Ask HN: Does Anyone else working in a crypto company feel this is all a scam?
I'm working in a Cryptocurrency startup, and all my colleagues are investing heavily into the domain, both mentally and monetarily. I cannot shake off the feeling that this is all a scam. It's so shady, from the way there are new coins and tokens every week, and how investors are throwing money into this program. I don't think my company's product deserves the sort of money it's been getting, and it feels like a bubble that will burst, sooner if not later. Some part of the tech is interesting, the essence of the blockchain, for example, but the main application seems to be just suspicious. What do others in the domain think? I'm not leaving yet because I'm not in a place to change jobs yet again, but I will, eventually, but I feel like this domain is very fishy.
197 comments
[ 2.0 ms ] story [ 258 ms ] threadThere was a post not long ago about our obligation as people who know better to speak out about this stuff. Thankfully I've explained to my parents what a scam it is and they have not been taken in, and my siblings agree with me so I don't have to waste time fighting it. But there are so many people being exploited - some maybe deserving.
Tldr, it's an amoral industry that is literally running a criminal scam, you have to decide if you're cool making money off that.
Like it's morally worse than dealing drugs or lots of other "crimes"
Bitcoin is not.
Bitcoin has a value because people believe it has a value, exactly like the US dollar. No inherent value for either. In contract to the US dollar, at least formally, no one can create more out of thin air, unlike the US dollar, it has an integrated, digital and remote exchange mechanism guaranteed to work (if implemented correctly).
We can have an open discussion regrading other cryptocurrencies, but even there, their value exists because it's being assigned to them. The problem is the expectations and the lies being told by the main stakeholder of that blockchain and that's a different story and not intrinsic at all
Crypto doesn't have that upside at this time I don't think.
It was always about empowering the individual.
There are people who look into the future and perceive this, and to them the effect is an intuitively-scammy feel; and it may even seem like it's a system that is destined to fail. Generally the systems perspective or meta-perspective will be first to call out the scam side here.
Things meeting the scammy-feel bar tend to be ephemeral, emotional, the front side of the technology curve for sure. Non-scammy things seem more qualitatively planned-out, secure, quiet, structured, etc. just like early-scam-radar individuals often demonstrate at a personal or temperamental level.
There are others who look at the moment, who take the ephemeral for what it is, and think, "wow, in the right position you could turn this into something that really helps you make it to your next stage in life." These people are probably less likely to think it's a scam, not necessarily because it definitely isn't, but because it's also a lot of other things. Scammy could just be one relevant tag among many. "Hey, maybe this undertaking can just be enough to get us to the next spot, it doesn't have to be perfect but it will require some excitement or hype just like any venture."
To some degree you need to fit things out to suit your favored perspectives or you'll feel the worse for it. To some degree you also need to understand others and see the difference in perspectives as possibly positive, or you'll tend to get stuck in subjective loops as you move forward in life.
And to some degree, if you can combine those perspectives and develop a sort of both-perspective, IMO you can really put together a strategy that flies well, and far, because you'll be gripping both ends of the handlebars on the human race bicycle.
Just some ideas, and a terrible metaphor--good luck with whatever you decide.
If I had wanted to summarize myself I would have emphasized the integrative aspect, rather than picking one side of the dichotomy I described.
So maybe to summarize, "your summary might be a summary worth trusting, if you don't care about details or accurate representation" :-)
As, of course, it's outright yes
Cryptocurrency is one of the looniest forceful actions and movements by the elite Americans cabal, strongly tightly rooted so longtime ago to New World Order
The math behind is fun though.
Why shouldn't I profit from human nature?
Honesty is for the poor.
The morality and ethics crisis in our country in a nutshell.
We're building bigger and better systems to scam and exploit each other, meanwhile China keeps on getting better at building real stuff.
I've already been called Nazi, mysogynist, racist, baby killer, pure evil here (on other now-banned accounts). Do you think "sociopath" is gonna affect me the least ?
For anything it actually strengthen my no-fuck-given stance.
