Follow my newsletter cryptodistortion.substack.com!
This is the link to my first translated article!
quoting
naddr1qq…dp43You will all have heard of Cryptoboy, the film released a few days ago by the streaming platform Netflix. Avoiding unnecessary spoilers, yes: the plot is what we all expected. Achieve wealth and success thanks to cryptocurrencies, or rather: thanks to a company that operates in the cryptocurrency market.
The problem, according to the writer’s point of view, arises when, to pursue these - legitimate - objectives, investments are made in companies that are not very transparent and crystalline, especially towards the investors themselves. The world of cryptocurrency is not for everyone. Anyone who decides to enter, simply purchasing a token on any exchange, must know that the market is often subject to large jumps (and artificial manipulations) in price. But there is also something else.
In the poorly regulated financial jungle we are writing about, companies and projects that have very little cryptography are proliferating. The modus operandi is always the same: Bitcoin is used, and other cryptocurrencies, such as buzzwords, are decoys useful for attracting new potential investors. The business, in reality, revolves entirely around something else, for example the well-known and now banal (but always works great) multilevel marketing. Entering with capital with the promise of being rewarded if I manage to bring in other people like me. To operate in this market, these companies have had to evolve, offering wallets, custody services, POS for companies, rentals of computing power for mining, NFTs and so on. But the reality is that everything is based solely and exclusively on one factor: capital entering the company, thanks to new investors, who guarantee profits to those a few steps higher up the pyramid.
Un altro pilastro di questo tipo di business è la psicologia. E qui abbiamo bisogno di altre buzzword. Successo, indipendenza finanziaria, formazione, crescita personale, costruzione del futuro sono le più gettonate, ma non le uniche. Vengono ripetute all’infinito, fino a diventare un mantra, un martello pneumatico che batte nella mente dei nuovi arrivati. Chiunque sarà incappato una volta nella vita nei video di quelle mega convention (ma anche riunioni locali ben più intime): sorrisi, complimenti, premiazioni, concerti, incontri dove la crescita personale è l’unico e vero obbiettivo da rincorrere, feste organizzate in giro per il mondo, nelle location più esclusive, per rinsaldare i ranghi tra tutti i partecipanti al progetto.
I think there is no need to add anything else, the pattern is always the same. The same scheme used since the dawn of time by highly successful companies, from Tupperware, to supplement companies, to cosmetics. But with cryptocurrency it is different. With crypto you can get rich before the -anta, you can be successful, you can change your life and that of those around you. You can become another person.
You can surround yourself with people like you. Or you can become like them.
And to think that the world of cryptocurrencies can offer strong emotions as it is. Simply buying and watching. But the human component is too strong. The possibility of being part of a circle of chosen ones is the plus ultra, the Olympus, of us human beings. Competitions to bring home the best results, be called on stage, receive prizes and consideration. These types of companies are truly phenomenal in one thing: at bringing in new people. They take care of relationships, dialectics, they leverage the above principles, they make you feel important, part of a living, strong, powerful organism. A fundamental characteristic of the members is the absolute certainty of the quality of the project, indisputable and untouchable. The total denial of reality even in the face of a fait accompli.
Another aspect that can be found when coming into contact with this type of environment is the lack of competence of new entrants. The lever to rely on to convince the potential investor is always the same, success and profit, but often leaving out the most important thing: education. The base of the pyramid is often very ignorant about the functioning of both the company and the product sold and handled. Reality is deliberately hidden, in favor of pre-packaged slogans. As already written previously, the buzzwords Bitcoin and cryptocurrencies work very well, but it will be very rare to find someone who really knows what Bitcoin is, what UTXOs are, the difference between an on-chain wallet and a Lightning one, what changes from custodial to non-custodial wallets. custodial. The price, the profit, the profit expressed as a percentage, the graph with the candle of God, certainly have more impact on the man in the street.
In this newsletter we talked about Safemoon and Wonderland, which, despite not being companies but simple tokens, both went bankrupt, taking with them thousands of absolutely loyal users. They collapsed for one simple reason: they were supported by the funds that new users poured into the system. When we analyze many of these “projects” that operate on the market, the design is recurring. The first to enter earn, the last are left without a penny. The reason is that basically everything is based on a scheme as old as the world, to which we Italians, obviously, have given a real name: Ponzi scheme. Anyone who believes that these companies are able to create profits through mining by competing with large mining pools is deluded. Even if they were directly part of these pools with their own computing power, they could at most aspire to limited rewards, a few pennies. Anyone who believes that multilevel marketing creates profits from product sales is deluded. Anyone who believes that dream rewards are the proceeds of an innovative corporate activity is deluded.
So, what are the companies that make money with cryptocurrencies?
The recent scandals of FTX, Genesis and associates have highlighted the difficulties that companies have in making real profits without engaging in dangerous collateral operations. Living on commissions is complicated, they often have to invent very risky solutions, such as trading for example. Trading with customers’ money (FTX is the most obvious example) is a very ethically questionable operation, as well as not permitted. Watching the film Cryptoboy we really realize that a truly recurring factor in this type of business is the lack of transparency, the difficulty in clearly understanding what they really do and how they manage to make profits with their products. For this reason, it seems increasingly vital to avoid leaving your funds on the wallets offered by these companies, moving them to non-custodial alternatives and having total possession of your private keys. We cannot trust exchanges that are much more listed and regulated (FTX always teaches), so there is no reason why we should cede the sovereignty of our funds to third parties, especially if they are companies navigating troubled times.
I won’t tell you how the film ends, but perhaps you can imagine. But if you have chosen to enter this world, you will certainly not be surprised. Being in the cryptocurrency market, we have already experienced the ending many times.