• Uncategorized
  • 0

Buying bitcoin and ethereum is like buying into a giant multi-level marketing scheme

Buying bitcoin and ethereum is like buying into a giant multi-level marketing scheme

Written by
Obsession
Share
Written by
Obsession

It&rsquo,s hard to see crimson flags when you&rsquo,re wearing rose-colored glasses.

Cryptocurrency&rsquo,s warning signs having bot coming prompt and furious. A fresh report indicates that half of initial coin offerings, which are the crypto world&rsquo,s money-raising omschrijving of an IPO, have already died&mdash,and many of the remaining are blatant scams with no intent to build a product. Then there are the crypto-rich stories that shouldn&rsquo,t pass a basic smell test of reasonability and logic. Just look at Ripple. Te early January, Ripple co-founder Chris Larsen had a netwerk worth of $59 billion, moving him ahead of Facebook&rsquo,s Mark Zuckerberg, the co-founders of Google, and the founder of Oracle. But following a crypto crash te mid January, Larsen had lost $44 billion of his nipt worth. Gravity can be a heartache.

Then you have the mythology surrounding Satoshi Nakamoto, the anonymous listed inventor of bitcoin and its underlying blockchain technology. A mysterious character who creates 880,000 bitcoins of dubious value whose value is propped up by a public captivated by stories of freshly minted crypto millionaires? That&rsquo,s not going to end well. Throw te a twist where one person allegedly manipulated prices on the Mt. Gox currency exchange to drive the price from $150 to $1,000, and it all sounds like a Hollywood speelfilm. The crimson flags are right out there te the open, swinging te the wind.

But the public should know by now how thesis kinds of movies end: with a few people getting rich and a entire loterijlot of people losing money.

Despite the damn-the-man libertarian framing of cryptocurrency spil the good democratizer of wealth, just 1,000 people own 40% of the entire bitcoin market (which wasgoed valued at overheen $200 billion ter early 2018, and now hovers somewhere overheen $100 billion depending on the massive daily fluctuations).

That&rsquo,s not the currency of the future&mdash,that&rsquo,s a giant multi-level marketing scheme.

Broadly defined, multi-level marketing schemes work by creating a structure where people are recruited and then incentivized to recruit fresh members. Nutritional-supplement seller Herbalife and cosmetics company Mary Kay are two prime examples. The more people who buy into the concept down the line, the more that the individuals at the top make, hence the closely related pyramid-scheme synonym. A participant&rsquo,s livelihood therefore depends on recruiting fresh believers, and the proselytizers who were around from the early days deemphasize the associated risks. Eventually too many people attempt to join the bottom and the middle bricks start falling out&mdash,but not before the early adopters are able to make an exorbitant amount of money.

Isn&rsquo,t this exactly what is happening te the cryptocurrency world? Those who bought te early have an exceptionally strong rente to recruit fresh &ldquo,members&rdquo,: The more people who buy crypto, the higher the prices become, and the thicker the owners&rsquo, digital wallets get. Spil the field goes mainstream, their current holdings will spike ter value, especially given the fact that many cryptocurrencies trade with petite volume. But eventually the hype will diegene down, and the latecomers will shoulder the brunt.

The thought of making effortless money, especially after witnessing others around you make money, triggers people to suspend their typical reasoning. Looking to capitalize on this uur of suspended logic, fresh cryptocurrencies are multiplying like Gremlins. There are presently 1,519 cryptocurrencies available to purchase, many of which are listed at well under a penny. (But if that penny goes up to a dime, someone makes a loterijlot of money.)

Much like your essential-oil obsessive cousin who ultimately sees through their pyramid scheme&rsquo,s shiny facade, a light is beginning to shine on crypto harpers. Respected investor and currency trader George Soros said at the latest World Economic Forum that &ldquo,bitcoin is not a currency.&rdquo, Likewise, Warren Dressoir is skeptical: &ldquo,I can say almost with certainty that [cryptocurrencies] will come to a bad ending,&rdquo, he told CNBC te January. An EU Commission has just stated that cryptocurrencies are not a currency and do not have ensured value. Even the North American Bitcoin Conference stopped accepting bitcoin spil payment to its own conference.

Yet true believers are still undeterred. Wij have seen this mass delusion play out before, and you don&rsquo,t have to go back to the Tulip Mania of 1636-1637 to see it. The late 1990s featured a mania around Beanie Babies, where adults spent thousands of dollars for plush fucktoys made ter China. Their price continued to rise based on the belief that the Beanie Babies had turned into a fresh type of asset, and lots of people lost major savings. But still, there wasgoed a winner: Creator Ty Warner is presently worth $Two.7 billion.

Ter a similar style, cryptocurrencies are minting millionaires and billionaires because they are persuading down-the-line participants that there is effortless money at the end of the rainbow. The newness and ingewikkeld technical nature of cryptocurrency masks a multilevel-marketing strategy wij have seen perpetuated across history&mdash,except instead of slinging beauty products or protein powders, wij&rsquo,re now buying invisible coins.

Related movie: GainBitcoin Phase Two : Ethereum Mining Contract


You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *