I put this under "the heart wants what it wants." It doesn't bother me that people want to explore crypto. People do a lot of stupid stuff. And, of course, many say bitcoin is stupid, but I really can't figure it out one way or another, so I say let them experiment.
Unfortunately the people experimenting now include institutional investors, like pension funds, so we’re all increasingly exposed whether we want to be or not.
If I knew it was definitely bad and wrong to be exposed than I'd object. But I don't know that. It's out of my league, and I'm hoping pension fund administrators know more than I do. Option markets are argued to be badly designed by Nassim Taleb, who made a fortune betting against them in the 2008 crash, and yet they are a huge part our of finance system. Again, out of my league, so I can't say with certainty that one thing is good and the other is bad when I have no idea.
I don’t disagree with this take, and professionally I’m around a lot of tech people who invest in crypto knowing full-well the risks. I don’t quite understand it myself, but then, some people enjoy skydiving and I don’t get that either.
My concern is that for normal people who have neither the time nor the savvy to do a risk-reward analysis on crypto investment, all of this is incredibly opaque, and crypto might end up looking as reasonable an investment strategy as stocks or bonds. Which, it isn’t, but the crypto industry (and existing backers) have every interest in making it appear so. And then people lose their life savings. Not great!
I understand your concern. Of course there are things we should try to control like Fentanyl. That is where I'd make my stand, and I think FdB would basically agree, he just may be a bit more on the regulation side than I am. Complaints about carnival barking opportunists aren't enough to convince me to bring in regulation. I'd need some sort of technical reasoning as well, and on that front no one has given me a good answer. Most complaints on the "technical" side are it's new and weird so it must be bad.
When it's so confusing that no one can figure it out...like the process of mortgage backed securities, debt obligation bonds and credit default swaps...that's where the dangerous, dirty stuff happens.
I get the sense that people enjoy being part of the crypto community because it feels like an underground “movement” that requires some street smarts to participate in. Laughing at people who do it wrong is part of the in-group bonding experience. L
That sense of belonging is an important component of what keeps the whole thing rolling through the ups and downs: there’s a core of true believers who have made crypto a part of their identity so can never afford to give up.
Doesn't hurt that there are people who have made unreal sums of money in crypto. I suspect most of the "land rush" fortunes have already been made, though, and each of these new launches are literally speculation machines where a few suckers buy it because it tickles some touchstone for them, and a whole bunch of others buy trying to guess at which coin will have the most suckers so they can ride it up for a few (weeks? days? hours? minutes?) then make a quick profit by dumping it.
I worry that Trump, Musk and the rest are legitimizing these Ponzi schemes. I worry it will grow large enough to jeopardize the real economy. That's what happened in the early 2000s. The banks with their mortgage backed securities Ponzi schemes really rocked things for years.
But this is the point I always make, right - conversatives want to win but they don't want to actually rule. They're much, much happier being on the outside flinging rocks.
I don't really follow either. Maybe he means that conservatives (which I guess he thinks all the crypto folks are?) want to "win" (i.e., make money off those they judge suckers), but are unwilling to "rule" (make regulations to make these kinds of markets "work"?), and then throw rocks at the suckers?
The idea doesn't make sense though. The ones who want to win explicitly don't want to rule. They want to win. They don't want anyone interfering in their shark tank. But I think he's confusing conservatives with libertarians (or perhaps conservatives with Republicans, who are no longer conservative).
Although I am not sure how FdB's comment follows, I think he's right. Conservatives want to be in charge, but they have zero interest in governing, and haven't for probably thirty years. They have no policy ideas, no solutions, and no initiatives except "lower taxes." Well, they want to deport illegal immigrants, but they don't really do much of that except a bit here and there in a showy way.
Sad to say, the GOP is really just an ambition vehicle for Donald Trump. Maybe that will change once Trump finally leaves the stage, I coudn't say.
I think Bistromathtician explained Freddie deBoer's comments.
As for Republican policy ideas, *until* Trump, Republicans' policy ideas were first a bit Reaganite (e.g., Contract with America). You can say they govern badly, or have bad ideas, but those were real policy proposals, real governance. It was not merely throwing rocks from the outside.
The Tea Partiers were a bit different. Their goals were more nakedly libertarian and less about specifics of governing than they were in attempting to disassemble various parts of the system which they viewed as corrupt.
