A fun thought about crypto

So, it has long been said – not least by me – that crypto is enabling folks to repeat and reiterate every monetary scam humans have come up with over the millennia at warp speed.

Hmm, so why not dig into those scams, find one that hasn’t been perpetrated yet, then launch a coin?

For example, I doubt anyone has done Polly Peck with a stablecoin yet but it would be entirely possible and most profitable. It would also be legal.

13 thoughts on “A fun thought about crypto”

  1. He did but that’s because he was stealing. The basic strategy was entirely legal. Collect vast interest in a high inflation currency and report it as profit. The FX loss on the high inflation currency was written off against reserves and didn’t go through the P&L.

  2. What I can’t understand is why anyone would buy crypto if they’re not going to use it in a transaction. (Although the mildly annoying thing is I was going to buy BC to do just that back when they were still in single figures. Probably would have bought surplus so I’d still have the change. If I could remember where I was keeping them. Although I reckon I’d have closed my position long before now) A currency is such as it has the confidence of a sufficient number of people to use it as a token of value to enable commerce. That only arises if there sufficient people using it in commerce. (The obvious precursor was Luncheon Vouchers. People would accept Luncheon Vouchers outside of their proper purpose because they were readily exchangeable for items of value. They usually traded at a discount to face value) Only a tiny portion of created BC are used in commerce. So there’s really nothing pegging them to anything outside of themselves apart from their supposed exchange rates with other currencies. That’s a mugs game. If views change about whether they’re a store of value there’s no price support at all. BC can go all the way to zero. Probably will on the overshoot, at some time.

  3. Bloke in North Korea (Germany province)

    I thought the basic strategy at PP was to raise maximal financing on the value of the company, then transfer all the money to oneself and various politically-connected cronies for “safe keeping” in an obscure part of the world that doesn’t officially exist, and threaten anyone who points out that might not quite be cricket old chap.

  4. That was the end game.

    Before that. Turkish lira inflation, 50 % and above. Turkish lira inflation rates, 50% and above. Depreciation of Turkish lira each year? 50% or whatever.

    Interest rates in Swiss francs? 3% maybe.

    So, borrow in CHF, lend in lira (that it was to fruit farmers whose oranges you then packed is irrelevant) and book the 46% interest rate difference as profit. Write off the FX loss as a special event on the balance sheet and don’t run it across the P&L. You are massively profitable and going bust at the same time.

    Entirely legal back then too.

  5. If it were a stablecoin, then PP wouldn’t work, by definition?

    Anyways, I occasionally wonder if BTC is/has turned into a purely financial asset, on the grounds it does wonders for the greeks on a portfolio.

  6. The only “fun” I can imagine concerning crypto is that the whole market resembles the in-game market in EVE Online: good spectator sport from the sidelines, not something you remotely wat to bet your money on.

    ( For those unfamiliar with that game’s market: Literally everything is allowed as long as RMT isn’t involved. This includes open warfare/blockades, piracy, all possible scams, theft ( massive, brilliant heists taking years to set up..) , social/market manipulation, and all the other things one might think of. )

  7. Bloke in Spain,

    “What I can’t understand is why anyone would buy crypto if they’re not going to use it in a transaction.”

    People are just mugs about stuff rising in price in a bubble. X has doubled in price, so get in there and double your money because it’ll do it again. The smart people ask why it should.

    And it comes from idleness and greed. The people who are hit by scams are people who want to make money without work. Timeshare schemes, MLMs, humanities degrees. Most people who do degrees are idle, greedy people. They think doing some indulgent degree in some hobby like the history of Etruscan pottery will get them a magic key. They want the nice house and BMW that my plumber has, but without covering themselves in shit.

  8. Grikath “Literally everything is allowed as long as RMT isn’t involved.”
    National Union of Rail, Maritime and Transport Workers ?

  9. @ Tim
    Does that mean the people who bought / puffed PP didn’t look at the balance sheet? Even the lenders of the CHFs? I don’t know whether to be impressed or appalled!

  10. Stables are/will be regulated although DAI is censorship resistant. Every model has been tried. The dominant model is the Ponzi because of the strong network effects. This is called ‘farming’. The income of some farms is underpinned by real activity, usually trading. New investors usually don’t know or care.

  11. BoM4

    They think doing some indulgent degree in some hobby like the history of Etruscan pottery will get them a magic key. They want the nice house and BMW that my plumber has, but without covering themselves in shit.

    Now hold on a second old chap. I have two history degrees, but had a career in IT. I do plumbing in my own house but don’t fucking trust myself enough to do it in someone else’s. And get paid for it. Play to yer strengths is the hard lesson I learnt years ago, by not doing so.

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