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Comment by beaconstudios | Hacker News Reader

I honestly think you'd be hard pressed to find a crypto business that isn't rooted in some kind of scam, greater fool scheme, pyramid scheme, or the like. The whole industry is a mess.

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And you think this on what basis? Engagement with the space, or your emotional knee jerk reactions to the occasional headline you read?

This comment comes across utterly unserious.

Based on both my observations of the space and interaction with crypto people and the crypto market. I know people who work in crypto too.

Your defensive kneejerk reaction doesn't serve as an opposing argument - if you think differently, all you need to do is provide some evidence.

I mean, most legit exchanges are not 'rooted' in scams, even if some of their employees take advantage. The only way you could say Coinbase were 'rooted' in that is to assume your premise: that crypto itself is a scam.

I don't think most exchanges are rooted in scams no - I'd say they're rooted in a greater fool scheme, given that the main purpose of buying crypto is to sell it for profit and it isn't really used for exchange outside a few niches like darknet markets.

Then I think you are assuming your premise/begging the question. You constructed the conditions in a way that leaves no room for a valid example. If you think crypto itself is a greater fool scheme then purely definitionally there can be no example of a non-greater-fool-rooted crypto business.

This is what I've observed, it's not a prima facie assumption. I was initially optimistic when bitcoin came about. Most of the industry seems to be based on speculation and selling "x but on the blockchain" solutions to nonexistent problems. I also know people who are trying to use blockchain tech to solve real problems, but they're in the minority.

I'm not sure either of your comments are productive here. You assert that it would be hard to find any crypto business that isn't 'rooted in some kind of scam'. But where's the evidence that coinbase for e.g is 'rooted in a scam, greater fool scheme or ponzi'? There are scammy activities in so much of crypto, but what is pointing to the most visible, normie-facing, publicly traded and regulated American crypto company, being 'rooted' in scamming or ponzi schemes? Because this post suggests a bad actor within or close to the company, or at worst the company knowingly associating with sketchy tokens, rather than the entire company's activities being fundamentally rotten. I know HN likes to be extremely skeptical of crypto, often rightly so, but your comment isn't exactly nuanced.

I did address this in a sibling comment - the exchanges are primarily used to buy and sell crypto to greater fools, and thus they are rooted in a greater fool scheme. The vast majority of use for crypto is speculation.

But you see, even if I did agree that that was the case that all exchanges are rotten, you originally said any crypto business. You think the various businesses that focus on staking, or cold wallet businesses for example, that focus on consolidation and/or security are 'rooted in scams, greater fool schemes, or ponzi'? How?

Perhaps my original formulation was insufficiently precise to get my point across - I mean that crypto is rooted in scams and pyramid schemes and whatnot in the sense that the nature of the industry makes it a magnet for those kinds of schemes and they are the primary driving force behind the money flooding the industry. That doesn't mean that the exchanges themselves are explicitly doing these things, or that all the businesses are either directly engaged in or materially supporting this behaviour (though I think the majority are), but that it's the driving force of the industry in that transportation drives the oil extraction industry.

I assume the vast majority of crypto is actually Bitcoin and Ethereum. Do you characterize these as "speculation"?

I think most transactions made with those coins are speculative, yes.

Well yeah, I think that most transactions will behave the purpose of active trading, because hodlers aren’t making transactions.

However if you look at the volume traded, versus the total market, I think you get a different picture.

HODLing is also speculation. I'm saying that crypto isn't driving useful economic activity like investing in startups or small businesses can do. It's all just people trying to make money by finding a greater fool. Even speculation in a normal market can drive /some/ innovation through capital allocation.

Defining a multi-year buy & hold strategy as speculation doesn’t sound like something I can get behind. I get what you’re saying, but I think you’re making sweeping generalizations here. There’s plenty of people that invest in useful economic activity, but also save some money in other assets like gold and bitcoin. You are just calling these people speculators hoping for a greater fool?

Or is it possible that these people have grown to trust bitcoin, seeing it as a savings vehicle outside of the usual currencies?

I'm glad you understand what I'm trying to say, even if "speculation" isn't quite the right term for it.

