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So cryptocurrency is the new Gold Rush. As the story goes, the only people who reliably made money during the original gold rush was the people who sold the spades. What are the "spades" here?
https://www.thestreet.com/story/14190462/1/why-nvidia-and-am...
These and basically anyone supplying them like voltage suppliers (Vicor) or even the more basic materials like silicon wafers (Shin-Etsu Chemical).
So cryptocurrency is the new Gold Rush. As the story goes, the only people who reliably made money during the original gold rush was the people who sold the spades. What are the "spades" here?
They're raising ridiculous amounts of money on completely unproven markets, with unproven teams. These are mostly teams that would struggle to raise a tenth of that money with a traditional VC where they'd have to be accountable for their product.
I remember the .com-bubble; it kind of made sense that companies like Amazon were very valuable as they had the promise to transform whole industries. But this one; it is just stupid. Massive amounts of electricity and hardware wasted to keep a distributed ledger safe; an army of computer nerds facilitating fraud, narcotics sale and money laundry; and finally the bankers sensing bucks to be made on a large number of…
Well to me that sounds just like business as usual... Except now transactions are stored in a permanent decentralized ledger, unlike before. And also previously there less computer nerds and more bankers.
Who are these people spending real money in all these ICOs? Is this all just money made from bitcoin speculation being thrown around? Or is this real people spending real cash money?
So this is 2-tier: - "whales" (early adopters with tons of BTC) spend their BTC; - common folks believe in BTC hype, "invest" real dollars in the market and provide liquidity for ICOers. In the end the bubble bursts, "whales" don't loose much (only their BTC) and the common folks loose their "investments".
I remember the .com-bubble; it kind of made sense that companies like Amazon were very valuable as they had the promise to transform whole industries. But this one; it is just stupid. Massive amounts of electricity and hardware wasted to keep a distributed ledger safe; an army of computer nerds facilitating fraud, narcotics sale and money laundry; and finally the bankers sensing bucks to be made on a large number of…
However, I agree that almost all ICOs are cash-grabs. In my opinion we already have coins for all verticals that matter.
I wonder if this will end with people going to prison for securities fraud?
I don't think so. All the information is out there in the public domain; in fact, most cryptocurrencies are entirely open source so it couldn't be any more transparent than that. Everyone should be aware of the risk and the reward potential. If ICOs are a fraud, then surely our entire financial system is a fraud because there is much less transparency there. Right now a lot of people are making the mistake of investi…
When the bubble will burst, angry mob will look for someone to blame and politicians will look for initiatives to protect them. Decisions will be made, and laws enacted. This thing will be emotional, not logical.
So cryptocurrency is the new Gold Rush. As the story goes, the only people who reliably made money during the original gold rush was the people who sold the spades. What are the "spades" here?
ICO tokens. You describe an idea, provide no technical way forward, publish a token, and if you're lucky people start speculating on that token and you get crazy amounts of funding. Then just live on that money for a couple months before announcing that the project has failed, the tokens crash, if you feel nice you can buy them back at that point. I.e. the spades are the ICO scams.
Earlier quoted context omitted.
> Right now a lot of people are making the mistake of investing in an ICO that they don't understand enough. Like with any kind of investing; it's their responsibility to do their research. That's not how it works. Many kinds of securities can only be sold to accredited investors for just this reason; you may not like that law, but it is the law.
It's a silly law. The entire finance industry rests on the principle that well informed people are allowed to make money off of poorly informed people. I think ICOs are more fair because unlike in mainstream finance, there is much less information asymmetry because the code is all there for anyone to see. Anyone can access all the information they need.