1 day ago
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From The Reality Crypto Series
The Grift That Keeps on Grifting
In today’s society scam culture is pervasive. Despite the negative view of it held by previous generations, rather disappointingly in the quest for parity with the Instagram ideal, scam culture has become accepted by an uncomfortable number of people as an alternative lifestyle choice.
Please note this article is intended for informational purposes only. All views and opinions expressed are my own, and should not be considered financial advice. Always do your own research, and consult with a financial advisor before making any investment decisions.
The world we live in these days is but a shadow of its former self. I was born at the beginning of the 1980s. Born into a society where people spent their formative years playing outside with others. Where physical libraries were a thing. Where shell suits and Reebok Pumps at one point were all the rage. The world pre-social media was very different. In many ways culturally we have been on a perpetual downward spiral. A race to the bottom if you will.
These days the emphasis on flexing online, and making ostentatious displays of wealth has never been more deeply ingrained into popular culture than it is now. As a result, the desire by the masses for quick and easy money has never been greater. For the younger generation, the idea of spending time and effort to achieve something of value is considered “old hat”, a relic of yesteryear.
In today’s society scam culture is pervasive. Despite the negative view of it held by previous generations, rather disappointingly in the quest for parity with the Instagram ideal, scam culture has become accepted by an uncomfortable number of people as an alternative lifestyle choice.
In the past, the holy grail of many investors, was to receive an annual ROI (return on investment) of around 8–12%. However, the creation of cryptocurrency has changed that. Now for the younger generation, if the average investor isn’t achieving an ROI of 1,000% weekly, it is considered an epic failure. This desire for “lifechanging” amounts of money from any investment, coupled with the extreme financial illiteracy present in the general populous, as well as a general lack of any investing experience, are the elements of what I refer to as the Scammer’s Paradise trifecta.
The proliferation and promotion of meme coins in Web3 has only exacerbated this situation.
As twisted as it may sound, we have genuinely entered an age of scamming on a scale never seen before.
Unless you’re a drug dealer, or involved in some sort of criminal enterprise, “get rich quick” schemes are, and have always been a pernicious lie. They are designed to lure individuals into investing money, time, or effort with the promise of achieving substantial wealth in a short period of time, with little expertise, risk, or effort required.
This type of scam exploits a person’s desire for financial freedom. They are dangerously persuasive because they often appeal to emotions such as greed, desperation, or ambition.
One of the hallmarks of these scams is their unrealistic promises, often accompanied by vague or deceptive details about how the profits will be generated.
Common examples include:
- Ponzi schemes: The use of funds from new investors to pay returns to earlier investors, creating the illusion of profitability.
- Pyramid schemes: Recruiting participants to pay upfront fees and earn commissions primarily by enrolling others, rather than selling a legitimate product or service.
- Fake investments: Promoting non-existent businesses, cryptocurrency opportunities, or stock market “insider tips.”
- Online scams: Including fake job offers, lottery scams, or “work from home” opportunities promising high income with minimal effort.
The concept of “get rich quick” schemes is as old as time, rooted in human psychology, and the universal desire for wealth and security. However, its modern iteration can be traced back to a few historical contexts:
- Early Confidence Tricks: The idea of deceiving people for monetary gain has existed since antiquity. Historical “confidence men” (or “con men”) tricked individuals into trusting them, often by making promises of easy riches.
- Industrial Revolution (19th Century): With the rise of industrialisation and speculative investments, scams became more sophisticated. Fraudulent schemes involving land, railroads, or stocks were common during economic booms.
- The Gold Rush Era: The allure of quick wealth during gold rushes in the 19th century (e.g., in California or Klondike) inspired countless scams, such as the selling of worthless mining claims.
- 20th-Century Financial Scams: The term “get rich quick” gained prominence in the early 20th century with the rise of mail-order schemes and deceptive advertising. Figures like Charles Ponzi (1920s) became infamous for their elaborate frauds.
- Digital Age (21st Century): The internet has amplified the reach and scale of these scams. Online platforms allow scammers to target millions through emails, social media, or fake websites, making “get rich quick” schemes more pervasive than ever.
The recent advent of Large Language Models like Chat GPT have elevated the ease and effectiveness with which scams can be executed to another level.
“Get rich quick” scams thrive on several well established psychological principles:
- Greed and ambition: People are drawn to the idea of wealth without hard work.
- Fear of missing out (FOMO): Urgent offers or limited-time opportunities push people to act impulsively.
- Confirmation bias: Testimonials or fake reviews reinforce the belief that the scheme is legitimate.
- Cognitive biases: Overconfidence or a misunderstanding of financial risks can lead to poor decision-making.
The longevity and evolution of “get rich quick” scams underscore the importance of scepticism and financial literacy in a persons ability to be able to identify and avoid them.
