Reposting one of my earlier comments [0]:
Like many people back then, I also found the whole proof-of-work / blockchain concept to be interesting from a theoretical computer science / distributed systems perspective.
But these days, I can't help but think that we've inadvertently created a paperclip maximizer without even bothering to create an AGI first. Humans are the AGI, and we're going to happily use more and more energy to play this stupid game for as long as it looks like there's a profit to be made, even if the global outcome is to our own detriment.
If we want this mess to go away, we need to find a way to change the incentives globally.
Finance used to be a support function for industry. Now, in the US, industry is almost a support function for finance - just something to generate numbers to bet on, like horse racing.
Cryptocurrencies are the ultimate extension of this trend. They're totally detached from any physical reality, or even economic reality. NFTs are worse. Most are overpriced pet rocks.
It's worth noting that China does not work this way. China's government has kept finance in its box, focusing investment on actually making real stuff. That seems to be working out. The US has lost the capability of making consumer electronics and telecom gear. US Steel, once the biggest steelmaker, is now in 35th place. This may end with the US a has-been country, like Britain, pining for the glory days of empire.
How does this unwind? Well, the bottom has fallen out of Axie Infinity, once the biggest NFT. It's really hard to tell the value of NFTs on OpenSea, because there's so much wash trading and not much liquidity. But it seems to be difficult for a purchaser to sell an NFT at a profit. Profits mostly flow to minters. As I point out now and then, NFTs as investments work a lot like Beanie Babies on eBay - high asking prices, low actual selling prices, large numbers of items on sale with high reserves and no bids. That's what an illiquid market looks like.
ICOs were a big thing back in 2018. Then the SEC started cracking down. Now there are few ICOs, and the SEC is working through the backlog, bringing the hammer down on about two ICO promoters per month. In the aftermath, not only were most ICOs failures [1], it's hard to find any that created a business outside cryptocurrency speculation. There's much tail-chasing in the cryptocurrency world.
Historically, that doesn't end well.
[1] https://www.investopedia.com/tech/most-successful-icos-all-t...
I think there's a few things here. I don't believe that many people are actively and knowingly working on deliberate scams, but there definitely are some. I do think a lot of people are working on trash and it's only sustainable as a business model because people are making speculative investments, such as Decentraland clothing brands (wtf?). I'm in the field because I like the technical challenges - I've been really lucky at working on some pretty hard/cool things with some really smart engineers. However I do find the constant onslaught from HN, news articles, random people on the internet and in real life, to be too much for my mental health and I'm considering leaving the industry to work on something else. Even if you're just trying to have fun working with a tech stack you enjoy (I've spent time in Haskell, Rust, Go, etc... most of the hip cool ones), being accused of being a scammer every 5 minutes is just very very draining. I still don't believe I have enabled any scams directly but I don't want to spend the next few years of my career justifying that either. In fact I just was talking to my wife about this before opening HN and seeing this question.
I think I need to take a few months off and start looking for something that's tangible like robotics, or something more visual. I'm just not in the position to do that right now. All the best to you anyway - I hope you can keep it all together better than I can!
I got there by accident. I thought it's a scam before but now I'm more convinced. My best friend works for a company that is literally a scam (founder arrested etc). They changed owners but he wants to cash in on that. Another colleague actually bought into the whole nonsense and started something. Then we all got roped in. I want out but I'm torn because that colleague has been very loyal to me when I needed him and I don't want to be disloyal.
Fortunately, it seems he is getting disillusioned too so we might leave that nonsense behind. Technically I don't do any work there. It's just my name/face as I'm reasonably known in IT and have some clout.
All ICOs are scams, without question. I don't know why anyone would ever get tricked into an ICO.
Most new coins are pump and dump.
So yes, overwhelmingly it's a scam, or at the very least, overwhelmingly manipulated.
Does that mean the core few who have been tricked into thinking it's a useful technology and truly believe in it are off base? I don't know, I don't know if the majority of crypto being used for fraud invalidates the few potentially useful hypotheses of crypto. I think the real question is can crypto survive at all as a useful system given it's inherently a great platform for fraud?
The math behind is fun though.
I’d probably suggest this: https://www.matthuang.com/bitcoin_for_the_open_minded_skepti...
I think it’s not “all a scam”, but there are definitely scammers in the community which add a lot of noise to what’s a pretty cool new capability to handle decentralized state.
https://danromero.org/crypto-reading/
I don’t know if what your startup is building is worthless, but the tech underlying the domain is not.
There are people who look into the future and perceive this, and to them the effect is an intuitively-scammy feel; and it may even seem like it's a system that is destined to fail. Generally the systems perspective or meta-perspective will be first to call out the scam side here.
Things meeting the scammy-feel bar tend to be ephemeral, emotional, the front side of the technology curve for sure. Non-scammy things seem more qualitatively planned-out, secure, quiet, structured, etc. just like early-scam-radar individuals often demonstrate at a personal or temperamental level.
