Avoiding being scammed in ICO “pump-and-dump” schemes • Hacker News Board

Re: Avoiding being scammed in ICO “pump-and-dump” schemes

#41

Post by kfk » Mon, Aug 28, 2017, 3:15 PM UTC

toast0 wrote: post #23

kfk wrote: post #2

I wonder if there is an opportunity here for an unbiased certification process that ICO founders can request. Sort of like a Morningstar rating.

Here's my unbiased certification: I hereby certify that all of these ICOs are crap. The world doesn't need another highly frothy 'currency' with no underlying value, whose only useful properties are some famous dude (or some guy on YouTube) says it's cool and you can think you'll get in early like when you missed out on Bitcoin or whatever.

What's the point of this comment? You know, this is exactly the same attitude every MBA suit has towards any new startup, until it's successful of course, then it starts praising them.

Re: Avoiding being scammed in ICO “pump-and-dump” schemes

#42

Post by notahacker » Mon, Aug 28, 2017, 3:16 PM UTC

api wrote: post #26

sodafountan wrote: post #19

Ah the dot-com bubble 2.0. I think it'll go down in history as the crypto-crash because that's cool to say. But seriously this is exactly what happened in the late 90's during the rise of the web. There is real value in Bitcoin, there is real value in blockchain technology. There probably isn't any value in PETCOIN or AOLCOIN if you catch my drift. Smart investors who can stomach risk can make a lot of money over the…

No, this is substantially worse than the late 90s. In the late 90s there were a lot of very premature IPOs and a lot of money raised for bad ideas, but very few of them were total cranks or scams. I could in fact buy pet food on pets.com-- it just wasn't a viable business and wasn't well executed. The CueCat was a horrible business idea but CueCats actually did exist and you could in fact use them. (I used to have on…

The other key difference is that the 1990s startups were for the most part aiming to take advantage of a novel form of distribution rather than a novel means of fundraising.

Even though many of the nineties startups lacked the skill or timing to execute it, the advantage of replacing catalogues or human agents already using computerised reservations systems with an always-available, easily-updated website was huge, obvious and real as was the size of the future online advertising market. So there was every reason to believe that some internet companies would eventually become huge. By contrast, many ICO startups boast no tangible advantage or difference over the existing congested and conventional markets they purport to serve except for a novel funding method which allows their investors to trade any oversight or traditional legal recourse against the company for a theoretically liquid market to dump the "coins" in if the founders don't even attempt to deliver...

Re: Avoiding being scammed in ICO “pump-and-dump” schemes

#43

Post by snarf21 » Mon, Aug 28, 2017, 3:17 PM UTC

api wrote: post #20

coolio222 wrote: post #8

A pump-and-dump scheme drives the price up by promoting the commodity only to allow insiders who bought it earlier to sell when the price peeks just before the the price plunges again. You can easily see it in penny-stocks and/or OTC-stocks. The price stays flat, then peaks, then crashes to about the pre pump-and-dump price. I haven't seen such a behaviour in any of the new coins. Does anyone have an example or link…

The scammy ICOs (which is most of them) aren't really pump and dumps. They're more like variations of the "big store" and other phony front investor scams. It's more like outright stock fraud. They're selling shares in something that doesn't exist and isn't going to exist.

I think this is biggest difference. Selling things that there is no real intent to actually make the systems. The other issue is that a real company could get sued and you'd be able to track the real assets bought with the ill gotten gains. With these ICOs, I'm not sure how you track the money to even know who to sue.

Re: Avoiding being scammed in ICO “pump-and-dump” schemes

#44

Post by cshenton » Mon, Aug 28, 2017, 3:17 PM UTC

sodafountan wrote: post #19

Ah the dot-com bubble 2.0. I think it'll go down in history as the crypto-crash because that's cool to say. But seriously this is exactly what happened in the late 90's during the rise of the web. There is real value in Bitcoin, there is real value in blockchain technology. There probably isn't any value in PETCOIN or AOLCOIN if you catch my drift. Smart investors who can stomach risk can make a lot of money over the…

When it comes to a name for this whole situation, I always liked the image of 'cryptographic tulips'.

Re: Avoiding being scammed in ICO “pump-and-dump” schemes

#45

Post by benchaney » Mon, Aug 28, 2017, 3:20 PM UTC

sodafountan wrote: post #21

Apreche wrote: post #4

How to avoid being scammed: completely ignore the world of "coins" and other nonsense.

That's akin to saying in order to avoid the dot-com crash you should avoid the web in 1997.