I think scams are an obvious harm, but the highly financialised and speculative nature of crypto is a more subtle harm: most investment produces positive material side effects like products or services, but because the main selling point of crypto is to continually pass it around in a circle, a lot of money, time, and expertise is wasted on something that is completely unproductive. To be fair, I think this criticism mostly applies to Wall Street too, but most people no longer try to argue that Wall Street is a source of meaningful innovation. To say nothing of the proof of work model leading to ever increasing energy consumption during climate change.

I just don't see much real upside to the crypto industry, and quite a lot of downside.

> find a crypto business that isn't rooted in some kind of scam, greater fool scheme, pyramid scheme, or the like.

> If you think differently, all you need to do is provide some evidence.

So is this product a 'scam' then? [0] [1]

[0] https://skiff.org

It doesn't look like it, no. But what about that is actually using blockchains to solve a problem? They mention Web3 but I don't know if it's a requirement of some feature or an opportunity for a marketing buzzword.

I don't deny that there are some companies that are trying to do real things with blockchain tech - but most of the money and effort appears to be going into speculation and/or scamming. Which isn't very productive.

Thanks, that looks interesting, but I don't see the connection to "crypto", except it being encrypted, laudably.

"That which can be asserted without evidence, can be dismissed without evidence." (Christopher Hitchens)

You made the assertion, you claim to have evidence: the onus is on you to provide that evidence, otherwise how can anyone possibly challenge it?

I don't claim to have the evidence, I claim to have made an observation. If the parent wanted to make a counterargument they could do, it wouldn't have to be concretely evidence based because I'm not holding a forum conversation to the epistemological standard of a formal paper or proof. Just a good example or argument would be more compelling than just calling my opinion a kneejerk reaction.

Maybe if you throw some more big words in, you will get your point across. Following this thread it is pretty evident that you don't have any evidence for your "all crypto is scam", and are pretty lost when asked for proof.

OK then, I assert that Beacon Studios is a company to be avoided because the management is incompetent.

My evidence is that the founder is a hothead who wastes his time leaping into online flame wars with little understanding and no evidence.

Can't you understand that this mode of discussion is totally unproductive?

Why would you make a personal attack based on a discussion about an industry? I didn't think this was a flame war, more a discussion about the crypto industry - I'm not upset, I'm just bored because I'm stuck in hospital with little to do. This is a tech forum, so is it not the right place to discuss tech industries and opinions thereof? I'm not even in the minority in thinking the crypto industry is unproductive and largely centered around scams and greater fool schemes.

I'm not sure what your personal attack has to do with this discussion - I guess you could have that opinion if you wanted.

> I guess you could have that opinion if you wanted.

Yes, and that opinion of mine, WITHOUT USEFUL EVIDENCE, is worthless. It's no benefit to this community

That's exactly my point, this mode of discussion is totally unproductive. It's spam. It's just tribal ranting.

Sorry to hear you're in hospital. Hope you're feeling better soon

I guess that depends on the point of the community - to my understanding, the point is to discuss. Reasoned discussions are based on arguments and observations, not just evidence and citations. I don't even know what kind of evidence you can bring up for something of this scale - it's not like the are metastudies on where people allocate capital within the crypto market, and what the outcomes aside from wealth transfer. It's a more systemic thing.

I don't even understand how people can argue against this. Do you have the perception that most people are buying coins for reasons other than to sell them again for profit? The only types of studies I find are self-referential in that they report on market size.

The reason I discuss the subject at all is I'm hoping that one day somebody gives me the piece of information I'm missing that shows that the crypto industry isn't just everybody trying to get rich while burning tons of fossil fuels, that there are reasonably positive outcomes from it. So far I just get a lot of angry reactions and accusations of having no proof, despite this not being a court case. Like, show me something good that's been made because of crypto! It's the easiest argument in the world to win.

You asserted comically sweeping claims about an entire industry and nascent family of technologies being solely rooted in “scams” and “schemes”.

Those two words usually have a higher burden of proof… unless you’re just putting on a rhetorical performance, that is. QED “unserious”

Are there a lot of businesses in the space not attempting to service lots of new coins that are generally characterized by lack of novelty, lots of marketing fuel, or where if there is novelty vis a vis cryptocurrency, it isn't highly questionable?

For better or for worse, it seems the case that most businesses in the so-called cryptocurrency space are working with some pretty dubious "assets" with some pretty dubious backers, which would make your parent comment pretty accurate.

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