Then there's Trump: where there are policy ideas, but they cohere only in that they are the policy ideas that Trump likes at the moment, that Maga Republicans respond to emotionally. Many of those ideas do amount to throwing rocks at the establishment. And in fairness, this is a democracy, and that appears to be what quite a few of our citizens would like him to do.
Crypto people get "inspired" by being part of a world-changing movement that will undo the financial system, but when it comes to actually acting like a replacement to the financial system, they are fundamentally unserious about the abuse they perpetuate. This is analogous to Republicans complaining about all the things the government does wrong, and then when they get power, doing nothing to fix the problems (and often actually making things worse).
There's more than one type of crypto person. Some are indeed into it for the "lost faith in fiat currencies" or whatever idiocy they claim crypto will save us from. Some are simply predators, interested in taking whatever they can from whomever they can as much as they can, and love the almost total lack of regulations around crypto. It's a game and they want to win. And many see it as a kind of diversification, or a hedge, or a speculation with a high risk, but potential high reward.
"when it comes to actually acting like a replacement to the financial system, they are fundamentally unserious about the abuse they perpetuate"
Who's "they"? It's easy to cherry-pick bad actors and ignore the positive when one's set to keep one's mind closed. To name names, why don't you read up on, say, what SEC chair Gary Gensler has done to companies like Coinbase as well as specific blockchains working to establish legitimacy. It is screamingly obvious that for obvious reasons crypto has powerful enemies that have no interest the general welfare.
Yep, it's been "we'll show the normies" since the days of home-mining. Adding in the possibility of making money AND owning the normies? They get to play gentleman bastard without having to actually learn any tradecraft.
Think of crypto as a vote of "no confidence" in the current financial system, much like gold is a put option against financial collapse.
I find Patrick Boyle insightful in many things, but in his criticism of crypto , he does not get or does not want to get how more and more humans see the existing financial system as rigged against them, and are seething with white hot incandescent rage as a result.
If you want to know what elected Trump, that is why.
To me what gives away the lie at the heart of crypto are things like the legislation recently proposed to have the US government buy and hold $100 billion in crypto value––under the laughable pretense that it will be a first step in reducing the national debt. (How exactly does the US pay down debt with crypto?)
A scheme like that––very likely to go through if the Trump administration pushes hard enough––not only contradicts the whole libertarian premise that crypto breaks with the state; it empties the stable, state-backed reserves of the US into the pockets of crypto moguls who own vast amounts of speculative value in coins that have yet to prove they have any meaningful public use.
In many ways, being wrong but wrong in a way that is right about the way everyone else will behave when the perception is that we are coming up to the edge of collapse is still good. As long as things don't *actually* crash, it can be an effective hedge. It's one of those dangerous areas where it will look like you were right all the way until you fly over the cliff.
It's not a hedge against the stock market, I don't think. It seems like it would be a hedge against currency failures / banking failures, but I am not knowledgeable enough to say if that's really true.
The Economist had an interesting article on gold. A lot of states/countries are buying gold reserves because it can be used to work around sanctions and it's value tends to hold if things world-wide totally go pear-shaped. The end of the article/podcast was that it might work for states and billionaires, but the run of the mill COSTCO shopper was going to lose their gold to the guy who stockpiled assault weapons.
There's a thread of desperation. More and more people are isolated from the system that doesn't seem to be run by or for any of us. See also sovereign citizens and AI accelerationists.
Interesting that this column follows the previous column about inane online cultures of lefty fandom. Crypto strikes me as an industry dominated by an online culture that skews right and male. In broad strokes, it fosters an ethos that is well analyzed here by DeBoer: it wants both public respectability for the currency but revels in the misfortune of people who get ripped off.
There is an indirect way that you could link that ethos to conservative or libertarian politics, e.g. a political view that it is right and just for individuals to either flourish or fail on the basis of their own smarts and efforts alone. But does that mean that libertarian political thought is inherently responsible for the dumbest crypto bro assertions on X? Is Robert Nozick et al responsible for trying to police the smarmiest taunting memes or even trying to address the inherent contradictions of the industry?
In other words, how far can we hold political movements responsible for the pathologies that flourish in social media? Or does it make more sense to say that much of the debased or nutty stuff that flourishes on the internet is generated by the medium and not by the politics (thinkers, activists, parties)?
