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Comment by daenz | Hacker News Reader

>It was a cryptocurrency company, and it had been running for a while - but it didn't have a blockchain. "So we need you to build a blockchain," he went on.

I have seen this first hand, on a much smaller scale, at a startup that was riding the blockchain hype with investors. It is really incredible and eye-opening to me what you can accomplish with hype and trust, with absolutely nothing backing it. It makes you realize that it doesn't matter if what you build is cool or innovative, if you can't get people to trust you, it won't succeed.

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The only difference between selling bullshit and selling quality is that quality will get you more positive word-of-mouth advertising per sale. If you're selling bullshit, you need to either actively suppress the word-of-mouth, drown it out with marketing spend, or offer a cut of future profits (or something that looks like a cut of future profits) to buyers.

What about recurring customers? Clearly this is not the only difference.

This is very true for crypto. The amount of people hyped on it without understanding much about it seems crazy high to me.

Granted, I recently graduated college, so I may be bias from experience. I just have seen a giant amount of finance frat bros that pour money into Bitcoin cause “banks are like the horse and buggy”.

The amount of people that discredit it without understanding is also crazy high. Just because scams exist doesn't mean there aren't real projects and use cases.

…which are?

Name one.

Crypto is one huge scam and pyramid. Period.

USDC

So far, the only valid use case I've seen is buying or selling things on the grey/black market.

Remittance is a huge use case.

Remittance has (at least for me) become way easier in the last few years, using Wise (Transferwise) or even my own bank. The fees are smaller than I'd pay buying and selling crypto for way less hassle and price risk. Unless you mean circumventing capital controls, which is definitely a grey market thing.

Depends on the size of the remittance and whether the receiver is well banked, has photo ID and a smart phone.

You can send $50 via Western Union for $1.25, but it might cost 10x to 20x that in BTC transaction fees alone. The receiver can pick up cash at any WU location without an ID, but the last time I checked, to cash out cryptocurrency into a currency people actually use, exchanges require bank accounts, photo IDs and smart phones with cameras that can verify identities, and they charge their owns fees on top of the network's transaction fee.

> The receiver can pick up cash at any WU location without an ID

In which country does this happens? Makes no sense to me.

Any country, the sender just has to set a test question and the receiver has to have the transfer number and the answer.

Interesting. Not in my experience tho, I've sent money to 3 different countries and they all required the receiver ID

if there is forex involved WU takes a much bigger cut than $1.25. Tried to send $120 bucks the other day and it cost over $10 taking into account the lame ass forex rate.

Remittance to Mexico using a credit card is $1.25 and that pays out in MX$.

If you call cryptocurrencies pyramid and that implies scam, then you need to call a lot of other things scams as well if new money is paying out old money. This includes notably most of pension funds which are underfunded and underyielding.

Here is my post that has more discussion on the topic:

https://capitalgram.com/posts/history-of-cryptocurrencies/

Sam Altman (among others) is an investor in https://reserve.org/. Is that a scam?

Theranos had a lot of well respected investors too. It was still a scam.

This is an Appeal to authority fallacy.

There is an interesting use case, web monetization API.

https://webmonetization.org

It is a proposed standard (not accepted) that allows you to use micro-payments in crypto to pay for access to sites as you browse the web. While it isn't perfect, a web free of paywalls and ads is something I would pay for, if it was easy to use, secure, and integrated into the browser. I'm not sure it will have enough momentum to become a thing, but it is an interesting idea.

And, to your point, the only legit use case for crypto I have seen.

Ethereum? This is a pretty small minded view, considering the amount of talent and resources dedicated to building blockchain and crypto infrastructure.

I like the idea of distributed computation but I've not really understood a good use case for it. I know you can use smart contacts to make tokens and NFTs and what not, but that all seems like saying a thing isn't useless because you can use it to make stuff that is useless. It's not much of a use.

Do you have an example of something useful or valuable done with ethereum?

Entire financial system is a bigger scam and pumped by unlimited fiat printing that lend to certain people/banks/business at no cost.

What are you talking about?

They are an especially pathological manifestation of Buzzword Zombies who shamble around brainlessly suggesting use of their golden hammer in all contexts.

Actual finance graduated though? What the fuck were they doing in class all of those years to even think of the two as comparable?! For one let me know when I can get a mortgage or auto loan from bitcoin itself.

One thing I've noticed about the crypto crowd is many of them seem to genuinely struggle to differentiate a scam from a legitimate business. Some are obviously scammers, but others it seems they don't really know what they're doing... they think they're running a business.

Most of them would struggle to understand how the shit works as well.

Like with all businesses, there is a difference between failing for right reasons (tried hard, run out of runway) and wrong reasons (lied to the investors). Unfortunately unsophisticated investors do not understand the difference.

I have collected some of the cases and different points on my post here, including the infamous OneCoin:

https://capitalgram.com/posts/history-of-cryptocurrencies/

No wonder: there aren’t any legitimate businesses. It’s all speculation and money laundering. No other reason to not use real money

Con artistry is an old profession, this is just the modern take on it.

It's the Theranos approach. With a charismatic and strong character as founder you can build hype and get investments without even having a product. Being on friendly terms with investors also helps to establish trust.

Here is something which struck me as obvious yet would get furiously disputed: if you care about the charisma of a company head, or any other superficial aspect like City of London fashion etiquette you are being an idiot and are asking to get scammed by privileging what you expect to see above talent. It is what they do that is the important part.

Theranos desperately tried to build a product. They failed and lied about it. The plan wasn't to profit from the fake stuff and exit.

You're being too charitable to Theranos. Elizabeth Holmes was lying and faking almost from the beginning.

Let's not knock it, vast swathes of internet were built with hype money, if something is really novel, it takes a leap of faith to invest.

Not really. Government grants, paying telecom customers, ad buyers, porn buyers.

I think this is because "cool startup" works as a signal for speculation. It doesn't matter that there is no value backing it, investors have this unwritten agreement that cool sounding projects get investments and with money behind the project, it automatically becomes more valuable.

Theranos springs to mind. When you can dazzle enough rich people with FOMO over technologies they don't understand, it can be pretty easy.

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