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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.
Seems like there are a very few worth currencies and the rest are Me-Too currencies that are only out there for pump and dump.
Really the only worthwhile currencies are those that you can use with a legit bank or a retail store. Anything else, buyer beware.
A crypto currency is a very convenient way to store and move money. Banks will charge 5% or more to convert your money from one currency to another and wire transfers are a pain and usually cost $10. Other money transfers often come with 1 or 2% fees and banks in some countries are corrupt and incompetent. Crypto currencies could replace a good portion of M2 since they work better than most traditional money. M2 world wide is equivalent to almost 30 Trillion USD. One day one crypto currency will likely approach this amount.
ICOs are a scam. They replace shares but are inferior in almost every way except they by-pass the traditional stock markets. (I suppose some conspiracy people might think this is a good idea). ICOs also don't allow high frequency trading since trades can only take place as fast as blocks are added to the block chain and buried to a sufficient depth to be trusted.
Not all crypto currencies are created equal but common sense hints that most of them will certainly pop because obscurity will kill them: 1192 are far too many.
Because a scammer knows a scam when he sees one.
Why should we listen to you instead? What are your accomplishments?
Think again Potsy. FTA:
"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. "
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.
I've heard the arguments for Bitcoin and against. In theory, Bitcoin has no controls on it and is suppose to be allow you to make anonymous transactions. Which is curious because our normal physical currency was essentially like that at some point too but as society grew up it became more regulated and stable to try to help people. Then when that illusion blew up multiple times due to scams, fraud and use for mostly illegal activities, the other massive argument was there was a lot of money to be made. Usually in life if there's a lot of money to be made there's a lot to be lost as well. Money isn't magic, there needs to be some give and take. My opinion is if you want to gamble your assets on Bitcoin, go for it but realize at the same time that it could just as easily blow up in your face and when it does there's no one to provide any sense of a safety net because that's what you're going for. I won't touch it for that reason but there are many that will.
It's not the technology that makes it a scam, but the economics behind it. He's mostly pointing out the issues with ICOs: no oversight, no"coinholder" rights, and no regulations, which make them a powerful magnet for all manner of scammers.
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
What "hate" are you speaking of? Is fact "hate"?
Do you disagree with this statement:"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" and if so, why?
Do you disagree with the fact that bitcoin is a huge speculative bubble? If so, why?
Or are you a bag holder who doesn't like it when people mention your bag may be empty at the end of the day?
I got a message on social media from a long time friend. We've been friends since elementary school. He's an educated man but somehow, someone got their hooks into him with regards to some new crypto coin offering. He was trying to convince me to go all in on it with him. I'm sure that he believes in this. I hope I'm wrong about it but the whole deal doesn't smell right.
The website he directed me to visit for more information consisted of a hosted blog page that was exceptionally light on details of the crypto, the infrastructure and the people behind it.
Crypto coins seem to be becoming the MLM of the next decade.
LK
"Hi. This is my friend, Jack Shit, and you don't know him." - Lord Kano
Do you disagree with the fact that bitcoin is a huge speculative bubble? If so, why?
I disagree Bitcoin is a speculative bubble, and invite you to show material evidence that it is one, or that about $6000 USD per BTC is not about right as a price for this asset.
^^ THIS.
Main St. built America.
Wall St. robbed it.
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.
I have zero sympathy, especially given the amount of warning these people have had.
Agreed. I was fairly warned that Bitcoins were overpriced when they reached $1, again at $100, again at $1000, and finally when they recently crossed the $5000 mark. I have no problem with your lack of sympathy for my predicament.
Ohh you got me there. Just because bitcoin looks and acts like every speculative bubble ever doesn't mean it is one, right?
A good rule of thumb for what is a speculative bubble: When the value of something dramatically increases without an answer to the question, "why". (aside from the below key factors in a speculative bubble):
Displacement: A displacement occurs when investors get enamored by a new paradigm, such as an innovative new technology or interest rates that are historically low.
Boom: Prices rise slowly at first, following a displacement, but then gain momentum as more and more participants enter the market, setting the stage for the boom phase. During this phase, the asset in question attracts widespread media coverage. Fear of missing out on what could be an once-in-a-lifetime opportunity spurs more speculation, drawing an increasing number of participants into the fold.
Euphoria: During this phase,caution is thrown to the wind, as asset prices skyrocket. The "greater fool" theory plays out everywhere.
Valuations reach extreme levels during this phase.
During the euphoric phase, new valuation measures and metrics are touted to justify the relentless rise in asset prices.
Profit Taking: By this time, the smart money – heeding the warning signs – is generally selling out positions and taking profits. But estimating the exact time when a bubble is due to collapse can be a difficult exercise and extremely hazardous to one's financial health, because, as John Maynard Keynes put it, "the markets can stay irrational longer than you can stay solvent."
