[applepple]

The vast majority of top projects are essentially scams and the real projects are not in the rankings. Even promising projects seem to turn into scams once they get into the top 200 or so. It's as if some wealthy investors buy up a lot tokens from top projects and then threaten the founders to crash the price unless they stop development and start wasting time. I've worked in the blockchain industry for several years and I've seen founders who used to constantly make great decisions start making one terrible decisions after another - It feels like they switched from being productive to being counter-productive from one day to the next. It's as if they're getting paid to NOT innovate.

I'm 100% sure that there is some manipulation going on but I can't figure out why (though I have some wild theories).

[cinntaile]

Don't go and claim the vast majority of top projects are essentially scams, that's just spreading false information.

[applepple]

Name any major project and I can tell you why it's a scam.

Bitcoin: Uses the electricity of a country to process 2 transactions per second. Layer 2 solutions such as Lightning Network have some significant drawbacks which make them unpractical and vulnerable to multiple attacks. They've been trying and talking it up for years - No results.

Ethereum: Doesn't scale. The entire ecosystem (including all ERC20 tokens) together cannot process more than 30 transactions per second. New ERC20 tokens have to pay the same HUGE (e.g. $20 per transaction) fees as the mainchain; all tokens slow each other down (compete for resources from each other and drive up each other's transaction fees). They said that sharding was essentially ready years ago but now they've basically canceled it (or 'put it on the backburner' as they like to call it) in favor of extremely complex and vulnerable layer-2 ZK-Rollups solutions which are completely unproven (we don't know what will happen when many projects start adopting rollups; expensive on-chain interactions still need to happen).

Polkadot: They claim everywhere to have 'Parachains'. The reality is that this feature doesn't exist yet. The way it's designed is extremely complex and the scalability benefits are limited because there can only be a limited number of parachains.

Also, one thing which almost all the projects have in common is that they're mostly targeted at developers... Yet as a developer, there is almost always a MASSIVE amount of friction involved in setting up and integrating the blockchains with other systems. For example, Ethereum requires minimum 300GB of disk space to run a node (you need to run a node to do any serious integration testing). Also, the Ethereum node doesn't even provide a basic search feature; you need to use CENTRALIZED third-party services in order to search the blockchain data (that's because the node writes to a file instead of a proper database)... OMG. I could go on and on and on. There is just so much money behind these projects that the entire community will constantly twist the facts and present a severely distorted view of reality.

There is no limit to the amount of deception and self-deception when there is money involved.

[sanderjd]

These are all great criticisms, but I struggle to agree with you that they make these projects "scams".

By way of analogy, I remember the ruby on rails really struggled with scalability for a long time, and it was a big problem that lots of people, both proponents and opponents, talked about a lot. Nonetheless it turned out to be quite useful and definitely not a scam. I saw similar dynamics in both AngularJS and React. I'm trying to think of a good example on the other side, something that was hyped but criticized and didn't really succeed due to its criticisms being right ... maybe something like Meteor, it seemed promising but flawed and never really overcame its flaws. But none of these were "scams", just different flawed projects that succeeded or failed despite or because of their flaws.

By my lights, the top two you mentioned (I don't know enough about the third to say) fit very much into this same mould, I think they are flawed projects that will succeed or fail despite or because of widely recognized flaws which are or aren't eventually overcome. But not scams.

I think scams have to have a component of intentionality, that all effort at appearing legitimate and promising is conscientiously only for show. Contra that, I think lots of people are making a good faith effort to make bitcoin and ethereum useful. They may very well fail, but I don't think most people involved are conscientiously doing the work just for show.

[BobbyJo]

I think making promises and taking money from people based on promises you very likely can't fulfill is enough to label something as a scam, and that seems to be the case with all of the points mentioned above.

[sanderjd]

Is this also true of all startups that take funding and then fail? That would be one reasonable definition of "scam" I think, but personally I think it is more useful to have different terminology for speculative high risk ventures that make a good faith effort but fail vs. malicious schemes designed only to take money and run. I think there are lots of both things in this cryptocurrency space, but I think it's reductive to throw your hands up and say they're all the same.