As an aspiring millionaire entering the world of crypto for the first time, you may ask yourself the question, “should I get involved in meme coins?”.
Well, the short answer is an emphatic HELL NO!
I’m sure at this point your instinct will be to ignore my advice. You will probably think of that person you read/heard about that invested $10 into some meme coin and is now a billionaire, or a story to that effect. You will tell yourself that you’ve only got a small amount of capital to play with, and you will dream of achieving similar fortune.
Now is it possible? Sure, many things in degenerate gambling are.
But is it likely?
I refer you to my earlier emphatic response.
If we consider the lifecycle of cryptocurrency thus far, meme coins are a relatively new phenomenon.
Dogecoin, the first meme coin, was created in December 2013 by software engineers Billy Markus and Jackson Palmer. During a conversation in which the two were making fun of the wild speculation in cryptocurrencies at the time, they decided to create a payment system as a joke.
“Despite its satirical nature, some consider it a legitimate investment prospect.” — Wikipedia
Dogecoin enthusiasts began referring to the cryptocurrency as, “the people’s crypto”. It grew in popularity, and by May 2021 had reached an impressive market capitalisation (market cap) of $85B. Today, Dogecoin is the 7th largest cryptocurrency, with a market cap of $52.48B.
Not bad for a dog coin.
These days many so-called meme coins are actually technically meme tokens. But that distinction is a conversation for another day. In this article, the terms “coin” and “token” are used interchangeably.
To fully understand the current climate regarding meme coin trading, we need to travel to the crypto degenerate gambling mecca that is known as Pump.fun.
Essentially, it’s a platform that allows an individual to take a meme (a popular image or topic), and then launch a crypto token of that meme for trade on peer-peer markets.
Ignore any wholesome fantasies you might have that you are “investing” in a cryptocurrency. You’re not. What you are actually engaging in by buying any meme coin, is the worst form of degenerate gambling imaginable.
And when I say the worst, I really do mean it. Worst by orders of magnitude so great you’d probably need to express it using some sort of differential equation.
I jest, but I’m sure you understand my point.
Buying meme coins is significantly worse, because unlike traditional gambling, they lack enforcement, regulation, and fairness.
Traditional gambling (like in a Vegas casino) has what is known as enforced RTP (return to player).
On the other hand, meme coins are a land of price manipulation and scamming. If you were to go to the roulette table in a casino, you would be facing a predetermined set of odds. Yes you might lose some money, but you aren’t running the risk, that the croupier operating the table might grab all the chips, and make a run for it. Even if this were to happen, any loss to the player would be remedied by the casino, as well as the fleeing thief/croupier facing punishment from their employer, as well as law enforcement.
At the very least, with traditional gambling there is a pre-set agreement of the rules of play.
In the world of meme coin trading, this doesn’t exist. If you buy a meme coin, you never have any idea what is going to happen to your money. As with any purchase of crypto, in theory and in practice, your investment could increase or decrease in value. However, with meme coins, there is a very good chance that you could be buying something that is deliberately designed to steal all of your money. There is even a chance that the person that created the meme coin, could be a 12 year old kid, who has reserved most of the tokens for himself, and like most other meme coin creators, only intends to dump his allocated supply on unsuspecting buyers.
This is exactly what the son of Adam Biesk (a Californian art adviser) did on 19th November 2024.
Meme coin trading can be described as high risk speculation, but with an added minefield present, where its entire design is to only enrich insiders, scammers, and early adopters.
According to reports by Dune Analytics, the vast majority of people who trade on Pump.fun will lose all their money. And yet rather bizarrely, the meme coin industry is often regarded by its advocates as some sort of “generational wealth” opportunity. In reality, it’s a tool for the redistribution of wealth, from the poor, to the richer.
Meme coins are a mechanism that allow insiders and bad actors to harvest profit from unsuspecting, or particularly misled victims. The people who launch these coins (more often tokens), especially those willing to deceive their audiences, are the ones who benefit the most.
Many people have been bamboozled into believing this “redistribution of wealth” mantra. Unfortunately, what they fail to realise, is that this redistribution is actually occurring in the opposite direction. They often have this utopian vision, where rich people’s money gets filtered down to poor people. Many think “it’s great, I get something for free!”
Unfortunately, that is not what meme coin trading is. In reality, meme coin trading is when poor people get sold the cynical lie, “buy this crypto, it will make you untold amounts of money”, and then when they do, the creator of the cryptocurrency runs away with all their money, and everyone else’s.
Liquid NFTs are the latest innovation in blockchain collectibles. Nathan Hill and his team have done an extremely impressive job by answering one of the most perennial questions in Web3. Namely, “how do creators create an NFT that has intrinsic value outside of any artistic appeal, or proposed utility to the community?”