That would have been excellent investment advice in 1997

Re: Avoiding being scammed in ICO “pump-and-dump” schemes

#46

Post by Rmilb » Mon, Aug 28, 2017, 3:21 PM UTC

Kalkaline wrote: post #39

sodafountan wrote: post #19

Ah the dot-com bubble 2.0. I think it'll go down in history as the crypto-crash because that's cool to say. But seriously this is exactly what happened in the late 90's during the rise of the web. There is real value in Bitcoin, there is real value in blockchain technology. There probably isn't any value in PETCOIN or AOLCOIN if you catch my drift. Smart investors who can stomach risk can make a lot of money over the…

I still haven't seen a situation where cryptocurrency is going to work better for me than cash, credit, or bill pay would. I'd have to pay a commission to buy crypto currency, I'd have pay a commission to cash out again, how is that better than just using cash/credit?

Bitcoin as a currency doesn't solve any problems for people in developed countries. For the 5 billion plus who are underbanked due to lack of access or government red tape, it solves a big problem. Maybe you live in a country where there is hyper inflation like Venezuela or Argentina, or you are a female in Saudi Arabia and you cannot open a bank account, or you need to purchase prescription drugs online because you cannot afford it. Bitcoin is not perfect, but it actually solves problems for some people. We mostly buy Bitcoin in the west as speculation.

Re: Avoiding being scammed in ICO “pump-and-dump” schemes

#47

Post by byoung2 » Mon, Aug 28, 2017, 3:23 PM UTC

Kalkaline wrote: post #39

sodafountan wrote: post #19

Ah the dot-com bubble 2.0. I think it'll go down in history as the crypto-crash because that's cool to say. But seriously this is exactly what happened in the late 90's during the rise of the web. There is real value in Bitcoin, there is real value in blockchain technology. There probably isn't any value in PETCOIN or AOLCOIN if you catch my drift. Smart investors who can stomach risk can make a lot of money over the…

I still haven't seen a situation where cryptocurrency is going to work better for me than cash, credit, or bill pay would. I'd have to pay a commission to buy crypto currency, I'd have pay a commission to cash out again, how is that better than just using cash/credit?

I think the real value of crypto will come when the market is stable enough that people feel comfortable leaving their money in crypto instead of cashing out (avoid the commissions). Get paid in crypto, buy goods and services in crypto, and never have to deal with cash or banks. I think a great use for crypto is microtransactions which are cumbersome using cash (literally coins) or expensive using credit ($0.30 transaction fee).

Re: Avoiding being scammed in ICO “pump-and-dump” schemes

#48

Post by jetti » Mon, Aug 28, 2017, 3:53 PM UTC

snarf21 wrote: post #40

Kalkaline wrote: post #39

Earlier quoted context omitted.

I still haven't seen a situation where cryptocurrency is going to work better for me than cash, credit, or bill pay would. I'd have to pay a commission to buy crypto currency, I'd have pay a commission to cash out again, how is that better than just using cash/credit?

You are paying for privacy. There is no company to sell your buying habits. There is no company the government can demand turn over your purchasing history.

This all depends on where you are. In the US, you have to provide KYC information to get bitcoins so there will be a wallet tied to your personal identity. From there, you can follow the transactions on the blockchain and see where it leads. It isn't as easy as a subpoena to get information from a single company but it isn't like there is actual privacy either.

Re: Avoiding being scammed in ICO “pump-and-dump” schemes

#49

Post by sireat » Mon, Aug 28, 2017, 3:54 PM UTC

byoung2 wrote: post #47

Kalkaline wrote: post #39

Earlier quoted context omitted.

I still haven't seen a situation where cryptocurrency is going to work better for me than cash, credit, or bill pay would. I'd have to pay a commission to buy crypto currency, I'd have pay a commission to cash out again, how is that better than just using cash/credit?

I think the real value of crypto will come when the market is stable enough that people feel comfortable leaving their money in crypto instead of cashing out (avoid the commissions). Get paid in crypto, buy goods and services in crypto, and never have to deal with cash or banks. I think a great use for crypto is microtransactions which are cumbersome using cash (literally coins) or expensive using credit ($0.30 trans…

Sadly transaction costs in established crypto are quite high for small (There would have to be a solid(likely with some sort of central authority) proof of stake crypto for inexpensive microtransaction models to work.

Of course the alternative is doing it off chain but that pretty much gets us back to trusting some sort of central authority.

Re: Avoiding being scammed in ICO “pump-and-dump” schemes

#50

Post by sireat » Mon, Aug 28, 2017, 3:55 PM UTC

snarf21 wrote: post #40

Kalkaline wrote: post #39

Earlier quoted context omitted.

I still haven't seen a situation where cryptocurrency is going to work better for me than cash, credit, or bill pay would. I'd have to pay a commission to buy crypto currency, I'd have pay a commission to cash out again, how is that better than just using cash/credit?

You are paying for privacy. There is no company to sell your buying habits. There is no company the government can demand turn over your purchasing history.

Not counting Monero and a few others, most cryptocurrencies are only pseudo-anonymous.