Torcoin: Crypto's latest scam(blog.toine.io) |
Torcoin: Crypto's latest scam(blog.toine.io) |
https://github.com/torcoindev/torcoin/issues/4 You can see he changed the title in that issue, indicating he was taking over the abandoned name.
The original project is at least nearly 3 years old: https://github.com/torcoindev/torcoin/issues/1 (Git timestamps can be forged, but not Github issues)
And for the pièce de résistance, there's a backdoor in the code: https://github.com/torcoindev/torcoin/issues/3
We never moved beyond the research / theory phase, which is admittedly frustrating, but we never intended to scam anyone.
That said, the idea of incentivizing routing is one I think about every day. In college I ran a successful business selling proxy servers, which opened my eyes to the unoptimized economics of small/medium scale IP transit. Major cloud providers are making a huge racket by charging for transfer rather than capacity. This presents an opportunity for a marketplace.
My next product is going to be a global L3 routing-fabric-as-a service with developer pluggable routing and filtering rules. I'm going to bootstrap it by offering outbound http proxies with hourly charging and an API. Then I will develop the more generalized routing fabric, with the eventual goal of creating a marketplace for bandwidth and routing.
If that piques anyone's interest, feel free to email me - address in profile.
[0] http://dedis.cs.yale.edu/dissent/papers/hotpets14-torpath-ab...
1. They tend to have more disposable income, i.e., they're fat marks
2. The Dunning-Kruger effect means they think they're too smart to fall for a scam
3. Their libertarian attitude means they probably won't make a fuss once they realize they've been scammed, and just passively accept it instead of involving law enforcement
4. Because every one uses different code, any anecdotes about past scams can always be waved off with "This one is different"
It's all so perfectly tuned to draw in an endless supply of suckers that I'm almost kicking myself for not thinking of it first.
$34 billion dollars and many of the biggest names in finance and technology seem to think there's a little more to the story.
The solution was to prime the pump with a pyramid scheme. By structuring the system to highly reward risk-taking early adopters, Bitcoin motivated millions of dollars of high-risk early investment which is worth billions today.
But, return on investment was only a nice side effect on the way to the end game. The end game was to get Bitcoin up and running as an exchange medium --only coincidentally as an investment vehicle. As an exchange medium, Bitcoin is not yet 100% solid. But, in general the plan has already worked. Someone in Haiti can exchange value with someone in the Ukraine and for once there is little that the games of the politicians or the banks can do to stand in their way. That was the real goal. A bunch of nerds gambling was just a necessary bit of fun on the way to setting that up.
This doesn't mean that crypto currencies are inherently scams, but it is a terrible way of defending them.
[0] https://en.wikipedia.org/wiki/Bernard_Madoff#Size_of_loss_to...
>Timestamps for subsequent blocks indicate that Nakamoto did not try to mine all the early blocks solely for themselves in an effort to benefit from a Ponzi scheme.
But they could have.
>The public bitcoin transaction log shows that Nakamoto's known addresses contain roughly one million bitcoins. As of 7 February 2017, this is the equivalent of over US$1 billion.
Starting your own cryptocurrency doesn't seem like a bad way to make a buck (particularly provided it becomes as successful as bitcoin), all thanks (eventually) to "the biggest names in finance and technology".
Granted, there's a strong difference between "potential scam" and "scam" (hell, it's the difference between Torcoin and every legitimate, well-regulated non-crypto currency).
My only theory to date is these are sour grapes type folks who are upset that they've missed the bus in terms of crypto's fantastic investment value.
The only comfort these people get is jeering from the sidelines in hopes that an eventual collapse will prove them "right"
I'm sorry, but so fucking what? MLM was a $178 billion industry in 2013 and it has been growing. This doesn't make it Not A Scam.
"X billion dollars can't be wrong" is also a dead horse. Appeal to authority and wealth is a terrible argument.
Yeah, I didn't think so either.
