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Everyone Is Getting Hilariously Rich and You're Not
Recently the founder of something called Ripple briefly became richer than Mark Zuckerberg. Another day an anonymous donor set up an $86 million Bitcoin-fortune charity called the Pineapple Fund. A Tesla was spotted with a BLOCKHN license plate. There's a surge in people looking to buy Bitcoin on their credit cards. After the Long Island Iced Tea company announced it would pivot to blockchain, its stock rose 500 percent in a day.
In 2017, the cryptocurrency Bitcoin went from $830 to $19,300, and now quivers around $14,000. Ether, its main rival, started the year at less than $10, closing out 2017 at $715. Now it's over $1,100. The wealth is intoxicating news, feverish because it seems so random. Investors trying to grok the landscape compare it to the dot-com bubble of the late 1990s, when valuations soared and it was hard to separate the Amazons and Googles from the Pets.coms and eToys.
The cryptocurrency community is centered around a tightknit group of friends — developers, libertarians, Redditors and cypherpunks — who have known each other for years through meet-ups, an endless circuit of crypto conferences and internet message boards. Over long hours in anonymous group chats, San Francisco bars and Settlers of Catan game nights, they talk about how cryptocurrency will decentralize power and wealth, changing the world order. The goal may be decentralization, but the money is extremely concentrated. Coinbase has more than 13 million accounts that own cryptocurrencies. Data suggests that about 94 percent of the Bitcoin wealth is held by men [archive], and some estimate that 95 percent of the wealth is held by 4 percent of the owners.
There are only a few winners here, and, unless they lose it all, their impact going forward will be outsize.
They also remember who laughed at them and when.
Related: 1600 Vine Street (similar story, we'll see if it makes you just as mad)
(Score: 3, Insightful) by JoeMerchant on Tuesday January 16 2018, @10:16PM (4 children)
Woman in the story cleans houses and movie theaters for a living (I'm guessing that doesn't pay a whole lot), but... she invested $1000 in BTC and it went up! So, she forked over another $11000 and invested that too, after it already went up... but it could go up higher? It could...
The thing is: people holding BTC took this woman's money, and the money of a lot of people like her, and a lot of borrowed money, and gave her/them BTC, but the people on the other end of the transaction got the cash.
I don't think that the "investors" understand that this is a worse than zero sum game. MDC just invested over $2K in mining hardware and will probably throw a couple hundred dollars in electricity after that. He might make a profit, might not, but either way, if he gets any cash out of this, it's coming from investors.
Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi would collapse in tears of joy at the beauty of it.
🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Tuesday January 16 2018, @10:36PM (3 children)
Don't forget that the main utility of crypto-currencies (unless you're a principled anarchist) is to hide from government oversight, i.e. break the law. So if you're putting money into bitcoin, you're likely helping a criminal or speculator cash out.
(Score: 0) by Anonymous Coward on Wednesday January 17 2018, @02:04AM (1 child)
That's right, MDC is a thief! A dirty rotten thief! I will never suck MDC's dickhead again!
(Score: 0) by Anonymous Coward on Friday January 19 2018, @07:37AM
You would for 0.000175 BTC.
(Score: 2) by JoeMerchant on Thursday January 18 2018, @02:47AM
Don't forget that, although many people bought drugs with BTC on the Silk Road thinking they were anonymous, the core design principles of blockchain make anonymity impossible - only an anonymous transaction wrapper layer could make that happen, and that more or less involves blind-faith trust of the wrapper operator, which isn't really a smart thing to do with large sums of money.
🌻🌻 [google.com]