You know, I think they are responsible, which is not the answer I was expecting to come up with. But everyone who comes up with a political idea and tries to espouse it should also recognize that their ideas will be misused by morons, and if that misuse leads to the status quo being worse, they should’ve shut their mouths.
That’s literally unknowable, I recognize. But at the least, any political philosopher should _also_ write about how their philosophies are likely to be misused and be thoughtful about how to inoculate against it.
Thanks for the reply. I agree that thinkers can and probably should give attention to the way political ideas can be used and abused in damaging ways. But I'm stumped about how doing that––writing another article, adding another chapter to a book––could actually inoculate against the weirdness of much internet culture.
I'm not a media scholar, but I think the most inane stuff on the internet is driven by emotional and psychic needs––a need for attention, dopamine hits for accusing or mocking others, etc. Political values and ideas are likely to be the pretext rather than the cause of the inanity.
I guess the question is: what does it mean for people to be responsible for their ideas anyway? I’m just gonna spew some ill-formed thoughts for a sec.
What exactly is the duty of the writer anyway? It can’t be never to put forth an idea that can’t be misused—no one would write anything at all. So let’s try this: the duty of a writer of ideas is to not put forth an idea into the world that will foreseeably cause more harm than good. That goes both to how one’s ideas can be used and how they can be misused.
Then we have to answer the next question: these dolts that misuse the idea, were they going to make the world worse anyway, so the idea doesn’t matter? Or are they making the world worse than they would have otherwise? I suspect, for a lot of cases, the idea _does_ make the world worse, especially if you consider the opportunity cost of putting a better idea in their head anyway. This goes to the foreseeability question: if you can imagine people who are stupid misusing your idea when they would have otherwise not hurt anyone, your duty is to either modify the idea or just not publish it.
Hailey Welch is such a perfect avatar for 2024. It's like the old Onion "Ask a Faulknerian Idiot Man Child" advice column gag adapted as an Adam Curtis documentary.
I think part of this is that "crypto", like "stocks", is really not one thing.
If somebody goes all in on out of the money calls on some meme stock, and then they lose all their money, everybody will say "what did you expect?".
If somebody buys an index fund from a major provider, and then Fidelity loses track of the money, that will be a major scandal and seriously undermine the credibility of the asset management industry.
Hawk Tuah coin seems a lot more like the meme stock scenario than the Fidelity scenario. FTX was the Fidelity scenario.
The vulnerability to scams seems to be a feature rather than a bug to many.
I listened to as much of Coffeezilla’s explanation of this scam as I could stomach, and it was striking how obvious the red flags were to him. He acted like everyone should have seen them right away.
Crypto is complicated enough to make dumb people feel smart when they understand the scams, but smart-sounding enough to also fool many dumb people into losing their shirts. It’s the perfect environment for people who aren’t very serious.
I agree that wanting to legitimize an industry or sector generally means making it as inhospitable as possible to scammers and fraudsters. I think, though, that a lot of people (especially those into things like cryptocurrency) have a mindset that rules and regulations are for suckers. if others can’t spot a scam for what it is, it’s their fault for being an idiot, and they deserve the resulting losses. People are always too smart for protective regulations and traditional institutions until they realize they need them 🙄.
This was so well said. Obviously, I think so because I totally agree. But even getting over myself and standing back to view this issue objectively, it strikes me as exactly right.
The crypto crowd's reaction to these fraudsters is a self-defeating strategy. Maybe it stems from a misplaced sense of superiority: "We - unlike those dumb plebes - know better than to fall for shitcoin. If you can't take the heat..." And if the crypto-lovers want to keep it real by keeping it niche, then this might be a winning strategy for them. But that can't be the way to build it into a thriving financial option.
There are a lot of very real, very profitable, very non-speculative opportunities to make money skimming some value off of all the transactions happening on the blockchain. I'm not talking about normal exchanges like Coinbase, there is also a lot of stuff that is "decentralized" and really takes advantage of the blockchain's unique properties.
This is similar (though, in the concrete details, completely different) to middlemen in the normal financial system.
But it only works if there's a bunch of transactions happening and right now, the main source of transactions is people gambling on shitcoins, because there is no actual use for cryptocurrency currently. So nobody is going to speak out too much.
To most “Bitcoiners”, any crypto coin that isn't Bitcoin is a "shitcoin". This includes top coins like Ethereum and stable coins with proven use cases and large adoption rates. Bitcoiners will say, “well, what did you expect?” if any non-BTC coin drops in value, because again, they're all shitcoins in their eyes.