I assume you think it's morally wrong to censor and that's why you don't want to build these tools. But how does it differ from thinking it's morally wrong to scam people? Is there some level of degree difference here?
(2) You cannot explain away 2008 as being the fault of the people who couldn't pay their mortgage. WTAF dude.
What I'm getting from this is that you have wrapped yourself up in a nice blanket of ignorance and a nice comfy salary, and while you have come to the conclusion that the business you're engaging in is fraudulent, you've convinced yourself that anybody but you is responsible. Participating makes you responsible. If you don't have the scruples to leave something like that and have no financial pressure to stay, then you don't deserve any work in tech when the dust settles. I for one would never hire you.
I do believe the whole tech industry is nothing but a giant scam, selling snake oil at a premium. You are as much the problem as I am.
We very much live in a world where you are either the sheep or the wolf, and I ain't gonna be a sheep. I won't back down to bullies of your kind.
> I for one would never hire you.
At least, I don't pretend I'm gonna save the world from itself.
If you start to question the morality of who pays your salary, you will soon find that there are very little companies that you would allow yourself to work for. I can think of renewable energies, and not much else.
In truth, I already work for an evil company. All companies I worked for in my long career were morally bankrupt one way or another. I never had any trouble sleeping at night.
If it's not illegal it's fine.
That’s literally the idea. People doing bad things should find hiring minions difficult.
We're gonna make a deal, I'll let you work in ad-tech, and you let me build tool which allow people to shoot themselves in the foot.
- Apple uses exploitative labor practices to manufacture iPhones [0]
- Google is increasingly being recognized as a surveillance and manipulation platform. They have even been caught manipulating elections [1]
[0] https://www.washingtonpost.com/technology/2020/12/29/lens-te...
[1] https://www.judiciary.senate.gov/download/epstein-testimony
A lot of today unicorns started illegally. Uber, Spotify, Airbnb. Yet, nobody comment about those because their goal was supposedly "noble". That's the problem with the variable geometry morality of the left.
"If it's moral from our point of view, but illegal, the laws are the problem. If what's you're doing is immoral from our point of view, but legal, then you should be ashamed of yourself and repent (or die)."
In other words, it's nothing but dogma and proselytism.
When you are subprime rated, you would have to be a complete moron to take a variable loan on you life. But sure, poor them, it's not their fault, it's the mean evil banker who gave them a tool to shoot themselves with ...
That the difference between you and me. I'm gonna give people the freedom to shoot themselves. You, well, you know better how each and every of them shall live there lives.
Remind me of ESR writing... http://www.catb.org/~esr/guns/gun-ethics.html
Do you even realize your own mentality ?
Well, since that tool was largely fraud from which the bankers expected to profit (and did, in the short-term, until they got taken down by the rest of the industry doing the same thing) by externalizing risk, yeah, it is.
You're putting the blame in the wrong place. I'd start by looking at FNMA. Don't take my word - read up on it.
And loads of people were that moronic, do they really deserve to have suffered because some other people wanted to profit as much as possible from their stupidity? It's not like these morons had the tools to really assess what the fuck they were doing. Not excluding the fact that many of these loans were basically predatory, using the naivety/stupidity of these people against themselves to cash in.
Does all the world deserve to suffer through a major economic crisis because some morons are totally free to be predated upon by forces much more educated and sophisticated about the financial markets (and by extension doing that knowingly, pretty fucking evil)?
Libertarian ideology doesn't really hold much to reality, full freedom to do whatever is only achievable when the population is educated enough, humanity is not there yet.
What the actual fuck...
This defensiveness is really off putting, it seems like the only argument you can carry is "the left has a Gospel and I'm against it" and I still have absolute no idea what exactly you refer to and why you are against whatever you are referring to.
You just feel victimised and attacked for some reason.
In contrast, this thread has simply been establishing that jlcoff is a bad person. It’s not a fallacy or a derailment of the discussion to do so, rather it was the discussion. I can imagine why they feel attacked, it’s because they are literally being told they’re a bad person for their personal views. It would be implausible to expect a debate about the morality of working at a place you believe to be a scam, with such a person, to go without challenging them for it. And I wouldn’t expect such a person to respond without raising some form of “let ye without sin cast the first stone” defence and eventually just dribble out insults. My point is: you don’t have to worry about using community standards or HN policy to protect me from ad hominem attacks from them; all of this was priced in. It is inseparable from the nature of fraudulent schemes and the people who push them.
