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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?
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.
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...
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
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.
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.
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.
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!