Those who aren't solely focused on Bitcoin may believe in the long term value of coins like Ethereum, XRP, Tether, etc., and also probably look down on memecoins as shitcoins. Perhaps they see some staying power in an OG coin like Dogecoin, but again, not surprising at all to them when the Hawk Tuah shitcoin went to $0. And it makes sense that those "crypto people" would express their complete lack of shock.
Bitcoin has been around for 15+ years, making it 105 in crypto years. There is a near-infinite amount of information available, from google to chatgpt, about the basic dos and don'ts of crypto investing. People new to the game don’t deserve to lose all their money, but similar to stocks, not every coin is equally valuable/safe/worthy of investment. If you don’t understand the basic difference between BTC and HAWK, you shouldn’t be throwing money at either. And if you do, it should be fine for crypto people and anyone else to point out the stupidity of that decision in when their money (almost-certainly) disappears.
The sociologist Erving Goffman wrote a beautiful little piece many decades ago with the title "cooling the mark out". "Cooling the mark out" means: Calming down the victim of a scam after the victim has become aware s/he is scammed. The purpose of cooling down the victim (mark) is to reduce the probability that s/he will go to the police, or in any other way retaliate against the scammer.
...Goffman goes through the psychological techniques scammers can use to achieve successful cooling out. I would say that getting the victim of a crypto scam to agree with the statement "what can you expect", is one of the strategies they can use. The meta-message communicated by this sentence is something like: "You have already behaved like a fool - now don't embarass yourself in front of others by calling further attention to this fact".
(...Goffman is the father-figure of social interaction analyses.)
I put this under "the heart wants what it wants." It doesn't bother me that people want to explore crypto. People do a lot of stupid stuff. And, of course, many say bitcoin is stupid, but I really can't figure it out one way or another, so I say let them experiment.
Unfortunately the people experimenting now include institutional investors, like pension funds, so we’re all increasingly exposed whether we want to be or not.
If I knew it was definitely bad and wrong to be exposed than I'd object. But I don't know that. It's out of my league, and I'm hoping pension fund administrators know more than I do. Option markets are argued to be badly designed by Nassim Taleb, who made a fortune betting against them in the 2008 crash, and yet they are a huge part our of finance system. Again, out of my league, so I can't say with certainty that one thing is good and the other is bad when I have no idea.
I don’t disagree with this take, and professionally I’m around a lot of tech people who invest in crypto knowing full-well the risks. I don’t quite understand it myself, but then, some people enjoy skydiving and I don’t get that either.
My concern is that for normal people who have neither the time nor the savvy to do a risk-reward analysis on crypto investment, all of this is incredibly opaque, and crypto might end up looking as reasonable an investment strategy as stocks or bonds. Which, it isn’t, but the crypto industry (and existing backers) have every interest in making it appear so. And then people lose their life savings. Not great!
I understand your concern. Of course there are things we should try to control like Fentanyl. That is where I'd make my stand, and I think FdB would basically agree, he just may be a bit more on the regulation side than I am. Complaints about carnival barking opportunists aren't enough to convince me to bring in regulation. I'd need some sort of technical reasoning as well, and on that front no one has given me a good answer. Most complaints on the "technical" side are it's new and weird so it must be bad.
When it's so confusing that no one can figure it out...like the process of mortgage backed securities, debt obligation bonds and credit default swaps...that's where the dangerous, dirty stuff happens.
Once the government started bailing out "investors," we all got affected.
I get the sense that people enjoy being part of the crypto community because it feels like an underground “movement” that requires some street smarts to participate in. Laughing at people who do it wrong is part of the in-group bonding experience. L
That sense of belonging is an important component of what keeps the whole thing rolling through the ups and downs: there’s a core of true believers who have made crypto a part of their identity so can never afford to give up.
Doesn't hurt that there are people who have made unreal sums of money in crypto. I suspect most of the "land rush" fortunes have already been made, though, and each of these new launches are literally speculation machines where a few suckers buy it because it tickles some touchstone for them, and a whole bunch of others buy trying to guess at which coin will have the most suckers so they can ride it up for a few (weeks? days? hours? minutes?) then make a quick profit by dumping it.