Panic: In the panic stage, asset prices reverse course and descend as rapidly as they had ascended. Investors and speculators, faced with margin calls and plunging values of their holdings, now want to liquidate them at any price. As supply overwhelms demand, asset prices slide sharply.
I'm not hating on bitcoin and actually think it will open up some new avenues to challenge the credit card companies to be more competitive but the irrational exuberance sucks people in and it hurts them, especially when highly speculative vehicles like ICOs are looking to cash in on it.
they mean value besides the currency. Gold has 'innate' value because gold is in and of itself valuable. Yes, that's probably not the strict definition of 'innate' but it's understood to be what people mean.
Air isn't valuable in that fashion not because it lacks value because it's too common. If gold were as common as dirt it would lose much of it's innate value.
The value of a currency is determined not by what people pay for it per se but what you can buy with it. The 'Big Mac Index' comes to mind here. We moved to fiat currencies because our economy out grew the gold standard. We had more economic activity than we had gold to back it. It was holding us back.
The price of bitcoin is largely based on what you can buy with it. It just so happens what you buy is kinda shady. Drugs, ransomware payments, money laundering, gambling, etc are driving up bitcoin's value. This works because those things have very little cost but a high value because they're illegal. This is true for all the big crypto currencies.
Basically, the price of bitcoin will drop when the thing underpinning it drops. Just like Zimbabwe saw hyper inflation when their country went to hell you'll get the same thing with bitcoin (but in reverse since you can't just print more). The underpinning is basically crime. Eventually the government will crack down and that'll be that. Or worse they'll legalize drugs and gambling. Either way bitcoin's days are numbered.
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Gold does have innate value. It is a rare metal with many desirable qualities.
No, you are wrong. It is your desire that gives it value. You desire those qualities and are willing to pay for them. If no one is willing to pay for them, then it has no value (not many years ago, no one was willing to pay for the conducting properties of gold. If a better, cheaper conductor gets invented, again no one will care).
Again, you have not taken an economics class, it shows, and by posting you have become a personification of this comic.
"First they came for the slanderers and i said nothing."
Bitcoin and its associated ilk are going to come back and chomp some people in the ass. It's one big giant bubble and when it bursts, who knows what financial ruin will face us.
Invest in the stock market, and you become a fractional shareholder in a real company. If the company does well, you do well, it's joint ownership. Invest in a cryptocoin, then you're not really "investing", but you're speculating, gambling, etc.
Says a guy who can't figure out how to log in to Slashdot. I know that it doesn't matter if a criminal or "non-criminal" says it ... neither of you knows the answer and are just as far off base as anyone who says the opposite. Time will tell, and ONLY time will tell.
Guns don't kill people; Physics kills people! - John Lithgow as Dick Solomon on Third Rock From The Sun
Agreed. I was fairly warned that Bitcoins were overpriced when they reached $1, again at $100, again at $1000, and finally when they recently crossed the $5000 mark. I have no problem with your lack of sympathy for my predicament.
Agreed. I have a shulker chest with three and a half stacks of diamond blocks, inside an ender chest. I have no problem with anyone's lack of sympathy for my predicament.
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!
Sure, they can work if they stay reasonably stable, because there actually is real work necessary to produce more "coins" and they can be used for other purposes than speculation. But as soon as the value fluctuates wildly (as Bitcoin does at the moment), they become unusable for anything except speculation and then they turn into a game of chicken and will eventually crash, just like a pyramid-scheme does.
The main reason to back a currency (or stocks) with something solid is to prevent wild fluctuations and to make it something that can be used to store value and to exchange in trade.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
You don't see the problem with that? Good currencies are not supposed to rapidly change in value over a short period of time. And if Bitcoin is not a good currency, then what is the value proposition?
The people who manage to "find speculative bubbles everywhere" don't really count; for every
"housing bubble" they successfully saw, there were 1000 things they saw overpriced or bubbles that never saw any kind of crash.
What you don't see when there's a real bubble is multiple figures recognized by the industry as public calling it out clearly as a bubble and taking the risk to make a concrete prediction about what approximate percentage of a price crash is overdue to below the day's level --- when you have multiple professional analysts saying that kind of thing it means probably the market has taken that into account, and as we know, the markets are loss-averse, so whatever the "bubble" was is likely dead by the time that happens.
Media commentators on CNBC, on the other hand..... they're constantly forecasting crashes whenever prices are going up: even a broke clock is right twice a day, the journalists aren't credible voices even to consider ---- they don't put it on the line and make specific falsifiable predictions or stake their reputation on their record of accuracy of predictions, either.