Although the way the cryptocurrency world plays seems to change every year, its essence has never changed since the ICO in 2017. Retail investors first use the issued coins to buy chips (such as ETH, or the current Solana), and then use the chips to raise funds and obtain airdropped tokens. After the token issuance is completed, they promote it crazily on social networks in an effort to expand the market value and be listed on major exchanges. Finally, with the strong liquidity of the exchange, early investors cash out and leave.
This game has almost no long-term value, except for a very small number of tokens with real technological innovation, their own chains, or long-term community influence. But they are generally not altcoins.
Secondly, I have a lot to say about the ICOs of that year. I can be considered one of the first big voices on Zhihu exposing fake ICOs.
At that time, there was a cryptocurrency, introduced by an acquaintance I met on Zhihu, called UUU. Now, this token is long dead; on the very first day it was released, I was continuously exposing the fraudulent nature of ICOs online.
The scams of ICOs are manifold. Besides harvesting retail investors on exchanges, the token issuance process itself is essentially a pyramid scheme.
Retail investors study the so-called white papers and join 'retail investor' groups. They think they can buy cheap tokens before the listing and become primary market investors; they never realized that the slaughter began at the primary market.
The tokens are not sold by the issuers but by the agents below. Agents acquire tokens at a cost reduced by 50% to 90% and lure retail investors to buy in the group; the total cost for the agents above them is even lower, and so on. In the end, the developers' own cost of issuing tokens is nearly zero.
This multi-level pyramid scheme is roughly divided into first, second, third levels, and even more; behind each agent is a crypto gambler or a major influencer leading a WeChat group; to join the internal purchasing groups of each level of agents and become an agent, one even needs to pay a threshold fee of tens of thousands or even millions of USDT.
This is almost a guaranteed profitable business.
Back then, whenever a new token was released, countless KOLs would promote it online. In fact, they are all distribution agents. This is hardly different from 'selling drugs'. This is also why I despise ICOs so much.
The ultimate achievement of ICO tokens is to get listed on exchanges. However, this process is essentially a PY transaction after the developers have harvested investors. Developers typically need to pay several million to tens of millions as a 'listing fee' to exchanges. After receiving the listing fee, the exchanges provide liquidity; developers can finally sell off large amounts of their tokens for cash. Exchanges and developers collude to exploit retail investors. The final victims are the 'early investors' who buy at high prices and experience a price drop right after the listing, and the retail investors who attempt to get rich overnight by buying in the exchange's PVP.
In the end, the 'scams' in the crypto world are actually nothing new; it's old wine in new bottles. Yet, they are beautifully branded as 'new speculation instead of old', which attracts waves of retail investors.
However, most of the retail investors are almost dead, and there are hardly any new entrants, so the lifecycle of 'new products' in the crypto world is getting shorter and shorter, and the number of people making money is actually dwindling. Aside from Bitcoin, which has gained acceptance through ETFs, the entire crypto world seems to have reached its limit.
Since the cryptocurrency market entered a bear market in 2018 and the ICOs collapsed, the crypto circle has successively invented
1) Extremely poor liquidity has left countless people stuck with their NFTs—the main exchange OpenSea has now shut down.
2) Using high returns as bait, the illegal financial product DeFi in broad daylight—its climax was marked by the Luna collapse and SBF's imprisonment.
3) And the most recent 'inscription' craze last December.
Exchanging money for tokens, entering the casino's PVP, trying to make a profit, but in the end, it all goes to zero. Meanwhile, your money has been taken away by exchanges and high-level trading bots. The crypto world has turned from a blue ocean into a red ocean, and it now has almost no investment value.
Assets without value anchoring are almost inevitably doomed to such an outcome.
I clearly remember that on a Christmas Day just like today last year, I gathered with some friends from the crypto circle to discuss investment opportunities for the coming year. While I envisioned the future of GPUs, NVDA, and AI, they were all talking about inscriptions, launching altcoins, buying monkeys, hoping to make a hundred-fold return this year.
Once someone gets used to gambling for quick money in the crypto world, their brain becomes like that of a drug addict, unable to understand what true value is— even the value of life and existence. Even when opportunities are presented, they will inevitably miss out. This year, NVDA surged 190%, TSLA surged 86%, HOOD surged 219%, and PLTR surged 365%.
Meanwhile, ICOs, NFTs, and inscriptions have already completely gone to zero.