I worry that Trump, Musk and the rest are legitimizing these Ponzi schemes. I worry it will grow large enough to jeopardize the real economy. That's what happened in the early 2000s. The banks with their mortgage backed securities Ponzi schemes really rocked things for years.
I also worry about the independence of the FED.
But this is the point I always make, right - conversatives want to win but they don't want to actually rule. They're much, much happier being on the outside flinging rocks.
I don't really follow either. Maybe he means that conservatives (which I guess he thinks all the crypto folks are?) want to "win" (i.e., make money off those they judge suckers), but are unwilling to "rule" (make regulations to make these kinds of markets "work"?), and then throw rocks at the suckers?
The idea doesn't make sense though. The ones who want to win explicitly don't want to rule. They want to win. They don't want anyone interfering in their shark tank. But I think he's confusing conservatives with libertarians (or perhaps conservatives with Republicans, who are no longer conservative).
Although I am not sure how FdB's comment follows, I think he's right. Conservatives want to be in charge, but they have zero interest in governing, and haven't for probably thirty years. They have no policy ideas, no solutions, and no initiatives except "lower taxes." Well, they want to deport illegal immigrants, but they don't really do much of that except a bit here and there in a showy way.
Sad to say, the GOP is really just an ambition vehicle for Donald Trump. Maybe that will change once Trump finally leaves the stage, I coudn't say.
I think Bistromathtician explained Freddie deBoer's comments.
As for Republican policy ideas, *until* Trump, Republicans' policy ideas were first a bit Reaganite (e.g., Contract with America). You can say they govern badly, or have bad ideas, but those were real policy proposals, real governance. It was not merely throwing rocks from the outside.
The Tea Partiers were a bit different. Their goals were more nakedly libertarian and less about specifics of governing than they were in attempting to disassemble various parts of the system which they viewed as corrupt.
Then there's Trump: where there are policy ideas, but they cohere only in that they are the policy ideas that Trump likes at the moment, that Maga Republicans respond to emotionally. Many of those ideas do amount to throwing rocks at the establishment. And in fairness, this is a democracy, and that appears to be what quite a few of our citizens would like him to do.
Crypto people get "inspired" by being part of a world-changing movement that will undo the financial system, but when it comes to actually acting like a replacement to the financial system, they are fundamentally unserious about the abuse they perpetuate. This is analogous to Republicans complaining about all the things the government does wrong, and then when they get power, doing nothing to fix the problems (and often actually making things worse).
There's more than one type of crypto person. Some are indeed into it for the "lost faith in fiat currencies" or whatever idiocy they claim crypto will save us from. Some are simply predators, interested in taking whatever they can from whomever they can as much as they can, and love the almost total lack of regulations around crypto. It's a game and they want to win. And many see it as a kind of diversification, or a hedge, or a speculation with a high risk, but potential high reward.
Right
"when it comes to actually acting like a replacement to the financial system, they are fundamentally unserious about the abuse they perpetuate"
Who's "they"? It's easy to cherry-pick bad actors and ignore the positive when one's set to keep one's mind closed. To name names, why don't you read up on, say, what SEC chair Gary Gensler has done to companies like Coinbase as well as specific blockchains working to establish legitimacy. It is screamingly obvious that for obvious reasons crypto has powerful enemies that have no interest the general welfare.
Yep, it's been "we'll show the normies" since the days of home-mining. Adding in the possibility of making money AND owning the normies? They get to play gentleman bastard without having to actually learn any tradecraft.
Think of crypto as a vote of "no confidence" in the current financial system, much like gold is a put option against financial collapse.
I find Patrick Boyle insightful in many things, but in his criticism of crypto , he does not get or does not want to get how more and more humans see the existing financial system as rigged against them, and are seething with white hot incandescent rage as a result.
If you want to know what elected Trump, that is why.
To me what gives away the lie at the heart of crypto are things like the legislation recently proposed to have the US government buy and hold $100 billion in crypto value––under the laughable pretense that it will be a first step in reducing the national debt. (How exactly does the US pay down debt with crypto?)
A scheme like that––very likely to go through if the Trump administration pushes hard enough––not only contradicts the whole libertarian premise that crypto breaks with the state; it empties the stable, state-backed reserves of the US into the pockets of crypto moguls who own vast amounts of speculative value in coins that have yet to prove they have any meaningful public use.
The proposal us a gimme, nothing more.
