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Comment by ordinaryradical | Hacker News Reader

Those who’ve been drawn into this craze don’t seem to realize the risks involved. I’ve had several people with barely any technical literacy who’ve “invested” or asked about what it is. None of them understood the purpose, mechanisms of transfer, or risks.

When your your dry cleaner is telling you about a sure thing, you know the bubble is already over.

Once cryptos are roped off from money laundering, we’ll see the prices fall back down to Silk Road levels because black markets were and seem likely to remain their sole utility for some time.

Blockchain tech is really interesting. I think there’s some amazing stuff that could come out of the space. But anyone watching this closely should realize that there is a lot of magical thinking going on, largely because of the deflationary nature of many of the coins.

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>Once cryptos are roped off from money laundering, we’ll see the prices fall back down to Silk Road levels because black markets were and seem likely to remain their sole utility for some time.

Hmm, I think you might doubt the amount of true believers out there. Many bitcoin investors seem to be in a mindset where anything that happens is 'good for bitcoin.' Dips are good, high prices are good, volatility is good, lack of regulation is good, no wait regulation is happening? Actually regulation is good. Since bitcoin requires you to up the stakes and put money in the pot but also has no fundamentals there is a kind of concentrated effect we see on facebook and other social networks where you're massively incentivized to enter a thought bubble and only read good news about bitcoin.

> I think you might doubt the amount of true believers out there

If you've experienced a proper run on an illiquid asset, you'll remember that the true believers never stop believing. People just stop lending to them.

You could be right. But from what I’ve read there’s a very small number of large owners who are almost certainly manipulating the market to enrich themselves while the vast majority have such tiny stakes as to be utterly insignificant in the scheme of things. Once the botting and laundering is unachievable, there may not be much of a game left for these players and I think all it will take is one or two deciding the jig is up to tank the market permanently. I think the libertarian ideologues will probably keep holding even if the music stops, but that won’t be enough to sustain any of this growth.

Read up on Spoofy and Picasso if you want to get a sense of some of the shenanigans going on here. This crescendo of growth is largely artificial, not even speculative in nature.

> a kind of concentrated effect we see on facebook and other social networks where you're massively incentivized to enter a thought bubble and only read good news about bitcoin

Very astute observation. Imagine Ponzi days (or Mavrodi days) fueled by Facebook?

As someone who has been in the cryptocurrency space for many years and loves the tech, the space is still very much the wild west in terms of risks, scoundrels, pick-axe salesmen, and idealists looking for salvation.

So many avenues to take advantage of others.

Yes we see this comment rehashed on every crypto thread on HN, why? This article is about something specific.

>McDonnell and CDM engaged in a deceptive and fraudulent virtual currency scheme to induce customers to send money and virtual currencies to CDM, purportedly in exchange for real-time virtual currency trading advice and for virtual currency purchasing and trading on behalf of the customers under McDonnell’s direction

>In short, McDonnell and CDM used their fraudulent solicitations to obtain and then simply misappropriate customer funds

This raises some interesting questions: how do these schemes (which have been around much longer than cryptocurrency) differ when virtual currencies are involved instead of fiat?

Yes we see this comment rehashed on every crypto thread on HN, why?

Because it still bears saying, especially given how many people are just looking for greater fools to hold their bag. Inevitably the replies include a barrage of whataboutism centered on “fiat currency” in an attempt to normalize or justify the cryptocurrency shitshow.

This story has nothing to do with whether cryptocurrency is a bubble. It’s a simple instance of theft. Sophomoric prognostications on the future value of cryptocurrencies have nothing to add to the conversation about the article. This kind of thing is depressingly common on HN, and I believe the majority of them are written by people who have not read the article. They usually have nothing to do with the content of whichever article triggered them.

>Once cryptos are roped off from money laundering, we’ll see the prices fall back down to Silk Road levels because black markets were and seem likely to remain their sole utility for some time.

I don't think that'll happen for all countries.

You might even be able to run your crypto businesses in micronations and/or international waters: https://en.wikipedia.org/wiki/Micronation

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