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Wolf of Wall Street: Cryptocurrency ICOs Are 'the Biggest Scam Ever' (betanews.com)
An anonymous reader shares an article: Jordan Belfort -- the real-life Wolf of Wall Street -- has warned that ICOs (or "token sales" or "coin sales") are "the biggest scam ever" and will "blow up in so many people's faces." The former stockbroker, who spent nearly two years in prison for fraud and financial scams, says that the Initial Coin Offerings used to raise money for cryptocurrencies are "far worse than anything I was ever doing." His fears seem to stem from the way ICOs differ from the more traditional IPO. With IPOs investors gain shares in whatever company they plough money into, and profits can be easily shared. With ICOs, however, there is no mechanism in place for distributing any profits that may be made, profits are reliant on the value of a given cryptocurrency increasing and, perhaps more worrying, ICOs are not regulated in the way IPOs are. Aside from the fact that some ICOs are out-and-out scams, many people believe that the cryptocurrency bubble is just that -- a currently growing bubble that will eventually pop, leading many people to lose out.
I live in Puerto Rico. I have most of my worth stored in cryptocurrency (BTC). Now I cannot access it and even on those rare occasions I am able to like today, it does me no good - there literally is nothing I can do with it; nobody accepts it, I cannot eat it, it's worthless to me. Doing this was probably the worst decision I ever made and I urge all people to think twice about converting their hard earned money to bits and bytes because it is a large question whether it will be there for you when you need it.
He's 100% correct.
ICOs and their older siblings "premines" are a true mark of bullshit. When the Ethereum bubble pops, almost every single altcoin (i.e., all cryptocurrencies other than Bitcoin) will crash and burn overnight. In the Bitcoin world, currencies with a significant premine were universally known as scam coins. In essence, the creators of the currency decided to print themselves tons of free currency before opening the doors to the public. ICOs are a similar deal. It's like buying stock in a company that doesn't exist. Most commonly, they're an extension of Ethereum and are a mountain of nothing, pegged to nothing, and sold for real money or Ethereum (which is quickly sold for real money).
Setting up your own ICO for some token running in Ethereum (along with a shitty site that does nothing but let you send those tokens to other idiots in the ICO) is a turnkey operation, which is why they're so prevalent.
When people point out that "fiat" currencies are only backed up by government promises, they forget to note that cryptocurrencies are only backed up by "fiat" currency
This is not right and shows you never took an economics class. I'll try to explain it for you briefly, but you should know it is nuanced and complex.
No currency has innate value, including gold. If "innate value" determined the price of an object, then people would be paying a lot for air, because it's as valuable as life itself.
The value of a currency is determined by what people are willing to pay for it (again, just like anything). If no one is willing to pay more than $10 for an ounce of gold (for example, if the world collectively realized wedding rings are stupid), then that's its price. If people are willing to give you $5000 for a single bitcoin, then that's its price. In other words, Bitcoin is backed by what people are willing to give for it, not by fiat currency. You can exchange Bitcoin for pizza or for hotel bookings.
The price of bitcoin isn't based on "how much 'real' money people have put into it." Bitcoin (and stocks) are not a bank account. The price is determined by what people are willing to pay. Assume for a moment that the bitcoin bubble crashes: in that case, its price could drop to $0 without a single person withdrawing money from it. No one will be willing to buy them. Likewise, the price can jump dramatically in the same manner.
"First they came for the slanderers and i said nothing."
BTC and cryptocurrencies are relatively new, shiny, and edgy. The problem is that there are tiers of currencies:
At the bottom tier are items that can be used and traded. Ammo is the ideal currency in this department, since it is fungible (for the most part, assuming factory stuff.)
Once there are some laws or governance in place to minimize cheating, precious metals come to mind, as they have intrinsic value.
From there, pieces of paper that can be redeemed for precious metals, so one doesn't have to carry currency around.
Once you get stable governments, fiat currency becomes possible. This allows for capital to expand.
After you get stable governments, good communication world-wide and solid storage, cryptocurrencies can be used.
However, like Mazlow's Pyramid, if something happens, like communications or power going out, the currencies that are higher level will wind up being useless.
Exactly.
There's nothing wrong with blockchain technology being used in public share offerings. In fact, ICOs could eventually become a replacement for current equity funding methods.
But as practiced today, they are totally scammy. Unlike stock offerings, coin offerings are almost completely unregulated- owning a coin doesn't confer any rights or protections to the owner akin to share offerings. They have a lot of appeal to the entity making the offering, but I don't see what they offer to the investor. They are like a penny stock offering, but without the protections of SEC oversight and a bunch of tech smoke and mirrors to attempt to make up for that.
But society has a surplus of gold. Industrial uses are a fraction of the total supply. Most gold is either used for jewellery or locked up as an investment.
https://static.seekingalpha.co...
The real "Libtards" are the Libertarians!
Invest in a cryptocoin, then you're not really "investing", but you're speculating, gambling, etc.
Speaking as a hodler of coins, I agree -- it is speculation. I make no bones about that. I put in what I could afford to lose, and I know I might lose it all.
That said, if I'm honest, the stock market is pretty speculative in its own right. Maybe worse.
People who say "sheeple" have about as much sophistication as an AOL user, and in fact are probably actually AOL users.
There IS a law that you must accept U.S. dollars to satisfy a debt in the U.S. That doesn't mean you can accept only U.S. dollars. It doesn't mean you have to agree to a new transaction in u.S. dollars (since no debt yet exists). It doesn't fix the value of a dollar, but if I owe you a cow, and I offer you the current market value of a cow (delivered) in dollars, you MUST accept it and consider the debt paid.