Not arguing that. FWIW, if you see gold prices as basically a put option on financial collapse, gold prices suddenly make more sense.
In many ways, being wrong but wrong in a way that is right about the way everyone else will behave when the perception is that we are coming up to the edge of collapse is still good. As long as things don't *actually* crash, it can be an effective hedge. It's one of those dangerous areas where it will look like you were right all the way until you fly over the cliff.
It's not a hedge against the stock market, I don't think. It seems like it would be a hedge against currency failures / banking failures, but I am not knowledgeable enough to say if that's really true.
The Economist had an interesting article on gold. A lot of states/countries are buying gold reserves because it can be used to work around sanctions and it's value tends to hold if things world-wide totally go pear-shaped. The end of the article/podcast was that it might work for states and billionaires, but the run of the mill COSTCO shopper was going to lose their gold to the guy who stockpiled assault weapons.
Good thing crypto is here to not be rigged against normal people. Or is it better because the ones doing the rigging are not the government?
I didn't say that the mindset was based.
Fair enough.
I frequently criticize the current system, but I do not own any crypto, NFTs, etc..
There's a thread of desperation. More and more people are isolated from the system that doesn't seem to be run by or for any of us. See also sovereign citizens and AI accelerationists.
Interesting that this column follows the previous column about inane online cultures of lefty fandom. Crypto strikes me as an industry dominated by an online culture that skews right and male. In broad strokes, it fosters an ethos that is well analyzed here by DeBoer: it wants both public respectability for the currency but revels in the misfortune of people who get ripped off.
There is an indirect way that you could link that ethos to conservative or libertarian politics, e.g. a political view that it is right and just for individuals to either flourish or fail on the basis of their own smarts and efforts alone. But does that mean that libertarian political thought is inherently responsible for the dumbest crypto bro assertions on X? Is Robert Nozick et al responsible for trying to police the smarmiest taunting memes or even trying to address the inherent contradictions of the industry?
In other words, how far can we hold political movements responsible for the pathologies that flourish in social media? Or does it make more sense to say that much of the debased or nutty stuff that flourishes on the internet is generated by the medium and not by the politics (thinkers, activists, parties)?
You know, I think they are responsible, which is not the answer I was expecting to come up with. But everyone who comes up with a political idea and tries to espouse it should also recognize that their ideas will be misused by morons, and if that misuse leads to the status quo being worse, they should’ve shut their mouths.
That’s literally unknowable, I recognize. But at the least, any political philosopher should _also_ write about how their philosophies are likely to be misused and be thoughtful about how to inoculate against it.
Thanks for the reply. I agree that thinkers can and probably should give attention to the way political ideas can be used and abused in damaging ways. But I'm stumped about how doing that––writing another article, adding another chapter to a book––could actually inoculate against the weirdness of much internet culture.
I'm not a media scholar, but I think the most inane stuff on the internet is driven by emotional and psychic needs––a need for attention, dopamine hits for accusing or mocking others, etc. Political values and ideas are likely to be the pretext rather than the cause of the inanity.
I guess the question is: what does it mean for people to be responsible for their ideas anyway? I’m just gonna spew some ill-formed thoughts for a sec.
What exactly is the duty of the writer anyway? It can’t be never to put forth an idea that can’t be misused—no one would write anything at all. So let’s try this: the duty of a writer of ideas is to not put forth an idea into the world that will foreseeably cause more harm than good. That goes both to how one’s ideas can be used and how they can be misused.
Then we have to answer the next question: these dolts that misuse the idea, were they going to make the world worse anyway, so the idea doesn’t matter? Or are they making the world worse than they would have otherwise? I suspect, for a lot of cases, the idea _does_ make the world worse, especially if you consider the opportunity cost of putting a better idea in their head anyway. This goes to the foreseeability question: if you can imagine people who are stupid misusing your idea when they would have otherwise not hurt anyone, your duty is to either modify the idea or just not publish it.
Hailey Welch is such a perfect avatar for 2024. It's like the old Onion "Ask a Faulknerian Idiot Man Child" advice column gag adapted as an Adam Curtis documentary.
The problem with bubbles is that they burst.
I think part of this is that "crypto", like "stocks", is really not one thing.
If somebody goes all in on out of the money calls on some meme stock, and then they lose all their money, everybody will say "what did you expect?".
If somebody buys an index fund from a major provider, and then Fidelity loses track of the money, that will be a major scandal and seriously undermine the credibility of the asset management industry.