There are others who look at the moment, who take the ephemeral for what it is, and think, "wow, in the right position you could turn this into something that really helps you make it to your next stage in life." These people are probably less likely to think it's a scam, not necessarily because it definitely isn't, but because it's also a lot of other things. Scammy could just be one relevant tag among many. "Hey, maybe this undertaking can just be enough to get us to the next spot, it doesn't have to be perfect but it will require some excitement or hype just like any venture."
To some degree you need to fit things out to suit your favored perspectives or you'll feel the worse for it. To some degree you also need to understand others and see the difference in perspectives as possibly positive, or you'll tend to get stuck in subjective loops as you move forward in life.
And to some degree, if you can combine those perspectives and develop a sort of both-perspective, IMO you can really put together a strategy that flies well, and far, because you'll be gripping both ends of the handlebars on the human race bicycle.
Just some ideas, and a terrible metaphor--good luck with whatever you decide.
It's a bit like asking "is the internet just a big scam" in 1998 at a magazine and newspaper trade conference.
The people here are too engrossed in the world they built and lack the imagination for how it could be completely transformed to offer you an objective answer.
My opinion is that 98% of crypto is either a scam or just bad ideas that will fail, but the remaining 2% will be the foundation the future of commerce and technology will be built on.
Anecdotal, I know. But, I think if you look around at the respectable people in the tech field, you will see that most of them are staying away from crypto for a variety of reasons.
Crypto is the worst kind of pop-culture fad tech.
People, you only have limited time on this Earth, do you really want to spend most of your waking hours working on something you don't believe in?
As, of course, it's outright yes
Cryptocurrency is one of the looniest forceful actions and movements by the elite Americans cabal, strongly tightly rooted so longtime ago to New World Order
There was a post not long ago about our obligation as people who know better to speak out about this stuff. Thankfully I've explained to my parents what a scam it is and they have not been taken in, and my siblings agree with me so I don't have to waste time fighting it. But there are so many people being exploited - some maybe deserving.
Tldr, it's an amoral industry that is literally running a criminal scam, you have to decide if you're cool making money off that.
Like it's morally worse than dealing drugs or lots of other "crimes"
I do like the idea of blockchain, but so many resources go into cryptocurrencies that make the future of blockchain mold toward this case instead of something more useful.
I took my first offer out of there and it was the best decision I could make. It's always better to work on something that aligns with your beliefs and goals as a developer.
Coincidentally I don't think crypto is a scam. Crypto tech has pretty much been proven to work by now. The speculative products built on crypto could be a scam. But that's not all that different from speculative products overall.
September 2020 a friend called me, he told me that 3 guys are working on cryptocurrency. I knew one of the names, was a guy that stole a users database from an open source project, "but that was when he was a teenager". The project owner was a bank something (can't remember what). The other guys are devs.
My friend was doing devops with another guy for them (a really nice guy, and smart as hell)
I'm sysadmin, I don't like doing ops, and I'm a really good manager, they were calling me for that.
Anyway, they start talking about the project, and my brother was doing an economics PhD talking about cryptocurrency. He started on that because me.. -_-, I loved the technology at the start, and how they improved the double-enrey bookkiping from Luca Pacioli and before.
I called my brother to join us. He was glad and started to work with the owner.
After some weeks were I was trying to organize them and see what the project was about I learned few things:
They were doing a wallet to connect banks and cryptocurrency exchange The project was delayed as hell. The owner talks too much saying nothing. They wanted to "become and exchange" They were looking for funds.
I wanted at least 2 more devs and wanted to see the code (nobody saw the code, just some presentations and demos, it was nice, but for me was basic)
After another weeks without answers, and the owner talking to me about the shares I will get, I was seeing how less work i will be doing in few weeks (we had our git working, I was pushing the devs to push the code there, i was seeing old code all time, we had the infra and metrics running, etc)
Anyway, they found a capital angel and they hired 3 marketing girls.
They started to sell smoke. They meeting started to be more about marketing and getting money than tech. I was.., angry as hell
I quit.
My brother keeps working with them ("go out from there as soon as you can"), they are doing some cryptocurrency courses.
The head dev disappear one day without push almost any code.
I felt dirty, really disgusted with that people, not to much with the devs, not with the devops, but the owner, the marketing team (that was bigger than the dev+devops team) and with myself for months.
They showed to me something I really don't like about economy and markets.
It is really hard to me to think about working on that area again, they looks like scammers, and I saw them thinking about that.
Have a good day.
What keeps me going, though, is the fact that the technology has some utility and I’m not about to throw out the next tcp/ip because someone will use it to scam an old lady. I like the artistry of the circus but I hate the clowns.
