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- is there exponential growth still to go, so that we might expect $70bn lost in 2022?
- or is there a finite amount of victims to be scammed, after they've lost all their money the rate of scam will decline?
- or is it more likely that there will be some kind of intervention?
I really hate to say it, but I have little sympathy for the victims here. They wanted a moon shot, wild west, libertarian paradise and got ... robbed with no recourse. Many more than once.
I'm happy with my bank's fraud protection. How can crypto users protect themselves without recreating traditional banking?
Bitcoin was released ~13 years ago, and wallet/transaction security has been one of the most important requirements since then (along with scalability, but let's not go there). If trillion dollar market caps and god-knows-how-many billions of investment couldn't figure out how to protect consumers after 13 years...
Earlier quoted context omitted.
Are the scammers now in possession of $7.7B likely to "allocate capital in socially efficient ways"?
Perhaps more likely than the scammed. For example, the scammers may purchase equities.
-Gordon Gekko
I have zero sympathy for the victims. Stealing from cryptocurrency weenies is almost a public service, like confiscating booze and car keys from teenagers.
Unless something changes dramatically, DeFi will remain a haven for scams. It tries to mimic an actual economy which has loans to businesses to pay returns (etc), but DeFi actually is a giant circular digital economy which doesn't create real world wealth.
Isn't this true of the entire cryptocurrency cult though?
This is my biggest complaint against cryptocurrencies in general. I'm happy with my bank's fraud protection. How can crypto users protect themselves without recreating traditional banking? Bitcoin was released ~13 years ago, and wallet/transaction security has been one of the most important requirements since then (along with scalability, but let's not go there). If trillion dollar market caps and god-knows-how-many…
I often wonder to what extent scams like this have positive externalities, insofar as the people who get scammed were perhaps unlikely to allocate capital in socially efficient ways.
Interesting point. Would you rather have few unscrupulous, enterprising individuals have a significant proportion of wealth, or have this distributed between many people who are mentally challenged (easily conned)...
I think the biggest predictor for being conned is not low IQ but high greed.
The DotCom Bubble/scam led to investor losses in excess of $5 trillion.
That's reported as a drop from the peak. But it doesn't necessarily reflect the real losses, in terms of initial investment. It's a number larger than the total amount of "real" M0 money in 2000, for example! Feels more like "an unrealized gain that never materialized" than "loss".
I remember that time, it was just after I graduated. There was a lot of business craziness on a scale that defi is yet to reach, although it's already hit some of my peak markers like "rename a stadium".