Hawk Tuah coin seems a lot more like the meme stock scenario than the Fidelity scenario. FTX was the Fidelity scenario.
The vulnerability to scams seems to be a feature rather than a bug to many.
I listened to as much of Coffeezilla’s explanation of this scam as I could stomach, and it was striking how obvious the red flags were to him. He acted like everyone should have seen them right away.
Crypto is complicated enough to make dumb people feel smart when they understand the scams, but smart-sounding enough to also fool many dumb people into losing their shirts. It’s the perfect environment for people who aren’t very serious.
I agree that wanting to legitimize an industry or sector generally means making it as inhospitable as possible to scammers and fraudsters. I think, though, that a lot of people (especially those into things like cryptocurrency) have a mindset that rules and regulations are for suckers. if others can’t spot a scam for what it is, it’s their fault for being an idiot, and they deserve the resulting losses. People are always too smart for protective regulations and traditional institutions until they realize they need them 🙄.
This was so well said. Obviously, I think so because I totally agree. But even getting over myself and standing back to view this issue objectively, it strikes me as exactly right.
The crypto crowd's reaction to these fraudsters is a self-defeating strategy. Maybe it stems from a misplaced sense of superiority: "We - unlike those dumb plebes - know better than to fall for shitcoin. If you can't take the heat..." And if the crypto-lovers want to keep it real by keeping it niche, then this might be a winning strategy for them. But that can't be the way to build it into a thriving financial option.
It was months after I saw her name and someone had to point it out, but it’s actually Haliey not Hailey
Even better!
This is too broad and dismissive.
Substitute in "stocks" for any place that you wrote crypto and you'll find similar bad actors.
Crypto is now too large to create an article like this.
The same thing happens with penny stocks and those SPACs a few years ago
You can say memecoins or sh*tcoins or something like that, but not crypto as a whole
There are a lot of very real, very profitable, very non-speculative opportunities to make money skimming some value off of all the transactions happening on the blockchain. I'm not talking about normal exchanges like Coinbase, there is also a lot of stuff that is "decentralized" and really takes advantage of the blockchain's unique properties.
This is similar (though, in the concrete details, completely different) to middlemen in the normal financial system.
But it only works if there's a bunch of transactions happening and right now, the main source of transactions is people gambling on shitcoins, because there is no actual use for cryptocurrency currently. So nobody is going to speak out too much.
The communist has...a point.
“Crypto” is overly broad.
To most “Bitcoiners”, any crypto coin that isn't Bitcoin is a "shitcoin". This includes top coins like Ethereum and stable coins with proven use cases and large adoption rates. Bitcoiners will say, “well, what did you expect?” if any non-BTC coin drops in value, because again, they're all shitcoins in their eyes.
Those who aren't solely focused on Bitcoin may believe in the long term value of coins like Ethereum, XRP, Tether, etc., and also probably look down on memecoins as shitcoins. Perhaps they see some staying power in an OG coin like Dogecoin, but again, not surprising at all to them when the Hawk Tuah shitcoin went to $0. And it makes sense that those "crypto people" would express their complete lack of shock.
Bitcoin has been around for 15+ years, making it 105 in crypto years. There is a near-infinite amount of information available, from google to chatgpt, about the basic dos and don'ts of crypto investing. People new to the game don’t deserve to lose all their money, but similar to stocks, not every coin is equally valuable/safe/worthy of investment. If you don’t understand the basic difference between BTC and HAWK, you shouldn’t be throwing money at either. And if you do, it should be fine for crypto people and anyone else to point out the stupidity of that decision in when their money (almost-certainly) disappears.
The sociologist Erving Goffman wrote a beautiful little piece many decades ago with the title "cooling the mark out". "Cooling the mark out" means: Calming down the victim of a scam after the victim has become aware s/he is scammed. The purpose of cooling down the victim (mark) is to reduce the probability that s/he will go to the police, or in any other way retaliate against the scammer.
...Goffman goes through the psychological techniques scammers can use to achieve successful cooling out. I would say that getting the victim of a crypto scam to agree with the statement "what can you expect", is one of the strategies they can use. The meta-message communicated by this sentence is something like: "You have already behaved like a fool - now don't embarass yourself in front of others by calling further attention to this fact".
(...Goffman is the father-figure of social interaction analyses.)