Marc Hochstein is editor of CoinDesk and former editor of the American Banker financial industry publication.
The following opinion article originally appeared in CoinDesk Weekly, a personalized newsletter, distributed every Sunday, exclusively to our subscribers.
As children, we all heard the story of the boy who cried the wolf and learned that morality was not triggering false alarms, otherwise no one would believe it when you reported a real emergency.
But there is another less obvious and troubling lesson of the fable. This is the takeaway recipe for the Recipients of a distress call (villagers in history): Even if someone has already ripped off your leg about a supposedly clear and present danger, it's possible that he's dead serious this time. So, if you write it because of its history, there is a chance that your sheep will be eaten.
This is a big problem for anyone just trying to make sense of the cryptographic space, let alone make money.
Everything is a scam
Bitcoiners, especially the bitcoin maximists, usually call everything they find somewhat doubtful, or that they just do not like, a "fraud".
This is a serious accusation – fraud is a crime, after all, punishable by imprisonment – but on Twitter and in the encryption forums, it masquerades as high school students in the locker room who call dorks and losers. Although, to be fair, the word "S" is sometimes used in a way that is undoubtedly playful.
In a footnote of his hilarious and provocative essay of 2014 "Everyone is a crook," writes Michael Goldstein of the Satoshi Nakamoto Institute, "The crook is a heuristic, not an accusation. "
If you believe that Bitcoin is going on the moon, as Goldstein does, then a merchant who accepts it is a crook, even though his alpaca socks are as warm and comfortable as those advertised, and that a HODLer looking for you to buy him is a scammer too, even if the fiat that he offers in exchange is real.
A scam, in this broad definition, is an attempt to separate you from your bitcoin.
Another way of thinking about this problem is to tell family investors that "all the altcoins and ICOs are scams" is equivalent to telling kids that porcupines are killing their feathers. This is not literally true, but if they believe it, they avoid danger and you will have made a mitzvah.
In Crypto, these dangers can include bad ideas pursued seriously, good badly executed ideas and outright scams. Some argue that the first two categories could just as well be subsets of the third, for all intents and purposes.
Risk of defamation
This is fine for the crypto Wild West, but in civil society, the word "scam" implies an intention to deceive. Calling someone as a scammer can damage that person's reputation (unless, of course, the load is so often upgraded, so many people, that no one gives him more weight). Without strong evidence, the label is potentially defamatory.
It is possible to raise doubts about an idea or a business model, or about the ability of a team to execute it, without skipping directly to the fraud charges. (Sometimes these leads to investigation could eventually lead to the discovery of fraud, one of the first articles pocketing holes in Enron's facade simply suggested that the business of the company were too complex and his stock overestimated retrospectively.)
But an insult of four letters is the easiest way to be heard in the scream of online conversation, which, I suspect, is another reason she uses so flippantly.
Moreover, if the CEO of the largest bank in the United States can call Bitcoin a fraud, while his institution builds a private blockchain based on ethereum (a protocol that would probably never have existed without bitcoin) , so why ] Did anyone bother to choose his words carefully?
Wolves nearby
To return to the villagers who ignored the shepherd, there are many dubious projects in this space.
Just this month, a start-up raised $ 374,000 through an initial offer of parts on the Ethereum, and then disappeared, according to Vice. There is a long list of stories like this.
Often the first to question operators are the same ones who use histrionic language on other subjects. Which means you can not just shrug your shoulders and roll your eyes when the trolls scream "scam". Sometimes they are right.
Sorting the signal from noise can be more difficult in this industry than almost anywhere else.
Image of the wolf via Shutterstock
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