What does it mean to own a share of Snapchat, Facebook, or Google? You can't influence these companies, they don't pay dividends, so the value of a share is just whatever the mob wants to pay for it. Goes up on good news, down on bad. Bonds are even worse, that's just someone saying sure, I'll pay you back later. These things have law developed around them now, but didn't when they first emerged.
It all depends on your risk profile. If you have high risk tolerance, and think that you can mitigate some risk with being ahead of the market in technical and/or business skills, there is no reason not to get involved in these.
I'm not a cryptocurrency guy, but what exactly about them would someone involve law enforcement for?
Realistically speaking, cryptocurrency-related crime is never going to stop being easy and profitable unless there is a massive increase in both a) government control over the internet and b) coordinated international law enforcement, since these crimes are usually international. Since libertarians typically oppose both, they are incentivized to make crypto-related crimes-- even when they're the victim-- seem like no big deal to avoid helping to fuel an outcry that might cause politicians to take action and bring about a) and b).
Granted, that's all quite speculative, but empirically, I have seen quite a few people get robbed blind of their cryptocoins and be remarkably sanguine about it, and I'm struggling to come up with another explanation.
well, clearly it's not too late to get in on the game ;)
Quite a bit too broad of a generalization.
How is this different from the way Twitter makes no profits but lists on the stock exchange?
Or are startups also a scam?
This isn't a "crypto thing", yo.
All software has such utility.
You either care or you don't.
"For years bitcoin has offered a reliable and inexpensive way to transfer value around the globe."
Bitcoin is not inexpensive. The cost of mining is actually quite substantial just in terms of the electricity bill. And this is inherent in the design: bitcoin's security depends on mining being expensive. If it were cheap, anyone could mount a 51% attack.
Also, Bitcoin is currently teetering on the brink of a community split which could lead to a hard-fork of the blockchain, though very few people outside the community seem to be aware of this. As the old adage goes, past reliability is no guarantee of future reliability.
That also means bitcoin is never going to get better, so it is pretty much destined to always be cryptogold. Which isn't even a bad thing, it just isn't competing to be a real money. But it has never been valued for any potential monetary use - it has always been valued as cryptogold.
the quote is not referring to the intrinsic value of BTC, is referring to the cost of TRANSFERRING value which is low with bitcoin.
As you point out, this is on purpose. And the cost of mining bears almost no relation whatsoever to the cost of using Bitcoin.
Put another way, the miners will sell that 12.5 BTC on the market. Selling on the market puts a downward pressure on the price.
Another way still: If the market cap for Bitcoin remained constant, then it's obvious to see that for every block reward generated, the price per bitcoin goes down.
I don't think it's unreasonable to think that that means we're paying miners $16.5k USD per block, which would be about $9.22/transaction. Plus transaction fees. It's probably just hard to see that because the market cap for Bitcoin keeps increasing faster than Bitcoin's natural inflation. Basically, investors in Bitcoin are paying the transaction cost right now.
There is no latest scam in cryptocurrency. By the time you've finished writing the article another has already popped up.
If anything you are helping these guys by giving them visibility.
But the article is a nice how-to for your own crypto coin and there were lots of worse coins he could have forked off than shadowcoin. :-)
Price is manipulated but because these don't fall under SEC's turf it's being looked the other way...
but if anything should keep the Poloniex and Ethereum guys awake is that the SEC has traditionally retroactively applied a law however far back they need to.
This means that you should start treating cryptocoins under the assumption that the SEC would retroactively view it as equity therefore violation of trading laws.
The amazing thing is that OneCoin does not even have a public blockchain or any chain.
Probably just an Excel spreadsheet with periodic applying of *2 formula.
It is just a regular pyramid which has nothing to do with cryptocurrencies besides the name.
I get regular questions from non-technical people who have been asked to "invest" in OneCoin.
It is hard to tell people to stay away.
This seems sort of unfair. I mean, one of the things that has helped stabilize Bitcoin is that it wasn't controlled by a single entity, and many of the early blocks haven't gone anywhere. Several other cryptos have done poorly because some early consortium got too much control and everyone else backed off.
