How Scams Worked in the 1800s | Hacker News Reader

How Scams Worked in the 1800s

npr.org

117 pointsbrahmwg37 comments

I witnessed a scam similar to "Horse Trading" while playing Team Fortress 2. In the game, players can wear cosmetic items. It's just for fun, but the items can still be worth tens or even hundreds of dollars.

A player joined the server that I was playing on and after a bit asked if anyone had a certain low-value hat. He said that he was willing to pay the equivalent of $20 for it. No one did (no doubt he had made sure before asking.) He left the server and a few minutes later another player joined wearing that exact hat! A bidding war began and the second player left approximately $10 richer.

People used that scam on WoW. People would type in the chat channel that they want to buy some item for 200 golds. Meanwhile they put for sale that item on the auction house for 100 golds. Some people would then rush to buy the one on the auction house to resell it to the potential buyer but of course the potential buyer is now nowhere to be seeing.

Are there games my kids can play and safely get burned and learned by scams like this, using play money not expensive credits from real money?

Ultima Online was the best (pre-Trammel). I've never seen so many elaborate and innovative scams. On top of that, you also got to learn how to avoid being robbed of all your belongings if you went to the wrong neighborhood.

It was extremely brutal since there was literally no protection of your gear. Not only could you lose all the items on you if you got mugged or killed. If a scammer, thief or murderer got ahold of your house key they could clean out your whole house meaning you would lose everything.

I hope to experience the same rush in another game in the future.

Unfortunately, when UO was big my internet connection was too spotty for online games so I never got the chance to experience that (though that might be a good thing...). In the past few years though I had a lot of fun with another game called Haven and Hearth which had similar mechanics - down to losing your key and having your entire homestead raided.

The really cool thing about that game was that any time a player commits a "crime" like trespassing, theft, assault, etc, a "scent" is left behind at the scene of the crime which could be collected and would then allow you to track down and possibly exact revenge upon the perpetrator. I've never seen another game with a system quite like that one. The game had plenty of other flaws, but it still managed to lead to some pretty unique situations, and actually made you think twice before going on a murder/theft spree.

The game itself has pretty much been rewritten from scratch since the last time I played so I don't know what the game is like in its current state, but I would still recommend giving it a look.

Wow, that's amazing. I need to check it out (even if it's a completely different version now).

I was mugged in Buenos Aires, IRL. It was ten years ago. I went to a club alone. I bought beers for everyone at $.33 a beer. Someone sucker punched me when I left and riffled my pockets. They took my wallet and watch getting a total of 10 pesos which was my cab fair to the apartment I rented. They left my keys which had the address and apartment number written on the key chain, which in hind sight wasn't too smart. Is there a game where people can learn not to talk to strangers?

"sure, I can repair your armor for you, just accept the trade...!"

(before you could target the repair skill to items in the trade menu)

EVE Online.

Runescape is the best for this. Learned everything I ever needed to learn about scamming from that game... well that and eve online.

I remember the number of scammers started increasing when Jagex removed the buy limit from the grand exchange. Lost 150 mil within the span of a week from scammers around that time. I'll never forget that. Luckily it's what got me to quit.

Trimming Rune pl8 4 free

WoW apparently. As long as your kids don't have the means to purchase gold from Chinese gold farmers that should satisfy your criteria. They'll just be out hours of repetitive grinding or daily missions, which may induce the learning process you're looking for.

There's not a lot of scamming in WoW, since the GMs actively punish it. I imagine they'll even punish you for the "horse trading" scam if you do it blatantly enough.

MMOs are generally a good place for this stuff.

I knew a fellow who would offer to offer to buy expensive runes in Shadowbane for, say, 250k gold - and then when the time came for the trade he'd slice a 0 off the amount of gold he put in the trade window. Perhaps this sort of scam is helped by small font and large currency inflation.

Back when I was new to the internet I got scammed using this method on Runescape. I also got scammed on Neopets. The feeling of being scammed those two times as a pre/teen made me a lot more cautious and I'm glad it happened on the internet and not in real life.

There's a version of this on EVE where you open up buy orders for something not offered locally for 10x what it's worth. Then you transfer all your money to an alt character, so you can't fulfill it, then your alt brings in the item and offers to sell it for 5x.

that's the first I've heard of that scam - fascinating.

right now I've got a scammy bit of economic warfare that I wage against aggressive traders that's proven to be profitable and good at getting people off the market:

-Locate an item the target is trading in that has a 20-30% buy->sell order spread

-Have a large amount of the item that you want to use to disrupt the other trader - preferably you've bought this item via a buy order and liquidating it at 10% under market price still brings in profit

-Overcut the target's buy orders by 0.01 ISK. Go back and forth a few times, you're trying to establish a rhythym.

