Crypto pyramid

[Tomcat]

Squid​

Just yesterday, another hype crypto project came off literally live. It was a SQUID token based on the most popular TV series of this year, which of course needs no introduction. What was the essence of the project? You buy coins and with them you can participate in an online game, which is made on the principle of the game from the series. To play the game, you need to deposit a certain amount of coins, and the winner takes everything at the end. Well, he shares a small share of the crypt with the developers.

Everything looked as beautiful and thoughtful as possible. In the whitepaper (the main cryptocurrency document, which describes its essence and financial mechanism), the issue was clearly spelled out, as well as the impossibility of selling the coin immediately after purchase. Everything is like in normal crypto projects, and even with its own unique buns. And nothing seemed to bode well. 40,000 investors and the price of one coin at $ 2,800, which was formed on the wave of hype, as well as due to sales restrictions.

Squid was trumpeted by all the world's media, while the anonymous creators of the token were building their insidious plan. Yesterday, at about 17:00, the Squid price turned into a pumpkin. Literally at the moment, the price fell from $ 2800 to $ 0.002. It's a funny fact that just at this time one eccentric was streaming the SQUID price chart and a vidos with his reaction is now walking all over the telegram. I'll drop it here too.

So what happened? The classic rugpull is a cryptocurrency fraudulent scheme, about which we have already published a detailed post. The founders of the project simply drastically cashed all their coins, as well as minimized the site and all social networks, having successfully gone into the sunset. As a result, 40,000 cheated hamsters who lost their money. And what were the prospects ...

Ponzi​

Well, the story is very instructive, and now I will try to draw a parallel between the classic scheme of a financial pyramid and what is now regularly happening on the crypto market. The purpose of this post is to protect you from investing in a scam and teach you to determine which projects are normal, and which are just modified versions of the good old Ponzi scheme. Let's go, remember the main characteristics of the financial pyramid:

• The project is a dummy, that is, it does not carry any value for society and does not solve any problem. This item does not always work, since, for example, SQUID had an interesting idea, which in fact turned out to be a common marketing lure. Modern pyramids usually hide behind a screen of utility, but usually they do not carry anything serious in themselves. In order to identify a dummy, you need to have critical thinking and minimal knowledge of economics.
• Aggressive Marketing. Such projects are usually trumpeted from all cracks. The purpose of such advertising is to lure as many fools as possible.
• Inadequate income. The capitalization of projects is growing exponentially due to a powerful influx of new investors
• The main thing is Disproportionate distribution of profits. The winners are those who invested first and they earn at the expense of those who invested later.

As soon as people sniff out that something is not clean and try to take their money en masse, the whole pyramid collapses and the last investors, most of whom are left with nothing. Why do they collapse? Because there is no money. All the profits were taken by those who are at the top, and since the pyramid does not produce anything, there is nothing to pay most of the depositors from.

Cryptomide​

Now let's get back to cryptocurrency. Take for example the acclaimed Shiba Inu coin, which has grown several times over the past couple of months and even managed to enter the top 10 of all cryptocurrencies. Point one. What is the essence of shiba? Yes, nothing. It's just a joke. The most default and simple token that each of you can create. YES, of course, they came up with something in white paper, but trite what is the use of Shiba Inu? It's not even the first dog-like cryptocurrency, but just a Dogecoin clone with a different name. On the first point, we have 100%. Shiba Inu is the greatest of all meaningless projects. Let's go further. Has the coin been aggressively marketed. Certainly, and for quite some time now. Take the latest articles in the media and PR at the expense of Vitalik Buterin. The result is obvious.

Shiba Inu will borrow the majority of the crypto wallet from every second Indian. The other half of the "investors" will have their capital evenly distributed among Baby Doge, Safemoon and DogelonMars. Oh, this diversification .. As for inadequate income, the crypt spits any MMM. Shiba gives x2 in just a week, like most of her meme cousins. Well, the climax. Who do you think will make money on Sheba? Yes, of course, a couple of hundred Arabs who, for fun, threw in a funny dog a year ago are now happy to calculate their profits. But they are not the fact that they will have time to hit their jackpot. After all, most of them do not understand how the market works.

The rapid growth of the coin only whets their appetite, and even having made x10 to the initial deposit in a fit of excitement, they will be in holdtothemoon mode. Only there will be no native. And all because the price will rise exactly until the top of the pyramid is satisfied. These are the same people who bought billions of coins, at one time not worth even a millionth part of a dollar. They have 90% of the coins and sooner or later they will want to sell them. Remember those news headlines about a wallet that bought shibs for $ 8000, and at the current rate they turned into a couple of billion. This is just about uneven distribution and this example literally screams to us: "Wait a dude, this is a pyramid!" Seriously. Think for yourself to what extent this is adequate. Imagine what happens when this person wants to sell his dog. And not only him, and a couple of dozen of the same passengers. Such massive sales will simply pour the cost of the dog down the toilet, and the very Indians and our domestic hamsters will be left behind. Count your losses and wonder how their $ 1,000 turned into $ 100. And that's if they're lucky.

What can you buy​

As you can see, the similarity of such a coin with a pyramid on the face. The first who bought it were on a horse and got mind-blowing profits due to a wave of hype and a bunch of naive buyers. There is zero sense in the project, and the X's are crazy. Try it, convince me. Make at least one logical argument that the dog is not a pyramid. Moreover, if we take a closer look at the crypto market, we will notice that it is not a single dog. In all crypto-coins, one way or another, certain features of the Ponzi scheme are visible. Take the same Bitcoin. These are the people who bought the bulk at the very start for mere pennies now and are at the helm of the entire crypto market. The hype is there, as is the huge profitability. But do not rush to panic and sell your crypto. I haven't done it yet, and I still continue to invest in it. You see, you need to be able to distinguish between outright scam and fundamentally strong projects. Most of the top projects are based on new technologies and solve certain practical problems. Yes, they look like a pyramid, but exactly the same as stocks. The entire modern economy is one big bubble and one big pyramid. And it will exist exactly as long as people believe in it. They still believe in the crypt and, apparently, every year more and more.

Outcomes​

Think about what to invest in. Only buy projects that have at least some common sense. If this is a coin that is well-known, has grown 100 times and does not bring any benefit to society - bypass this topic. And for heaven's sake, don't invest in dogs, you better buy yourself a living Shiba. There will be more sense. All peace and safe investment.