto, I'll pass mainly due to environmental concerns.
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Re: Crypto currency
To be fair, M. Bison's plan to kidnap the Queen was at least more honest. And like, he actually wants to use it as a currency and not a speculative investment while lying about its use as a currency.
Because the bottom of the market mostly fell out, you're not hearing about it as much as before (and the NFT market -- which was necessary to expand the market for cryptocurrency -- pretty much collapsed). There're some hangers-on who because of sunk-cost fallacy can't admit it, and a fast-shrinking number of people still conning others and making money that way, but I hope anyone reading this has already gotten out.
Because the bottom of the market mostly fell out, you're not hearing about it as much as before (and the NFT market -- which was necessary to expand the market for cryptocurrency -- pretty much collapsed). There're some hangers-on who because of sunk-cost fallacy can't admit it, and a fast-shrinking number of people still conning others and making money that way, but I hope anyone reading this has already gotten out.
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Re: Crypto currency
^ Related to the bottom dropping out, has anyone seen crypto kiosks showing up in gas stations? I haven't looked more closely, but I found it pretty odd I'd be noticing them as the market deflates. Is that just sampling error on my part (they were already there and I didn't see them), or is someone pushing to shore up a base of naive investors? (Or, I guess, maybe both?)
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Re: Crypto currency
I haven't seen many new ones go up, but did see plenty during the 2020-2021 bubble. My guess is that most of them were already there, just they're more highlighted now (it's no cost really to make sure they show up on Google Maps, e.g.) to pull more people in. But it's not impossible that there's some source of very deep pockets (rolling out "ATMs" is really expensive) trying to pursue this as a branding strategy -- it's a terrible move that won't recoup the cost, but as I noted in an earlier thread a lot of the people backing crypto aren't known for making sound business decisions.
I'll keep an eye out if anything's changed lately.
I'll keep an eye out if anything's changed lately.
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