The two necessary components seem to be novelty/hype and inscrutable inner workings.

The only difference is that with bubbles everybody buys into the delusion, whereas with scams at least those at the top are sane enough not to believe their own hype.

> Individuals who wish to transact in cryptocurrency

Excepts nobody transacts, everybody trades for capital appreciation purposes

But I wouldn't characterize all, or even most of crypto as scams. Gambling, maybe. Are memecoins a scam? I would say they're more like a massively multiplayer form of gambling. Which you might argue is a bad thing, and certainly is dubious from a social standpoint. But if the code is openly public and autonomous, and there's no outright deceit, I don't think gambling is really gambling.

Even beyond that, there's a lot happening in crypto that most certainly isn't scams. You have stablecoins and payment rails like USDC, stores of value like Bitcoin, smart contract chains like Ethereum, decentralized finance applications like permissionless exchanges and lending markets, social applications like farcaster, decentralized AI, and gaming.

Now you might argue that all of these things are stupid and pointless and wastes of money, but that's a separate debate. Of the large projects in these categories almost none are outright scams. They're teams experimenting with new ways to run financial markets or move payments or train models or hedge inflation. Like most technological experiments most will fail. But if that was the criteria for "scam" then the entire startup sector is also wall-to-wall scams.

Anyone who has spent significant time in certain corners of the internet has seen the high prevalence of get-rich-quick desperation in (some) cryptocurrencies. It repeats each cycle, but was at high intensity this year due to the low barrier to entry with BSC smart contracts. Anyone could create a PnD shitcoin.

All these scammers do is set up a nice looking website, fake some 'partnerships', then get influencers and spammers to put the word out. Once the scammers determine the market is at peak liquidity, they 'rug pull' by selling through all the liquidity, driving the price into the ground. Some rug pulls are instant, others are slow, to milk the buyers.

These scams are very common.. there are thousands of them. A lot of people willingly participate because it is possible to make some profit off suckers before the developers pull the rug. The profits are drying up as suckers are running out of money or are finally getting wise to the formula.

Despite how it sounds, I'm not in favor of regulation. I'm all for people learning lessons the hard way. I did at various times in my life and am better for it

For 3, I think his statement as written "big crypto projects are very rarely scams" is clearly not literally true in a meaningful sense, and it's right to criticize him for that. However, I think a weaker statement like "The people that complain that crypto projects are scams are overstating how dense the space is with scams" is probably more accurate.

It's sort of hard to determine how to weight an analysis of the density of scams in a space. Certainly if you weight by project count, it'll be quite high. If you weight by market cap, it'll be considerably lower. But to your actual point, I agree worrying about scams in crypto is very important, and I read the OP as (admittedly, somewhat carelessly) trying to argue against the view that "all" or "nearly all" crypto projects are scams.

I think a better way to state it might be something like: Post dotcom bubble pop a lot of people were saying "those internet companies were all scams", and they were right in some kind of media-attention-weighted sense, and maybe even some other senses. But there were certainly a lot of real and important companies there, and even a lot of near-real-and-important companies that were just a little ahead of their time and didn't make it, and I don't think it's fair to dismiss most of them as scams.

I'd definitely say crypto is still in the pre-making-it stage of its lifecycle, and it remains to be seen whether any of these projects will end up being say, the Google or Amazon of this space, that survives the winter and goes on to do meaningful things. However, even if they all die, I think it's fair to say that e.g. Ethereum and Bitcoin were sincere attempts at building novel technology.

Yes there are scams out there. Lot more than other fields. But just take 2 or 3 solid examples - Uniswap, DyDx, etc -> These are much more open and decentralized and transparent than their TradFi counterparts.

If you think Uniswap is a scam, you haven't looked into it yet. Yes the tokens that get listed on it can be scams but that's up to to the buyer to assume the risk. As a tool, it's so much more transparent than anything that existed before it.

You've posted a wall of text about how they enable scams and how the community is riddled with fraud and pyramid schemes. Guess what, I agree with you.

You accuse me of ignoring the cult-like behavior of the crypto community, when I am more familiar with it than anyone. But the behavior of a community has nothing to do with whether a network communications protocol is a scam.