Especially with the dogmatic left at the helm.
Catchphrases don't foster discussion, don't be on the thought-terminating camp, pretty idiotic reply to be honest.
I don't know what you refer by the Gospel of the left, and from there I can't figure out what exactly you are attacking.
What is even "radical left" to you? These are such non-specific terms that just got even less defined with this whole culture wars shit.
I don't know what you are talking about and you haven't exposed anything that I can talk about, just empty platitudes and terms that actually mean nothing...
It was the banks' and regulators' responsibility to not allow bad loans to be issued and resold as mis-labeled AAA investment vehicles. That is the part that broke the global economy.
But (in the US at least), it actually is the government's job to keep the economy stable in order to "insure domestic Tranquility [... and...] promote the general Welfare"
Looked at from first principles, the market cannot work efficiently if people are allowed to lie. Lies create an enormous amount of waste through direct and indirect effects.
Government as the monopoly on power (and locking people up) has an important role to play in policing this.
Such as Tesla FSD ?
“Maybe it’s a scam, but so is [central banking / the stock market / every other startup / etc.]”
You’re trying to gaslight the OP to believe that what they’re feeling is normal, but it’s not. In startups with real products and real users and actual growth, the mood is not “we’re just dumping tokens.”
the questions OP asked have the same quizzical observations that had been levied at the whole tech startup scene for the last ... 14? ... years
its not different enough, a lot of people especially younger people may just be entering the workforce, so its a valid question if they've been exposed to anything else before
Thats a big caveat. Tons of startups dont have that and still consume billions in capital.
Are you … assuming I’m going to make a strawman argument and discrediting it before it occurs? Strawception? Is that where these comments are coming from?
Some scams will be profitable and some may even emerge to be viable product but it’s scammy.
But even if there was, purchasing a L1 coin is similar to investing in a wide swath of coins, because if the value of startups build on the coin increase in value, then there will be higher demand of that coin.
Investing in crypto is like gambling at a game where you don’t know the rules, the house is cheating, the game can shut down (rug pull) at any time, and you can’t go to the police.
I wouldn’t advise my family to invest in startups, or to take their life savings to Vegas and blow it on roulette. I think most people know those are not safe investments. Crypto has a huge amount of hype and nonsense swirling around and since it depends on finding more greater fools the crypto scammers can take advantage of FOMO, ignorance, and what looks like the future of money.
And some don’t trust anyone. Hate banks. Love technology. See how detaching monetary systems from authority provides freedom.
It’s about trust. I trust none. Bitcoin is perfect, it is the money of my enemies and my friends.
This comment coming from a libertarian is a head-scratcher.
The biggest concern about fiat currencies from a libertarian perspective is that the government can inflate the currency at will with no real transparency possible.
Crypto generally eliminates this concern, either by having a fixed quantity of coins or a known inflation amount, and basically perfect transparency being possible through looking at the blockchain.
I think someone strongly anti-capitalist would not be incredibly interested in the best strategies to accumulate wealth. And that is not a point against their critique.
Now if they didn't understand the system they were criticizing that is another thing. But in your comment it seems to imply only the rich would have a valid opinion - though I think that class has obvious biases in this discussion.
Reposting one of my earlier comments [0]:
Like many people back then, I also found the whole proof-of-work / blockchain concept to be interesting from a theoretical computer science / distributed systems perspective.
But these days, I can't help but think that we've inadvertently created a paperclip maximizer without even bothering to create an AGI first. Humans are the AGI, and we're going to happily use more and more energy to play this stupid game for as long as it looks like there's a profit to be made, even if the global outcome is to our own detriment.
If we want this mess to go away, we need to find a way to change the incentives globally.