One advantage of the public transaction log is that it helps people judge whether they're being scammed this way. Nakamoto made a killing, certainly, but I also suspect that a sudden sell-off of the origin block would tank prices.
My parent was talking about Bitcoin costing a lot of money (overall) because of the amount "wasted" on mining. While this is true, it doesn't affect the costs for sending transactions. Causality actually runs in the other direction here: as transaction fees increase, more mining revenue is available, so more is spent on mining.
High transaction cost leads to high mining cost, not the other way around.
You point out that much of the value that is given to miners comes through devaluing everybody else's coins. That's true too, but also doesn't affect the cost of sending a transaction. This cost is borne in proportion to the amount of BTC you hold, rather than the amount of transactions you send.
Most libertarians (and minarchists, and a lot of others) specifically accept basic law enforcement as a reasonable role of government. The whole "night watchman state" idea centers around defense, policing, and courts as legitimate government powers.
(Also, this is backwards even to an-caps. The taxation was theft, but availing yourself of services purchased is reasonable compensation since no one else is permitted to sell legal services.)
And if I'm trying to enforce laws against e.g. someone in another jurisdiction, I didn't pay for that. The funding for that police department was taken from people in that jurisdiction. I can see it being consistent to make use of services that my own tax dollars paid for, but is it legitimate to make use of services that other people's tax dollars paid for, without their consent?
The currency itself is beholden to a small group of dedicated miners and their whims, the fork has been looming over bitcoin for some time now, which is the only thing that seems to give any value to the other cryptocurrencies as if it forks it means a potential foothold for other services to get in.
Cryptocurrencies are a real mess, and for a awhile there, the fad was to attach a new cryptocurrency to whatever service you wanted to try and be "the next big thing", and it's always been ridiculous.
The idea of a decentralized currency isn't bad in and of itself, but there is a lot to laugh at in the current history of cryptocurrencies.
Ethereum seems like a good reminder of this. It has an air of being less seedy and more 'professional' than Bitcoin, with actually-pretty-cool "smart contract" tech. But... the first big project was the DAO, and we all know how that turned out. Robbery and a hard fork. And now the Gnosis auction just hit, and that went terribly and exactly counter to predictions about a "rational market".
Despite any philosophical argument, the actual history of cryptocurrencies is pretty ludicrous so far.
A real hacker would recognize these are the early days of a new technology with incredible potential. Its tech is disruptive enough to already grow a marketcap measured in billions, I don't know what is gained from harping on all the early failures.
The distributed ledger isn't what people are making fun of - it's the frantic rush and chaos around using it that is ridiculed, and in many cases, rightfully so.
Edited additional thought: Come to think of it, I don't think a lot of the new found SV culture is really as hackerish as it's made out to be - it's the same business stuff that cyberpunks in stories would snub their noses at and work to undermine, except it's masquerading as hacker culture - there's a very cool protocol underneath bit coin that probably will fundamentally change how we do "something" in the future. But what is everyone climbing over themselves about with Bitcoin? Get-rich-quick after get-rich-quick schemes and ridiculous business enterprises.
Silk road I got - buy whatever with crypto-currency, hard to trace, from hard to find sites on TOR, and a package arrives or a service is done. Cool! But that's not what the clamoring is about now, and it hasn't been for ages.
That's not a hackerish interest, that's business people playing with yet another asset to trade.
Avoiding them in the future, perhaps? I wouldn't mock a mature technology for historical teething issues, that's pointless. But cryptocurrencies keep replaying the same errors and conflicts without seeming to learn a thing. I like the idea of cryptocurrency, but it's not going to succeed unless we learn from the (myriad, severe) mistakes of the past.
True, many crypto currencies are rapidly increasing in value (because of built in scarcity effects, and investor interest). But that very speculative attractiveness makes them quite unsuited as currency (because their value is unstable and generally deflationary). So you're left with a "commodity" that is unsuitable for anything but speculation. Those kinds of stories usually don't tend to end well.
That is valuable to me and a lot of other people. Until that time comes, I'm happy to embrace the risk of early adoption and the many thousands of dollars it's made for me already.