After I was turned into a memecoin, I looked into the hype behind the crypto that only a tiny percentage of people profit from

Yup

  • dhork@lemmy.worldEnglish
    202·
    5 days ago

    People need to understand that there is a difference between cryptocurrencies that have their own blockchain, and tokens that ride on smart contracts on those same blockchains.

    Bitcoin and Ethereum are two examples of cryptocurrencies with their own blockchains. This means that new coins are released periodically based on some algorithm that all nodes agree on, and the rules can’t be changed arbitrarily. (Ironically, the first real memecoin, Dogecoin, is basically a clone of Bitcoin with some tweaks, but it has its own blockchain and its own set of rules).

    Neary all of these memecoins (Dogecoin being the main exception) do not have their own blockchains at all. They are just smart contracts riding on top of Ethereum or one of its clones. Anyone can make a new memecoin simply by starting a new smart contract. Anyone. You can literally make a new token with a marketable name out of nothing, with trillions of tradeble units, then send a bit to crypto exchanges and pay them to set up trading with the liquidity you just gave them. People start trading, and now this coin (you made from nothing) has a price attached. It may only be a fraction of a cent, but you have trillions. If it catches on, and the price goes up, you can now release more and sell it for real money.

    You simply can’t do that with established currencies with their own blockchains, because the creation of new units is governed by so many rules. You could always create your own Bitcoin or Ethereum clone, but then you are stuck building your own validation network until other people decide it’s worth participating in validation. The only entities who have been successful doing this lately are exchanges (who then use their captive exchange coin to enable smart contracts to sell shitcoins on).

    So yes, memecoins are scams. Crypto on its own blockchain is not, but if it’s main use is to enable scams then what’s the difference? Bitcoin, Ethereum, and (ironically) Dogecoin are fundamentally different than most shitcoins (and the exchange-owned Ethereum clones that only exist to enable trading in more shitcoins.)

      • dhork@lemmy.worldEnglish
        44·
        5 days ago

        The ecological impact is entirely optional. Not all cryptos consume massive amounts of power to validate transactions. Ethereum successfully transitioned away from a power-intensive algorithm and now has massively reduced power consumption

        https://digiconomist.net/ethereum-energy-consumption

        Bitcoin could do the same thing, but won’t, because it’s development team doesn’t want to.

          • dhork@lemmy.worldEnglish
            6·
            5 days ago

            The main use case for cryptocurrency ought to be as a method of payment that relies on trusting no third party. Think Venmo or PayPal or Google Pay, without having to trust Venmo or PayPal or Google. You might not value not having to trust any 3rd party, but maybe you should.

            But this is why I say the worst thing that ever happened to crypto was for its price to skyrocket. Because now nobody cares about trustless transactions, they just care about Number Go Up.

      • some_designer_dude@lemmy.worldEnglish
        27·
        5 days ago

        It’s not all proof of work. Crypto at its core is less a scam than, for example, the US dollar because it cannot be counterfeited, it can’t be privately fucked with, and everything that happens is auditable by the parties that need to, and not for those who don’t. It’s a far better foundation than what banks have built, which is effectively a bunch of shared ledgers but with humans at the helm.

        Anyway… Just pointing out that your comment won’t age well 😜 Crypto is here to stay. Scams will be fewer and less successful as the tech matures. Remember the .com bubble? Did you curse the Internet itself then, too?

    • auraithx@lemmy.dbzer0.comEnglish
      21·
      4 days ago

      Not all memecoins are scams, some are just memes and are 100% community distributed.

      People also usually know what they’re getting with memecoins.

      The VC backed shite is far scammier. They actually lie, manipulate the price and dump their tokens for maximum profit.

      And Wdym established currencies with their own blockchains? You can mint tokens on solana, cardano and plenty of others.

      • dhork@lemmy.worldEnglish
        1·
        4 days ago

        You can mint tokens on solana, cardano and plenty of others.

        Exactly. And most of those tokens are shitty, because anyone can make them, and they are not useful for anything. The few that have utility are only useful because they have been declared by their founders to represent some other asset: dollars (like Tether), votes in some governance protocol, even access to the President.

        Whereas SOL and ADA can’t just be made on demand, by anyone. The native cryptocurrency has some scarcity at least. And utility, but let’s face it, their main utility is to create the shitty tokens. (I bought some ADA in the hopes that their smart contracts would be interesting, it turns out all I bought was regret.)

        Still, I’d much rather buy SOL or ADA than the craptastic tokens they enable.

        • auraithx@lemmy.dbzer0.comEnglish
          2·
          4 days ago

          Well, SOL and ADA were made on demand, technically ;) That’s why proof of work is king. I mean here’s the Solana insiders laughing about dumping on retail

          https://xcancel.com/GooseOfCrypto/status/1456002541808807938

          I dont mind memecoins when they’re done right. Transparent, fair distribution, etc. There’s also a ‘DegenFinance’ category of dApps with things that are openly advertised as gambling. One even as a Ponzi (Lock your assets in a smart-contract, pay a fee to unlock, fee goes to the people who stay in longer). Plenty of legit projects building on those platforms too, but yeah unless you’re interesting in things like yield, lending, bonds, synthetics, etc - probably not going to ring your bell.

          eUTXO is interesting, but Chuck is a hype merchant and people failed to realise how long it’d take to develop everything again from scratch

          And thankfully there is a PoW chain that also runs eUTXO, has even more expressive smart contracts, optional privacy built into the core, and a fair launch with no VCs. (Ergo)

          Outwith that, Bitcoin Cash is also interesting. They don’t have an expressive smart contract language, but have achieved some complex defi with token scripting + off chain. Some cool Lunarpunk projects like DarkFi too although they are private by default so not suitable for mass appeal. But yeah, if Satoshi were still active he’d have forced 90% of the space to call themselves something other than crypto as it’s an insult to the original vision.

  • JohnnyFlapHoleSeed@lemmy.world
    13·
    5 days ago

    Here’s a better question, have you ever seen anything that leads you to believe that Trump and Tate would willingly do something for someone other than themselves?

    Yeah, it’s a fucking scam.

  • sylver_dragon@lemmy.worldEnglish
    92·
    5 days ago

    Crypto is a ponzi scheme playacting at being a currency or investment vehicle. Meme coins just dispense with playacting and aim for shorter time horizons on cashing out from the ponzi scheme.

  • w3dd1e@lemm.ee
    61·
    5 days ago

    Corporate needs you to find the difference.

    Memecoins

    NFTs

    ಠ_ಠ

  • VagueAnodyneComments@lemmy.blahaj.zoneEnglish
    5·
    5 days ago

    Why the fuck would anyone care if they’re running a scam, they’re anti-social rapists. There’s a different thing society is supposed to do to anti-social rapists.