Friday, January 26, 2018

Public Service Announcement: Cryptos are Dangerous AF

All right guys, for this post we'll take a break from my usual 200% daily dosage of concentrated sarcasm that I normally inject into my posts and talk about something really serious:

Losing money in crypto.

Everyone loves talking about how much money they made, so there is a bias of the kind of content that you are exposed to. I'm sure you have not seen the dark side of crypto.

Brother kills himself over Bitcoin
Trader loses 200 BTCs (~$3 million SGD) in a month
Confido ICO Exit Scams with $375,000 USD and more from dumping the tokens
Benebit ICO Exit Scams with at least $2.7 million USD using fake photos of their team

Edit: Just after this post went live, news of Japanese exchange Coincheck getting hacked and losing ~$750M USD is making its round. Crypto IS dangerous.

And there are many stories. Those 4 are just the recent examples that I can recall and find the link to. There are so many more and they are all sad stories to hear. The first 2 is just generally how crazy things can get after losing money. The last 2 are examples of recent scams. There are so many freaking scams in the crypto world. Honestly, I'm afraid every time someone emails me with "Hey GMGH, what do you think about this ICO?". But the main focus today will be about the ponzi / lending platform coins. If you are on a lending platform, please strongly consider if it it a scam.

Recently, one of the things that imploded was Bitconnect.

Bitconnect was the biggest crypto ponzi scheme. It was a scam There are many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many, many more like it.

When I did my Crypto Cancer Shitcoin list in December, one of the coins that I happily elevated onto that list was Bitconnect and I called it an "Obvious Ponzi".

Of course, what is obvious to me and to quite a few people in the crypto community might not be so obvious for other people, especially the new people who have recently discovered and joined the crypto movement.


Honestly, I feel bad for most of these people. A lot of them are decent people, just with a poor understanding of how crypto works, how money works and maybe a bit too trusting.


Crypto is seriously seriously dangerous.

While this above issue is specifically about Bitconnect being a ponzi coin and scamming people that particular way, there are plenty of other scams.

It seems that ICOs are now the hot new thing for newcomers, so I will stress a very important point again:

An ICO / project that fails to deliver or delivers a totally crap product is indistinguishable from a scam. 
It is a scam. You got scammed. You just didn't realize it yet.

One of the things that I actively try very hard to do is to NOT encourage people to blindly plow money into crypto. Especially so for some weird indie ICOs.

I explain and talk about crypto.
I blog about what I am doing and thinking about crypto.
I give my own personal unqualified opinion about things in crypto.
I give disclaimers all the time.
I warn people about the risks involved in crypto.
I always talk about how crypto can fall further.

But I don't ever recall going "Hey, do what I am doing so you can make lots of money!". I try to be very mindful with my wording and I usually edit and rephrase anything that might end up sounding like that.

Even when I talked about the crypto that I am holding for 2018, I give a PSA at the end of my post. I know that I am somewhat influential and someone somewhere out there is just going to go, "Hey GMGH bought that, so I'll buy it too!". Please don't be that person.

I tell you to watch me, not mimic me.

As much as I hate the guts of all the promoters of Bitconnect and all the other ponzi coins, they do say something which is the truth:

You're a grown-up adult and you can think and make decisions for yourself. 
Nobody forced you to buy into any of these things and you did it on your own free will.

That said, those promoters are still horrible horrible people. But you, my dear reader, have to learn to be a grown ass adult and know that this crypto wonderland you might find yourself in can be a very dark and dangerous place.

There is no protection. No insurance. No resets. No police. No lawyers. No courts. No jails. No redos. This is the wild wild west. You gave up all the rights the moment you decided to step into this arena. THIS is what MAS was warning you about.

I'm not trying to scare you out of crypto after I (admitted) fanned the flames of FOMO in your heart by exposing you to the world of crypto. Instead, I am trying to make sure that you also understand and accept the reality that there are LOTS of risks in the crypto space and it really isn't for the faint hearted.

Your best defense is to have lots of sketicsm about everything. Trust no one. Nothing. Not even me. Do your own due diligence. It's so cliche to say it, but if you don't look after your own money, no one else will. Have a system of checks. Check with the community. Check with knowledgeable friends. Have a cooling off period before making big decisions.

You can never be sure about anything, but by taking things slow, actually understanding what you are doing and getting yourself into, along with community support from trusted peers, you would be able to have a somewhat robust system of many multiple eyes to help you look out for red flags and avoid catastrophic situations like the Bitconnect ponzi.

I just want to end off by stressing the usual: Crypto is dangerous and if you are uncomfortable about doing anything or if you don't understand what you are doing, please stop before you make a very, very expensive mistake.

5 comments:

  1. I think bet with what u can afford to loss. Don't be too greedy. Extreme greed kills!!!

    No matter how good or solid it seen to be, even big blue chip, never never put all in.

    ReplyDelete
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  3. they're back as Zouk ICO and BitconnectX LOL

    http://www.sgbudgetbabe.com/2018/01/bitconnect-is-back-please-dont-fall-for.html

    ReplyDelete
  4. Thanks a lot for posting this post, Your post has always been an informative source for me.
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  5. Good post gmgh, that will help alot of crypto noobs from hurting themselves. Buying shares on margin is dangerous af already, buying into crypto with margin, imagine the world of pain if it goes the wrong way.

    Another post i came across. If this dude had just stuck with his stash of btc without margin, he would have been a millionaire

    https://www.reddit.com/r/ethtrader/comments/606fz4/my_final_margin_call/?utm_source=amp&utm_medium=comment_list

    ReplyDelete

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