“Can you consult our white paper? »
I was at my first altcoin conference in Los Angeles. It seemed strangely appropriate because “cryptographic” white papers are the equivalent of Hollywood movie scripts. Everyone has a shitty one that they desperately want people to read.
“You realize I think these things are scams and I won’t spare your feelings. Also, you can’t use my name or likeness, I’ll just review the document and tell you everything that’s wrong. But if you’re still interested, the my rate is $$$ per hour.
I wanted to be honest with them and I felt bad for taking their money when I was sure they wouldn’t like my report. However, they persisted as a talented Hollywood agent.
“That’s fine, I’m sure you’ll love our testimonial after reading the newspaper.”
Her level of deception and naivety matched that of an aspiring actress who had just gotten off the bus in Iowa. Did they see my YouTube channel? Follow me on Twitter? I had been making pieces of altcoins for months.
“Are you sure? I really don’t want you to waste your money.
“We’re sure you’ll want to join us after reading it.”
I knew I wouldn’t like this play until I read it, just as I knew I wouldn’t like one of those little-disguised Scientology promotional movies.
Airdrops and Premines
Talk to any altcoiner and they are obsessed with air launches. These are supposedly “free” tokens, but they really are ways for altcoin creators to recruit a community. They’re like Costco’s free samples that make you feel guilty about buying the whole bag. It is corruption and anyone who prides himself feels compelled to return something.
This consideration comes in the form of word of mouth. The recipients of the Airdrop usually say good things about the project, just as they would with the grandmother handing out the samples. But like the show, the airdrop overlooks the logic circuits of the altcoiner and gives them a stake in the project, making them much less objective. They are beginning to hope that this currency will replace bitcoin or other nonsense.
Premins are worse. These are large amounts of tokens created for venture capitalists and privileged people with a massive discount, often more than 60% of the supply before it is sold to the public. Paradoxically, people who participate in premins are even more committed than those who participate in airdrops. It’s because they pay the bill and get emotionally hooked, like a shitty lamp they bought at a flea market. The fallacy of sunk cost destroys objectivity.
Worship the personality
As a terrible script that has no noticeable plot, the reasons for the existence of altcoins are often quite complicated. There’s a lot of technical manipulation, but that doesn’t stop these altcoins! The bomb must go on. When it comes to questioning the usefulness of something like a very slow global computer, you have to put something else in its place.
Typically, the emphasis shifts from the usefulness of the piece to the talent of the founder. No, it’s not a global computer and the code is not law, but our founder is a brilliant prodigy! The founder presents himself as a modern-day Albert Einstein, who pays homage to us with his genius expressed in a decentralized blockchain. In a way, the unicorn handbag is seen as a sign of genius rather than a personality disorder. People are beginning to believe that the creator of the token can do anything from run a decentralized organization, speed up a desperately large database, or cure you of your seasonal allergies.
The cult of personality around the founder is not only unhealthy for the community, but also for technology. Very rarely does this technology come under reasonable scrutiny. It would be an offense to its leader. Instead, there is a propaganda war to discredit anyone who denounces legitimate technical misconduct. If you don’t know what I mean, try criticizing XRP and you’ll get an army of trolls joining faster than a college fraternity when you advertise free pizza. You could also criticize L. Ron Hubbard; no matter how correct you are, the fans will chase you.
Decentralized in name
The main technical flaw, of course, is that the altcoins are centralized. They are controlled by the creator and funded by VC. But no altcoin can claim to be truly innovative without an impossible angle on decentralization. The reason is practical. They would be regulated if they did not include that word. They claim their files are decentralized as Hollywood claims that nude scenes are artistic.
However, for the token to work, they need the cooperation of the exchanges, and this is where centralization becomes really evident. Token founders will pay exchanges a certain amount of tokens to list them. This has been a great profit center for exchanges like Binance, which has many users pumping the token. The list is usually a huge event, like a Hollywood premiere. And like movie box office receipts, most accumulate briefly and then crash.
At least the people who watch the movie only earn $ 20. The fools who buy these bags don’t even have stale popcorn to show off.
However, the general public continues to buy these failed tokens over and over again. Because?
The reason is that they promise the possibility of a quick profit. There are so many push-ups that, if timed correctly, they would get many multiples of the initial investment. Altcoin buyers hope to be able to do this consistently. It doesn’t matter that the odds are slower than Vitalik Buterin’s shoulders.
This hope of getting rich, like winning the lottery, is what makes these bombs work. VCs laugh at their hardware wallets.
As I expected, the white paper I was reading was a disaster. It was a system of reputation that they put in a chain of blogs and required a witness to bet. I pointed out how the system could be played, how the use of bitcoins made more sense and how it really didn’t solve anything. My edits to make it reasonable must have sounded like a studio executive asking for a rewrite of the script.
The report devastated my altcoin clients. His plans to dominate the world through premining and a cult of personality should await. They were pretty upset because they really thought they could influence me. I was responsible, though? After all, they were delirious before meeting them.
I was just the guy who pointed out his delirium.
This is a guest post by Jimmy Song. The views expressed are wholly unique and do not necessarily reflect those of BTC Inc. or bitcoin magazine.