You accuse me of "ignoring warning signs and dismissing criticism" when I am intimately familiar with the warning signs that many cryptos besides Bitcoin and Ethereum have, and I welcome criticism as long as it's not based on a foundation of misunderstandings of the technical workings of the protocol.

You accuse me of having a difficult time perceiving the pervasive fraud that's so stunningly obvious to everyone else. I am acutely aware of the pervasive fraud, but fraud being pervasive doesn't mean that the Bitcoin or Ethereum protocols themselves are frauds.

You know what else is riddled with fraud? The internet, the telephone, and originally the telegraph (leading to a whole new class of crimes called wire fraud).

But to pick at just one of the technical inaccuracies:

>Ethereum is ultimately a central platform, and the fact that a few dozen people need to sign off on every major change before it can be implemented is largely meaningless and symbolic, with the validation network ultimately sitting somewhere between consortium and cartel.

Ethereum has roughly 2,000 nodes, the operator of each of which must approve a change and manually upgrade, otherwise they continue to participate in the unchanged version of the network. In practice, this means that every customer-facing exchange, custodial wallet, and service provider needs to "sign off" on a change in order for the fork to be legitimized.

>The movement of Ethereum from proof of work to proof of stake has been vapourware

Ethereum's beacon chain proof of stake network has been running since November 2020 and has received its first hard fork upgrade, Altair. Currently, there is a public merge testnet named Kiln, the second testnet rehearsing the "merge" event where Proof Of Stake replaces Proof Of Work as the Ethereum execution chain's consensus model. The code is there, the network is there, and it's all running publicly. You can download the client software today from the public github repo and run it to join the network and help rehearse the merge, in a way that is very close to the final specifications. That's the opposite of vaporware.

> in no small part because the validators simply choose not to.

Moving consensus models is done by hard fork, it has absolutely nothing to do with "validators choosing not to." Think of it like the Ethereum development team, with the explicit permission of the exchanges and service providers, changing the direction of a firehose to point at the PoS validators instead of the PoW validators. The PoW validators can't grab on to the stream of water and wrestle the hose away, their income stream just vanishes.

Those are 2-3 examples of technical inaccuracies. More technical inaccuracies in that video surround the characteristics, economics, minimums, and protocol liveness guarantees for Proof Of Stake, the nature and maturity of protocol scaling, the nature of bounded historical data size, and the nature of network congestion (it does not in any circumstances lead to forks, that's complete bunk).

If I chose to indulge your shotgun approach, we'd both be here all day and I don't really want that. This comment is already getting long and took a lot of effort for me to write up. Most of your copypasta can be summed up as problems with the community, not problems with the network protocols themselves.

I'm not here to try to convince you to like cryptocurrency, you're free to hold whatever opinion about it you want. It just really annoys me when people spread misinformation about how the protocols are constructed, and try to characterize them as scams when they are nothing more than distributed database software.

Your argument is: because a ton of people have put a ton of money into it, that proves that it's a scam?

So the stock market, which has a much bigger market cap is therefore MORE of a scam? What are you trying to do here?

Yes, people pouring their savings in tulips, fake railroad companies, and beanie babies is absurd. Does it follow that tulips, railroad companies, and baby plushies are scams and criminal in nature? The grifters and their victims moved on, and the underlying objects of speculation seem to exist and do their respective jobs just fine now.

Crypto is doing its job just fine of being a trustless and permissionless way of transferring value. It doesn't care if grifters hype, pump, and dump its tokens. The few actual decentralized networks in existence just keep running and securing their immutable ledgers. The few actual peer-to-peer researchers and developers keep improving them.

Don't let these small bumps distract from the greater picture and all the amazing work the developers at Ethereum, Bitcoin etc are doing.

stay away from all of it.

I think people need to know that no one is going to help them - caveat emptor. If the goal of crypto is to rebuild finance, eliminating taxpayer funded bailouts is a top priority.

has the same dynamics like the crypto world even, with it promising in a sense to create value out of nothing by just holding on long enough and spreading the gospel