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Comment by kristianc | Hacker News Reader

I’m not sure why there is such fascination with this tech when it’s complex to understand and implement, prone to break in a thousand different ways, and has an ecosystem which is absolutely crammed with bad actors. This requires a deep understanding of cryptography to even understand if you’re safe. Why do people take the risk? Is it because they like to feel smart?

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Crypto has a one-two punch that causes it to really stick tight in some minds: it's a get-rich-quick scheme (and those have a long history of bypassing the rational parts of the brain), together with ideological appeal: it feels like you're striking a blow against the Man (even though in practice all crypto goes through a small number of centralized actors that the Man can shut down any time he likes).

> Is it because they like to feel smart?

I believe that that's actually a big part of it. Many people have a desire to be (or at least feel) smarter than the average, to be ahead of the curve.

Cryptocurrencies, and its marketers, sit in a particularly effective sweet spot of finance- and technobabble (with a sprinkle of defiance of authorities and the status quo on top), catering to that desire.

Do you have a deep understanding of how the stock market works?

I understand that anything I buy is backed by ownership in an institution, that there are onerous regulatory and reporting requirements, centralized institutions managing it, ample liquidity if I want to get out at any point at that people get sent to prison if they try to manipulate it…

Is that a no?

You are asking the wrong question.

"Do you have a sufficient understanding of stock markets?"

For most people that's a "yes". They know what stocks are, what they represent, who the big players are to buy stocks on your behalf, and can be assured that the money is going to get to the right place.

This is just not the case for crypto (yet), not remotely. Tons of tech people hardly know how these things work.

> You are asking the wrong question.

I'm responding to the way the op phrased their initial statements. They implied that just because they did not have a deep understanding of something, it must be bad.

Crypto is something for them that they don't understand, just like the stock market is something that many people also don't understand.

In the stock market there is a long history of regulatory protection of unsophisticated investors, starting with the Securities Act of 1933 and Securities and Exchange Act of 1934. The whole point of these acts is to protect unsophisticated investors so they can invest in the stock market without fully understanding the details of how it works.

Given that another large bank just failed, you could have picked a better day to say that.

Having known the space since 2011, I’d say there are different reasons for different types of investors who came at different waves.

- super early stage: curiosity + belief this could replace money as we know it

- early stage: speculation + elements of previous wave

- 2017-onwards: a mix of speculation++, a lot of ignorance, and the mass wanting to be “a part” of a technological future they often feel left out from + the quasi constant FOMO many experience when realizing they could have invested in FB, AMZN, APPL but didn’t. And many disingenuous (or delusional) crypto evangelists manipulating that FOMO and convincing people this is the next big financial movement of the century.

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