-Now start overcutting the target's buy orders by 5% of the buy->sell order spread

-The buy->sell order spread should start rapidly closing - it's absolutely stunning how rarely targets notice that their profit margin is shrinking as you overcut each other back and forth.

-Once you have the target's buy orders within 5% of the lowest sell order price, unload all of your stored good into his buy order.

This method produces multiple positive outcomes:

-Fast liquidation of an asset, sometimes in many multiples of daily moving volume

-Drives drives the price of the item down without having to babysit the orders yourself (the target will do it for you now that he's stuck with all of your item!)

-Discourages margin traders from doing business in certain markets

I will never stop being impressed when people throw around (relatively) advanced technical terms they've learned... by playing video games, whether it's economy from Eve online or rocket engineering from Kerbal Space Program.

Is that a bug or a feature, that Eve checks your wealth to open a buy order, but not to keep it open?

The margin trading scam is considered a "feature" by the devs at the moment, and has existed for a long time.

http://wiki.eveuniversity.org/Scams_in_EVE_Online#The_Margin...

Makes sense, since this happens in real life and is what caused the housing market to collapse.

Horse trading, as reinterpreted by the streets "Can't con an honest john": https://www.youtube.com/watch?v=bTB929OoqI4

As they say in the excellent British series Hustle, the art of the Con is finding someone who wants something for nothing, and selling them nothing for something.

> no doubt he had made sure before asking

Technically no need for that. If someone ends up having it, you just log off that server and try a different one. Pretend it was a disconnect or something. Who'd ever know what you were trying to do?

The most daring scam of that era is probably the successful raising in 1822 of £200,000 (a lot of money at the time) from investors who bought a bond issued by the "Kingdom of Poyais." The bond was floated in the main London exchange. It might be the only bond ever issued by a fictitious country in history.[1]

[1] http://www.economist.com/news/christmas-specials/21568583-bi...

According to [1], £200,000 in 1822 pounds is £20,207,734.91 in 2013 pounds

[1] http://www.whatsthecost.com/cpi.aspx

According to the Economist article I linked to above, £1.3 million back then, as a percent of Britain's economy, would be £3.6 billion today, so a bond issue of £200,000 in 1822 would be over £550 million today. Either way, it's not peanuts.

It's difficult to compare amounts between different cultures/countries/times because money is an abstraction. To the extent people spend on the same things, you can compare how much each costs, but many of the things previous generations spent on are either viewed as useless by us, or are considerably cheaper. (Although even "cheaper" is subjective: we can point to abundance, or marginal cost to produce in labor or similar more objective metrics to get around that).

I tend to consider all such statements spanning a sufficiently large time as guesses.

(For other countries, you need to consider different cost of goods even when money can be directly converted; you need to consider what's provided by the government as a cost-of-living deduction, and plenty of other stuff. It's like comparing interest rates without mentioning the money float or gold standard when they differ among the two periods you're comparing.)

/rant

On a time scale of centuries, the only real way to compare money is by the effect it has on other people when you spend it (i.e. how much effort other people expend when you draw down the claim on future production that money represents). You can look at the percentage of the population / economy affected (for large amounts of money), or the absolute number of people affected (typically measured against of the average wage). When the size of the population overall is changing, numbers calculated using the two basic techniques will necessarily diverge. Which number is more important depends on whether you're interested in relative or absolute purchasing power, which is context dependent.

In general, I agree.

In this case, the percent-of-GDP approach used by the Economist is probably a good one, because (1) it relies on high-quality data (the Bank of England, founded in 1694, provides GDP data going back three centuries[1]), and (2) it measures the bond's size in relation to the size of Britain's overall economy, which intuitively makes more sense for financial-market figures.

[1] http://www.bankofengland.co.uk/research/Pages/onebank/threec...

"Extraordinary Popular Delusions and the Madness of Crowds", published in 1841, is still worth a read. Read about version 1.0 of the classic big scams, from the South Sea Bubble to Tulip Mania.

This is a great book. I found the section about the Crusades especially interesting.

I felt compelled to mention it's available free on Project Gutenberg although printed copies are also available on Ebay.

https://www.gutenberg.org/ebooks/24518

If you're interested in the psychology of audience manipulation for magicians, check out "Strong Magic" by Darwin Ortiz.

For further reading check out Victor Lustig, the man who sold the Eiffel Tower, twice.

https://en.wikipedia.org/wiki/Victor_Lustig

This sounds like a startup idea, Uber for Scams. Sign Up to Scam or Tap and Swindle.

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