[0] https://news.ycombinator.com/item?id=30120880
His point back then was that corporations themselves create incentives that are indistinguishable from rogue AGI, but I honestly think it applies better to your sentiment about crypto systems
But first, maybe one difference twenty years later is that I would emphasize the idea that our direction out of any singularity may have a lot to do with our moral/political direction going into a singularity, and so we should strive to create a better society right now (e.g. one that is more egalitarian and compassionate -- while also dynamically balancing meshwork/hierarchy issues like Manuel De Landa wrote about). The biggest issue humanity faces right now isn't "rogue AI" -- it is narrowly selfish people using computer technology to exploit other people in various ways (or at least create a technosphere which does that, with extensive intrusive monitoring and attention direction). A tangentially-related new book on part of that is "Stolen Focus" by Johann Hari. https://web.archive.org/web/20220126161142/https://stolenfoc... (An archive link as site seems to be down at the moment.)
Also related on focus issues: https://en.wikipedia.org/wiki/Center_for_Humane_Technology
I'm all for using electronic systems in a Kanban-like way to coordinate work in a community (including ones with Merkle trees of hashes for audit trails) -- where I have long been a fan of "LETS" systems. https://web.archive.org/web/20190311081102/http://www.lets-l...
But cryptocurrency as a financial movement is more like Tulipmania (an investment bubble a lot like a Ponzi scheme). As I pointed out on Slashdot in the early days of Bitcoin, it wastes electricity and can be easily forked by changing a seed number.
But what I have come to realize is that the ultimate value in any sort of Kanban-like fiat-currency rationing system (like either Bitcoin or the US dollar) is in the nature of the community with a constitution that uses it and stands behind it. And it is hard to predict what happen in social systems globally. And we do need healthy communities and their formal and informal constitutions to live a good life. Distributed currencies could be part of healthy communities -- but it remains an open question how best they could fit in. Also, as I have written elsewhere, healthy communities have some historically-shaped mix of subsistence, gift, exchange, planned and theft transactions -- and crypto mostly is just about exchange.
One good thing coming out of crypto is that some financial winners in it are putting money into public charity. One such excellent inspiring example: https://futureoflife.org/ "The Future of Life Institute works on reducing global catastrophic and existential risk from powerful technologies"
Anyway, from 2000:
========= machine intelligence is already here =========
I personally think machine evolution is unstoppable, and the best hope for humanity is the noble cowardice of creating refugia and trying, like the duckweed, to create human (and other) life faster than other forces can destroy it.
Note, I'm not saying machine evolution won't have a human component -- in that sense, a corporation or any bureaucracy is already a separate machine intelligence, just not a very smart or resilient one....
I’d probably suggest this: https://www.matthuang.com/bitcoin_for_the_open_minded_skepti...
I think it’s not “all a scam”, but there are definitely scammers in the community which add a lot of noise to what’s a pretty cool new capability to handle decentralized state.
https://danromero.org/crypto-reading/
I don’t know if what your startup is building is worthless, but the tech underlying the domain is not.
Until the day they stop sending the sats when you send them dollars, like Gox, like Cryptsy, like Cryptopia, like BTC-e, like Quadriga, like Bitgrail, etc etc; not a scam.
You've got a fully compliant (in terms of anti money laundering), whitelisted counterparties only, decentralized lending and borrowing platform that completely eliminates the friction of a typical corporate treasury banking experience.
You deposit dollars, you earn yield in dollars. If you want exposure to eth or BTC, you can exchange dollars for either or borrow at transparent rates. The transaction settles in seconds and the fees are fractions of what it costs to wire funds.
My organization uses Wells Fargo for similar services (sans BTC and ETH) and pays considerably more for the pleasure of receiving less in return. Aave achieves it with virtually none of the back-office or legacy COBOL based software that these dinosaur, heavily entrenched, ethically challenged financial institutions require. It's like pre-acquisition WhatsApp compared to at&t efficiency comparison.
There's innovation and value creation happening in crypto, whether you choose to see it or not.
