Thank you for an honest answer. I've also observed that cryptocurrency enthusiasts have a orientation towards high-risk, which is a different mindset than most engineers who prefer reliability and predicability
I wouldn't say those risks are overlooked by most holders, rather that risk profile is exactly the reason why anyone would want to use cryptocurrency to begin with.
Perhaps some hype artists would claim otherwise, but they shouldn't be defining how you view the technology itself.
I don’t disagree with anything you’ve said but I do wonder whether the typical crypto “investor” does realize the risk. In many cases (like Tether, for example) I’m not sure the risk has been adequately disclosed prior to purchase.
Comparing an educated crypto investment with a negative EV gambling game seems a bit too farfetched. I'm quite considerate and picky investor, and did extensive research beforehand.
I do get what you are saying, but I think this is over-simplifying things. There were a lot of interesting facts and conclusions available to be made early on about the possibilities.
Again, extremely hard to say what the odds of failure still are and were in the past. And hard to say what my stance would be had I lost the initial investment. It's easy to rationalize the investment in hindsight.
I don't think people put money in these crypto high-yield investments because they love risk. The majority of people I have talked to were unsophisticated investors who didn't know what they were doing, and were under the impression that the investment was safe.
People in invest in crypto because the gains have been ridiculously good. However some people have lost their money because of bad security or scams. You can mentally it like, you invest $1000, plan to exist when the value hits 10x and have 5% probability of losing it all, you can calculate the expected value and decide if the risk is for you.
Better analogy would be "it is not worth living because you might die"
And this means ... What exactly? If it takes individuals willing to take risks then the crypto space has plenty of them. Are you saying that the point the authors are making is therefore not valid?
Engineers and technical people are cynical generally, but I agree. It comes out especially for crypto. Some of it could be jealousy. Watching “normies” make millions doing nothing more than buying early.
I have a very negative view of cryptocurrencies generally but I cannot imagine the anxiety and stress those in cryptocurrencies must feel:
- "Not your keys, not your coins" very frequently turns into "your keys, some scammers coins". Or "your keys, not your coins and no ones coins" when you lose access to a wallet by losing the private key, seed phrase, etc. Look around forums, subreddits, twitter, etc... These people expend tremendous amounts of time and energy just trying not to lose everything forever.
- Your other option is hosting them with custodians that have frequently proven to be anywhere from incompetent/reckless to outright criminals.
Time and time again individuals who are significantly more technical and astute than the general population STILL fall victims to both of these scenarios and many, many more.
Almost 15 years after the launch of bitcoin and at least tens of billions of dollars invested in development in the space there is still nowhere on the horizon any of this is ready for anything approaching mass adoption.
Other than the basic human trait of greed and gambling, get rich quick schemes, criminal and nefarious purposes, etc I have no idea how any of this is still a "thing".
Cryptocurrencies have two big "user' points which I believe drive all the adoption:
As an... investor, I want to ... participate in the high-risk/high-profit schemas that SEC would disapprove of; so that I... can gamble with my spare funds and potentially get very rich.
As an... a person with ideas, I want to ... be able to collect real money from general public without any enforceable promises; so that I... can become rich and not worry about being accountable for not delivering everything.
Engineers love to play devil's advocate. Now that the posts/articles about cryptocurrency are becoming more frequent, those dissenting opinions are also becoming more frequent.
I don't any cryptocurrencies, but my perception observing the field somewhat casually is that these kinds of discussion sometimes only appear to be about technical details on the surface level. In reality, one or more of people involved can personally lose a huge amount of money if a certain policy is or isn't adopted. For example, it's usually understood that the inventors of any particular cryptocurrency hold a large sum of "pre-mined" money, but somewhat taboo to state it because the appearance of a benevolent dev team that acts in the best interest of the community has to be maintained.
A lot of people are only interested in crypto-currencies for use in the black markets. While probably a majority here are more interested in them from a computer science or investing perspective.
This seems to be one of the better responses to my comment. Thanks. Some thoughts in reply:
1) People should be more hesitant to speak in absolutes. Unfortunately it’s possible that having a nuanced take is inversely correlated with the tendency to post noisy comments online. Maybe, regardless of the underlying stance of “most” skeptics, some more honest dialogue is warranted. Point conceded.
2. Hm. If that’s the case, the author’s assertion that most people who have been scammed are the kinds of people who fall for scams is fair, but not going to change many minds.
3. This is discussed ad nauseam below, so I’ll just add a reminder that we’re debating the author’s statement that “big crypto projects are very rarely scams” as evidenced by his google search. He goes on to say that “Crypto is a few hundred interesting projects, plus a long tail of thousands of scams.” So, most crypto projects are safe if you just ignore most crypto projects and only consider the most dominant. Realized losses vs unrealized market cap aside, the dynamics that incentivize that long tail of scams are worth worrying about in my view.
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