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April 25, 2014

Scams everywhere! Nobody cares, though.

Filed under: Uncategorized — @ 12:00 a.m.
Scams everywhere! Nobody cares, though.

I entered Bitcoin eyes-a-goggle, wet behind the ears, looking to meet cool people and build cool things with them. I'd yet to understand that one cannot trust someone one doesn't know, and that bitcointalk.org is the worst place to find trustworthy individuals with whom to conduct business.

I rapidly came to understand that the space comprised of people working on Bitcoin related projects was 90% flat-out scams, 8% 'legit operations'1 run by crazies/addicts/incompetents and 2% real businesses run by real badass humans.

That 2% would have nothing to do with me2.

So I lurked, per hanbot's advice, and read. Read and lurked. Eventually, I started chiming in on the #bitcoin-assets IRC channel3; picked up the variety speak; and began to obsess over the scammers who seek to part the rubes from their bitcoins. And oh my god are there a lot of idiots out there. Scams abound, certainly, but only because there are so many damn greedy idiots out there seeking alpha in all of the wrong places4.

Channel topic in late-2012 through mid-2013 focused on all the scams going on in every which direction and rubber-necking the crazy runup to what turned out to cap out ~1200. The Bitcoin Trading Company was still a thing (GLBSE 3.14), and I was amazed that the scams could keep pouring forth and that the suckers would keep showing up to drop themselves into the chumpatron. Mr. Popescu calls this the "infinite hitpoints" problem - a practically infinite number5 of idiots can sustain a small crust of scammers essentially indefinitely.

Eventually BTCTC shut itself down, and the fraction of channel time devoted to discussing and mocking scams dwindled down to a trickle. This left us with Havelock and their pretenses of due-dilligence6. Sometime after that (January 2nd 2014) I launched this miserable excuse for a blog and started an effort to catalogue the prior two years of scams on bitcointalk.org.

Quixotic damn mission. There are years of fraudulent insanity buried in that forum, and after two weeks of cataloging the madness had to take the project out back and shoot it in the head for fear I'd come down with whatever disease is infecting the brains of those who seek to throw their hard-won bitcoins at unknown entities across the internet. I politely bowed out and went on with my life, seeking to deliver value for clients and build things for myself.

Things I could spend my time on that would bring more direct benefit to myself than obsessing over cryptoscams:

  • build really high-end products for the cool people in Bitcoin who either are now or will be in a decade ultra wealthy
  • learn Ragel
  • formalize the cryptocurrency network protocol
  • move to Argentina
  • close more deals
  • have more sex
  • recruit more partners for sex parties
  • throw more sex parties
  • work out more
  • clean7
  • meditate8
  • go to a gay club9
  • start building the retreat

Besides, my goals for this blog thinger is to be a place of noodling on the topics of crypto, finance, tech and economics10.

Footnotes:

1

Okay, not intentionally scams, but still predictably money-losing operations. See Dr. Greg. Mulhauser for an example of well-intentioned overreachers broken on the wheel of Bitcoin.

2

One simply cannot trust people one's never met, much less individuals one's not interacted with over an extended period. Ideally people build things and deliver on their promises and this is how you come to build trust - when people say they'll do a thing and then do it.

3

Fast forward a year and somehow I talked myself into a barony. Likely 'talked' is the right description, as only Mircea Popescu himself regularly out-lines me in the channel (w/r/t actual 'writing', though, the man is an indomitable prose machine).

4

For some unknowable reason the first thing your typical idiot asks once they get their grubby little paws on some BTC is 'how do I get some return on this'? Well, you don't. You're lucky enough to be holding a bitcoin - don't get greedy. Ever heard the phrase "you cannot con an honest John"? It applies doubly to Bitcoin. Bitcoin's not making anyone else ultra wealthy in the next decade. That already happened in the run up from < 1USD to > 100 USD. The rest of the appreciation should happen slowly, over time. Any more bubbles aren't a sign that Bitcoin's arrived, just the sign of…another bubble. They happen.

5

Not literally infinite, but as far as the scammers are concerned the numbers of sheep to be shorn far exceed their ability to perform the shearing and so we have a practically infinite supply. Ideally, this fishery runs dry at some point in the future, but the continued existence and dealflow on Havelock and recently Counterparty (plus Picostocks…) doesn't suggest that this'll happen any time soon. Hence this post.

6

Havelock is the operation that let CaVirtEx walk with their entire IPO stash.

7

I fucking hate cleaning.

8

I really fucking hate meditating.

9

I don't actually hate gay clubs. Beautiful young men like myself drink for free there. Everyone's super handsy, but that's quickly resolved.

10

Solicitation of input: how would you explain the difference between finance and economics to your typical hipster girl with an Etsy store?

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