The hostility to crypto from a bunch of SV engineers who have scammed society out of billions (trillions?) of dollars pitching ineffective digital marketing is not without irony. Not to mention the societal and political fallout from the uncontrolled spread of misinformation, aided and abetted by the likes of Facebook, Twitter, and other SV darlings. Pushing ads to fuel consumerism and coming on here to complain about emissions from proof of work Blockchains. It's rich.
It's not easy to build software that actually solves large scale problems. Most of the companies/apps in crypto will fail, just like internet startups. What succeeds will likely disrupt the financial system.
Crypto is neither good nor bad, but people are.
"Why is X valuable? Because X allows you to invest in... X."
Also, in this specific example (Arc), is the solution even considered DeFi? There's a centralized list of whitelister entities and you can only participate if you're a customer of these entities. So they're like banks.
Whitelisted counterparties borrowing and lending to each other without having to trust a third party to intermediate, such as fedwire, swift, or dtcc, is clearly not a scam. It's a b2b product with at least 30 sizable informed and willing institutional participants. They could take their capital anywhere else in financial markets but choose to take it to Aave.
It's the same platform Aave offers anyone else on Ethereum, polygon, arbitrum, and other chains coming soon. The customers of the arc product have a regulatory compliance burden that arc solves for them but the tech is the same.
Rainbow wallet is just working on a wallet with nicer UX: https://rainbow.me/
OpenSea, Coinbase, FTX - basic exchanges supporting the market.
Trezor and Ledger make nice hardware wallets.
If you’re specifically asking about companies that have their own token for something, I think urbit’s use of NFTs as IDs for their network is a cool use that makes sense.
The automated money markets are also pretty interesting and not scams.
On the NFT art side, BAYC has been making cool stuff and owning one of them is basically an entry ticket. The community membership aspects of this are more interesting to me, the art and it’s associated status is just what enables that.
I know less about city coins but I like the idea of a way to incentivize a group to do what’s best for the city - could be a way out of NIMBYism. It’s interesting at least.
Cryptocurrency has utility in its current state, but it’s a frontier. I think the Bitcoin for open minded skeptics post does a decent job discussing it.
Even then all of those are services and goods for the crypto ecosystem.
So much of crypto space is turtles all the way down.
Besides evading capital controls, there is not much real world adoption for crypto still.
You start living in the crypto world and then yes you start thinking DeFi is cool and useful. I am yet to see how DeFi can help someone who is not already invested in crypto.
PS Mined first BTC in 2011 but got out of the whole greenhouse in 2017.
A decentralized global store of value has a lot of utility - more so in countries with bad financial systems and limited access to dollars. I think global currency/value store is the killer application of blockchains, and it makes sense a lot of the focus is on tooling/products around this. Provable membership/ownership via tokens is an interesting spin off.
Evading capital controls I think isn't a great use of it actually given the public nature of transactions (unless you're willing to flee the country I guess, which can be good for getting wealth out of countries with authoritarian governments).
The ability to publish and update decentralized state is a new ability and useful. There are obvious tradeoffs around speed and complexity and a lot of things should not make that tradeoff, but the use cases here are real - at least I'd bet on that, it's not "all a scam".
I'm not saying this is unique to crypto (stock collateralized loans help the rich avoid paying taxes in the same way), but it's not interesting or unique.
In terms of the currency aspect of cryptocurrency, what risk adjusted benefit would I get right now attempting to use any of them as a currency rather than dollars?
I wouldn't dismiss HN's concerns on anything tech, finance, or business related. Fact is, much of HN is technically-inclined, many here are financially-inclined, and many are both at once.
When you have people who are both tech-savvy and finance-savvy giving their thoughts on a novel financial technology, you would be wise to listen.
And when this tech & finance-savvy community is bearish on a finance technology, you better be as well, unless you're the one at the top of the pyramid. Then by all means, enjoy your fools.
HN is better than average, but still pretty poor at recognizing something good until there's mass consensus. Even then there's often users complaining about niche technical details despite obvious success.