The perpetually increasing liquidity that is locked into every Liquid NFT provides holders with many possibilities. Some of these options are discussed in my Decentralised Finance 2.0 series of articles.
In this article we will discuss another.
As crazy as the prospect of “investing” in meme tokens is, the Liquid NFT provides an eyebrow raising solution to the meme coin degenerate gambling dynamic.
Imagine the following scenario:
- A person creates a meme coin, lets call it $THIEF.
- It’s a well intentioned effort to enrich the bank balance of its creator…….Sorry, I mean the community (ahem).
- Now imagine that the creator of $THIEF also created a complimentary Liquid NFT collection. Lets call it the “Solution Collection”. It’s a series of 20,000 NFTs. The mint price of each is $100.
The mint mechanics of the Liquid NFT are as follows:
- 50% of the mint price is locked in liquidity into each NFT = $50.
- 40% of the mint price goes to the collection’s creator = $40.
- 5% of the mint price goes to the Liquid Marketplace = $5.
- 5% of the mint price is redistributed amongst the locked liquidity of all other existing Liquid NFTs = $5.
The token and collection creator could do the following:
- Take their 40% from the mint, and use half of it for the development of the token ($THIEF). In this example = $20.
- Then use the other half ($20) to buy the token ($THIEF), and then burn the purchased supply.
This will have the following effect:
The money allocated for the development of $THIEF will assist in providing longevity for the lifecycle of the token. Often when crypto projects are created, there is an assigned token allocation designated for its development, marketing etc.
This creates a practical problem. Because there is usually no revenue creation mechanism for the token, the only way to obtain the required funds is to sell the allocation. This inevitably impacts the token’s chart negatively.
And what happens when the supply of allocated tokens run out?
This is a massive existential problem for the longevity of any project.
Unfortunately, most people who create meme coins, aren’t thinking long-term. Their aim is to extract as much money as possible from the project as quickly as possible. Usually with very little regard given to the rest of the community. Despite whatever assurances they may give publicly.
The 20% of the NFT’s mint price used to purchase the $THIEF token, and then burn the purchased supply will have a positive impact on the token. The purchase has the effect of increasing the market cap of the token. The burning of the purchased supply will also have a positive impact on its price action, by permanently decreasing the token’s supply.
Another appealing feature, will be the increase in the liquidity of the $THIEF token. The token’s purchase effectively puts more money into the token. Then when the token is burned its supply decreases, but as nothing has been sold, no money actually leaves the token.
The amount of money locked into the token remains constant, while its supply decreases.
And finally, any purchaser of the $THIEF token who has also bought the associated Liquid NFT, possesses an asset whose value will only ever trend upwards.
You should accept that investing in meme coins is probably never going to make you the kind of money you are hoping it will. Crypto is a zero sum game, and most people who get into trading meme coins will lose “their shirt” to early adopters, insiders, and scammers. The wild-west of the 17th century in the United States had more rules and regulations than the meme coin industry. A lack of utility, scandalous tokenomics, and an extremely pervasive scam culture in Web3 all conspire to ensure that almost every participant will get rekt.
For those determined to live life on the edge, the creation and integration of Liquid NFTs into the mix introduces an interesting dynamic.
While investing in cryptocurrency tokens are a zero sum game, investing in Liquid NFTs is not. Unlike the gaslighting investors usually experience from token creators, every holder of a Liquid NFT can be a winner. The dynamics of the Liquid marketplace guarantee that the value of the Liquid NFT’s locked liquidity always, and only-ever increases. The only question is how fast will the increase be?
Bull market, bear market, it makes no difference.
The inclusion of a Liquid NFT into any meme coin project provides NFT holders with an asset that will only ever appreciate in value.
The token buy-and-burn idea mentioned in the last section, contributes greatly to improved stability, and positive price action of the token of choice. In my example this was $THIEF.
As I’ve mentioned in previous articles, the impact of Liquid NFTs on a multitude of industries, as well as the number of “use cases” for this breed of NFT cannot be overstated.
For more detail on the dynamics of the Liquid NFT Marketplace, check out the following article:
My name is Prometheus Bones, and I’m an ambassador for the Liquid NFT Marketplace.
Any project creators who are interested in launching their collections as a Liquid NFT, please feel free to use my referral code to do so.
It will help me out greatly, and allow me to continue doing the work that I love in the Web3 space.
For my referral use the URL (link) below.
https://liquidnfts.finance/share/0xca6d817199d4bd248a53a24e17731bb8c84dab88
Also, if crypto is your thing, you are more than welcome to follow me on X (Twitter).
I am a Bitcoin Maxi, and I post quite regularly.
Many thanks.
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