If we are doing analogs, this is the 2000 era of the dot con boom when there were loads of companies doing websites and four guys really doing good work - let’s say bezos, page, brin, and gates. Theil and musk got lucky with their 2k era grift as did a precious few holdouts but only a few really won. Did anyone who bought Netscape early on the retail markets win? Nope. Crypto investors are the ones jumping in after the whales had their taste. They get scraps.
Who is the next FAANG? Who knows. But this is the space where they’re going to be born.
Hi, some 73% of hackernews readers.
Yes, most crypto is speculative smoke and mirrors. Most companies will crash and burn but at some point something useful will survive.
My guess is that by 2028 most of the speculation will be over and the useful companies will be up and running. But who knows what those will be.
The very foundation of this space, the blockchain, is a poorly understood "innovation" that many outer layers of this industry just seem to take for granted as actually satisfactorily solving the problems it claims to, when it very likely does not and never will.
It's important to delineate between something that's a scam and speculative, those are not the two same things. A scam is a rug, there's an intent involved, you have scams everywhere not just in crypto.
The legit companies working on DeFi and NFTs are not scams, while some of them may be a bit speculative, there are also companies providing real value to end users.
Perhaps there are some genuine efforts.
Key is to identify what satisfies you as an individual and follow that path.
There are no perfect jobs.
Find your mission and find meaning in striving for that.
The first thing that you need to do to answer your question is define "scam". The dictionary definition is "a fraudulent or deceptive act or operation", fraudulent meaning "having a tendency or disposition to deceive or give false impressions".
So the question is "was cryptocurrency invented under false pretenses or with the intent to deceive?"
The Bitcoin whitepaper is considered by most as the beginning of cryptocurrency. If one reads that whitepaper, I don't see anything there that could be to be deceitful or show intention to defraud.
The Bitcoin whitepaper proposed a system to allow individuals to hold and transfer a store of wealth between individuals without interference or control from third-parties (such as governments).
Bitcoin is an experiment. The author(s) identified a problem and created a solution, albeit an imperfect one. Since then, others have seen those problems and attempted to fix them. After Bitcoin we saw various forks of the Bitcoin code base to make coins like Namecoin and Litecoin. These were fundamentally Bitcoin with some minor adjustments.
We later got Ethereum which saw even more potential by using distributed consensus to create a world-wide virtual machine where people could run code to modify state. Smart contracts showed potential to do much more with digital currency than just send and receive. Contracts could be written and enforced by consensus without the ability of a third-party to intervene.
Continuing on, we saw more and more innovation in the space. One cryptocurrency uses a DAG to confirm transactions rather than blocks, which allows for much faster confirmations and higher transaction rates. Another protocol was created to allow inter-blockchain transfers (COSMOS,POKADOT) without an intermediary.
All of these cryptocurrencies are experiments. It's a massive engineering effort trying to solve a variety of problems, mostly around wealth management, but there are many others.
Now, to the point of fraud and scams. There are a lot of bad people out there that have no issue stealing from other people. Crypto is a relatively new technology and is designed to be free from government regulation. Because of that, it's quite easy for people to use hype and propaganda to exploit others.
There is nothing, in my opinion, inherent in cryptocurrency that makes it fraudulent.
For those that work in, use, or "invest" in crypto, this is all a long experiment that will likely go on for decades or longer. I believe that this experiment has, and will continue to, bring value.
edit: Cryptocurrency, specifically Ethereum and smart contracts, has allowed my company to convert to a DAO. A DAO is a fascinating way to organize and government a business. There is no leadership hierarchy. Governance is democratic. Everything is done publicly and in the open, including budgets. As an engineering group, we are no longer beholden to one individual's will. Everyone in the DAO has to come together to build toward a common goal. Not having a CEO (or C-suite of any kind) is incredibly liberating and we are building a higher quality product than we did when we had centralized leadership.
* new software architectures based on cryptography and additional communication patterns (aka consensus) which may or may not have long term utility, but are "real"
* a loose "anti-systemic" ideology that is in part deserved but also part half-baked / / misinformed / delusional. In any case it creates lots of talking points in societies that are mismanaged and "angry"
* buy-in and (partial) legitimization from frustrated parties (eg NGO's) that want to "solve the world's problems" and think blockchain might be the tool to fix humanity's faults
* defensive engagement by systemic parties (the same people that have brought society to its knees) that want to embrace and extinguish (just in case it might actually work)
* opportunistic engagement by intermediaries that could not care less what "asset" they make a market in, provided they get a cut
* opportunistic engagement by marketeers that could not care less what channel they use, provided it generates some exposure for their clients (NFT)
* greedy techies that feel left out from the tech oligopolies and found an alternative exploitative path to riches (print your own money)
* a younger generation that is 1) flush with cash, 2) has never had experienced fleecing by smooth operators so has no behavioral immunity 3) thinks this is all very "tech-savvy" and modern and thus kosher
* actual scammers, that ride on all the above
Some scams will be profitable and some may even emerge to be viable product but it’s scammy.
Bitcoin is not.