That's a pretty misleading conclusion to draw: for example, here's the whole Dropbox thread:
https://news.ycombinator.com/item?id=8863
One guy says “you can already build such a system yourself” but that point was immediately contested on quite accurate grounds. Someone else had the correct take (“This is genius. It's is problem everyone is having, and everyone knew it”) and the rest of the thread is similar – lots of use of terms like “great”, various technical questions, comments on how to improve their presentation, etc.
Re: the iPod, are you sure you're not confusing HN with Slashdot.org? The iPod launched 6 years before HN.
Anecdotal, I know. But, I think if you look around at the respectable people in the tech field, you will see that most of them are staying away from crypto for a variety of reasons.
Crypto is the worst kind of pop-culture fad tech.
I think there's a few things here. I don't believe that many people are actively and knowingly working on deliberate scams, but there definitely are some. I do think a lot of people are working on trash and it's only sustainable as a business model because people are making speculative investments, such as Decentraland clothing brands (wtf?). I'm in the field because I like the technical challenges - I've been really lucky at working on some pretty hard/cool things with some really smart engineers. However I do find the constant onslaught from HN, news articles, random people on the internet and in real life, to be too much for my mental health and I'm considering leaving the industry to work on something else. Even if you're just trying to have fun working with a tech stack you enjoy (I've spent time in Haskell, Rust, Go, etc... most of the hip cool ones), being accused of being a scammer every 5 minutes is just very very draining. I still don't believe I have enabled any scams directly but I don't want to spend the next few years of my career justifying that either. In fact I just was talking to my wife about this before opening HN and seeing this question.
I think I need to take a few months off and start looking for something that's tangible like robotics, or something more visual. I'm just not in the position to do that right now. All the best to you anyway - I hope you can keep it all together better than I can!
I agree there are some (how many is another topic) not very long term worthy projects out there being worked on due to this being a new area being explored.
However value are given by people and who knows how different projects would evolve and there might be new value created/discovered later.
There are definitely BOTH scams and real value projects and you definitely have to DYOR (Do Your Own Research). Ultimately Web3/decentralization is about taking back control but that also comes with responsibility. If anyone is feeling unable/unwilling to take the risk by investing time into that company/work field then consider pausing/pulling out.
Would you share what makes you think that?
You’re at a social event with friends and friends of friends. Someone asks “so what do you do?” and you answer.
They either go “huh?”, “ooh neat!” or “oh, gee, yeah isn’t it awful how $industry is $negative_outcome?”
Which of those answers you get can have a big bearing on your job satisfaction.
It feels like the opinions of others shouldn’t be such a big deal. It turns out they are a pretty big deal for me, though. It sounds like it might be the same for you, and I suspect it’s the same for most humans. We’re tribal animals.
Once I figured that out, I started factoring it into my career decisions. I’ve been much happier for it.
Outside of the tech industry, "software engineer" alone has negative connotations and stereotypes, so some of my friends - when single - deliberately hand-waive past what they do by saying they're a "consultant" which somehow. In a brief period of trying to be a very different person when meeting girls, I referred to myself as a "professional problem solver". (yuck).
Working at Amazon and Facebook is another one where your audience differs dramatically. Some people are much more impressed if you work at Amazon on the "retail website" because that's the part they know, while others associate that with dehumanizing treatment of warehouse workers. Others are impressed (and won't shame you) if you work on AWS because the cloud doesn't have the same stink of wage slavery, but to others still they understand this so little that they literally have no reference point to react. Working at Facebook gets you a bad rep, but working on Instagram/Whatsapp doesn't, so now everyone gets to say you work at Meta and get told "Oh yes, I did see something about the Metaverse on CBS. Very nice, dear."
Maybe this is harsh, but I'm glad to hear it's having an effect.
People will always be resentful of success and even just the attempt of it, whether it's a business growing big or putting a man on the moon. Made an advance in robotics? Given the obvious military applications, someone somewhere is going to call you a murderer. You have to get used to this if you want to accomplish anything great. You can't let yourself be ruled by someone else's morality.
Where do the crypto-haters cluster? With those who praise accomplishment and greatness or those who are resentful of it? My view is that they are clearly in the camp of the latter. You have to start hearing the "constant onslaught" as praise, my friend.
Really.