Suddenly everyone’s interested because they keep hearing about people who have made 1000%+ gains – and so the big FOMO effect kicks in. Over the last few weeks the price of Bitcoin and other crypto has crashed – tanking around 40%. Talk has then turned to ‘buying the dip’.
Unfortunately, as the interest in crypto has skyrocketed and the amount of money to be made has gone through the roof, crypto has naturally attracted a lot of bad players too.
One of the most common types of scams are rug pulls where the founders sell the bulk of their holding and/or the liquidity, destroying the crypto’s value. Then there’s traditional Ponzi schemes where older holders have their gains financed directly by new people joining.
And the most popular scheme is the old pump and dump – hype up a pointless pink sheet, flog it to as many people as possible to drive the price up, and then dump all your holdings when the price gets high enough.
Aside from the scams there are other big issues too. In the 12 years that we have had crypto, we continue trying to understand exactly what problems it really solves and why those solutions are better than alternatives.
The infantile state of cryptocurrency means that there are natural fluctuations and risk, but it also brings weird tribal effects. Investors are no longer satisfied with a 10% annual return. Now you need to get 1000% per month – this has almost become an expectation. And the tribal nature means that people build up huge cult-like hubs where they talk with like-minded people about the huge prospects and the bright future. The same tribe will then seek out any dissenting or opposing views and meet them with mindless profanities, obscene comments, threats of violence, death threats and active attempts to destroy people’s careers and livelihoods.
I know this because I’ve actually experienced this first hand. This all points to a big problem that we have in the world of crypto where any meaningful debate is impossible and descends into anything from childish insults, to online tribal warfare.
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