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Comment by bb123 | Hacker News Reader

This is a terrible scam, but I am astonished by the frivolity with which people would move life-changing amounts of money into something with absolutely no due diligence. When I took on a financial advisor I verified their identity with the govt regulator, verified their written bank details over the phone, and then verified those details with my bank before I even considered sending a single penny. Even then I sent a small test amount, and waited for a written receipt before sending anything more. To dump 500 grand into something you heard about 10 minutes ago on Twitter seems beyond ridiculous to me. This is an amazing example of the old adage “a fool and his money are easily parted”.

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> This is a terrible scam, but I am astonished by the frivolity with which people would move life-changing amounts of money into something with absolutely no due diligence.

It's Bitcoin though. The volatility and returns in this bubble have been enormous, so its quite possible for "life-changing amounts of money" to not feel like that, because it was cheap and easy to get.

I can confirm this. I ran a miner early on in a completely unserious way, and only recently bothered to dig up the wallet from an old hard drive to sell it. Even though it was worth thousands of dollars, I felt about that Bitcoin like a feel about an old hard drive: not worthless, but not particularly valuable, either.

Also, the cryptolottery has handsomely rewarded many people for doing absolutely no due diligence. I mean, if you were someone who bought Bitcoin at the beginning, you probably did it on Mt. Gox, which looked like a garbage fire to anyone who did a little due diligence (and actually turned out to be one).

It's interesting to ponder 'why' an intelligent human being would do this.

- Him having made so much money on a highly speculative asset, at one point having decided to pour a significant amount of money into it in the first place and it paying off? Almost certainly.

- Musk's seemingly irrational nature, tendency to do crazy things, to the point of that a 'fan' of his would actually deem him capable of doing a bitcoin giveaway? Almost certainly. You most likely wouldn't even believe this, verified or not, if it was a more 'reputable' CEO tweeting this.

- Current social media investing frenzy from stocks to altcoins to everything in between? The speed of social media, hype, buy and dump activism? People desperately trying to find their own 'opportunity' to strike gold? Imagine he wakes up the next morning, the giveaway was real, and what regrets would he have? Urgency forces stupid decisions.

I am not trying to attribute responsibility, but there are quite a few factors at play here, and they explain why he did what he did. Not trying to pass judgement on him, but at that very moment, he was a gambler, a speculator, not an investor or rational person. And then this happens. It happens to people in the financial industry all the time.

People simply don't know what due diligence is. If you don't know that financial advisors are supposed to be registered with government regulators, why would you go to verify them with that regulator?

If someone unfamiliar with the workings of the financial/legal system and the Internet goes to some website that looks trustworthy to them - looks like other websites they trust, has gushing testimonials, large numbers, and TrustSeal(R) graphics proclaiming that it's Guaranteed and Secured, and there are posts on Twitter and Facebook that say this site is trustworthy, and some blogger has also rated them highly... they may believe they've done their due diligence.

They're not a fool, they're simply uninformed, and they don't know they're uninformed, and they don't know they don't know they're uninformed. The information age is changing fast - it's pretty recent in human history that you have to distrust published writing as much as you do today - and some people are unable to keep up.

Some years ago there used to be this very popular scam in my country: you get a call from an alleged police officer,who explains that your daughter/son/cousin/whatever made a huge car accident and is about to go to jail unless it's 'resolved' with some money. So many people got swindled for absurd amounts of money. However one case stuck most in my memory: the police got called by a woman who was about to fall for such scam. Fast forward to the end and the journalist asks to tell what happened. So she gets a call from someone, saying her son is arrested for drink driving and causing an accident. He needs money for this to go away. The woman goes to the neighbor to borough the money and the neighbor seeing her in distress,asks for more details. Finally she tells the woman: you haven't got a son...

> with absolutely no due diligence

But due diligence was done here - the blue check mark was checked. The user checked other people were seeing success with this. The user probably double and triple checked the bitcoin address he was sending to. He probably looked for the padlock symbol on the site he was getting the details of the scam from. He might have checked his computer for viruses and been using a hardware wallet with a really long password.

He just checked all the wrong things.

All of those things are a good start but it is five hundred thousand dollars. It’s obviously a huge amount of money for someone like this. Why wouldn’t you check with your bank or a solicitor or the financial services regulator in your country before undertaking such a large transaction? The blue check mark just means they’re a celebrity, immediately dumping your life savings into something because the meme man told you to is a pretty foolish thing to do...

It was just bitcoin money. He never worked an hour on them. He lost $40k which was his initial bitcoin investment in 2017.

Actually, no. He didn’t even lost his initial 40k.

> He cashed out and got his initial money back, but then watched excitedly over the years as the 10 coins grew to be worth nearly 500,000 euros.

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