[sanderjd]

Debating myself a bit: the reason startups tend to attract fewer scams is that only accredited investors can invest in them. There is definitely something to be said for that!

[applepple]

Maybe not completely, but they all profit from having an element of deception. They are drawing attention away from better projects by hoarding all the top spots on all the exchanges and ranking websites. They are destroying the industry and hurting people IMO.

[sanderjd]

It is not clear to me where the "deception" is, even if the rest of what you said is right. The things mentioned in this thread are common knowledge and widely discussed.

[xur17]

And I can respond to your "scam" claims:

> Bitcoin: Uses the electricity of a country to process 2 transactions per second. Layer 2 solutions such as Lightning Network have some significant drawbacks which make them unpractical and vulnerable to multiple attacks. They've been trying and talking it up for years - No results.

Can you be more specific about the drawbacks with layer 2 solutions such as lightning network? I use lightning from both the business and the consumer side, and from my perspective, it works just fine. I am able to make payments with negligible fees that settle instantly, and people are able to pay me (business) without any real problems. At this point, the vast majority of Bitcoin transactions I do settle on a layer 2. Frankly, it just kinda "works".

> Ethereum: Doesn't scale. The entire ecosystem (including all ERC20 tokens) together cannot process more than 30 transactions per second. New ERC20 tokens have to pay the same HUGE (e.g. $20 per transaction) fees as the mainchain; all tokens slow each other down (compete for resources from each other and drive up each other's transaction fees). They said that sharding was essentially ready years ago but now they've basically canceled it (or 'put it on the backburner' as they like to call it) in favor of extremely complex and vulnerable layer-2 ZK-Rollups solutions which are completely unproven (we don't know what will happen when many projects start adopting rollups; expensive on-chain interactions still need to happen).

What makes ZK-rollups "extremely complex and vulnerable"? And perhaps touch on optimistic rollups as well (since these are about to launch and will have dramatic increases in throughput as well)?

It seems to me that you are making grandiose claims of problems without any real evidence.

[colesantiago]

So Stellar, Cardano and XRP are all scams?

> Polkadot: They claim everywhere to have 'Parachains'. The reality is that this feature doesn't exist yet.

So it's a scam because it doesn't exist yet and it's planned on the roadmap?

That's like saying Ethereum 2.0 is a scam because it doesn't exist yet.

It's extremely easy to call projects scams when you're not the one doing the work.

[applepple]

>> So Stellar, Cardano and XRP are all scams?

When Stellar started, they were all about 'Quorums'; trying to imply that this was the secret sauce which would allow it to scale unlike any other blockchain. I initially thought that quorums were like separate shards but after asking around years ago, I found out that it was not the case; all transactions pass through all nodes; exactly the same as a plain old blockchain. These days they barely even mention the concept of a 'quorum' because it was never anything more than a scammy marketing tool.

I don't know too much about Cardano so I won't criticize too much but when I skim-read their whitepaper about 1 year ago, it sounded over-complicated. This is a red flag for me. Also, they are yet to implement smart contracts; so there is a long way ahead. I don't like that they keep bragging about their all-PhD team. In my experience, PhDs aren't good at delivering good developer experiences or limiting the amount of complexity.

I wouldn't say that XRP/Ripple is a scam; but only because they don't make it a secret that they are essentially a centralized crytocurrency with multiple nodes for redundancy. But some could argue that they are a scam based on the fact that they don't solve any of the problems that a cryptocurrency is meant to solve (this critique pretty much applies to all top cryptocurrencies BTW; they don't solve any significant economic problem aside from upholding the status quo; the opposite of what they claim to do).

>> So it's a scam because it doesn't exist yet and it's planned on the roadmap?

It's scammy because they sell it as if it already exists, but it doesn't.

[mike00632]

What's funny is I think that Ripple is the only one of the bunch who had legal action taken against them.

https://www.sec.gov/news/press-release/2020-338

Ripple likening themselves to other cryptocurrencies when they are centralized is scammy in my book. There is a reason that video game currencies or Magic Cards aren't listed on exchanges.

[antifa]

I'm sure these are great criticisms but you didn't describe scams and I'm surprised you didn't start with something obvious like NFTs.

[smt88]

"Ponzi scheme" is a better way to put it.