this post was submitted on 07 Dec 2024
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Summary

A teenage boy created and released three memecoins, earning over $50,000 by selling his holdings before the price crashed (“soft rug pull”).

The backlash was swift, with the boy and his family doxed and facing threats from angry traders.

While the legality of such actions is unclear, the incident highlights the risks and ethical dilemmas in the unregulated memecoin market.

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[–] FlyingSquid 24 points 4 days ago (3 children)

Tell me again how this nonsense will replace old fashioned "fiat currency" any day now.

No one has ever explained to me how crypto coins are not fiat currency considering they're not backed by any commodities whatsoever.

[–] [email protected] 7 points 4 days ago (2 children)

They are significantly worse than fiat currencies.

[–] FlyingSquid 1 points 4 days ago
[–] zergtoshi 0 points 4 days ago

The vast majority are, but not all of them.
Albeit it's hard to find those that aren't.

[–] [email protected] 5 points 4 days ago (1 children)

I'm no proponent of crypto, but it's clearly not meant to be backed by a commodity. When crypto people are taking about fiat currency, they're talking about the fact that it's state-issued.

[–] FlyingSquid 1 points 4 days ago (1 children)

That is literally what a fiat currency is.

[–] [email protected] 0 points 4 days ago (1 children)

It's state-issued and not backed by a commodity.

[–] FlyingSquid 5 points 4 days ago* (last edited 4 days ago) (1 children)

No, it's just not backed by a commodity. That's why it is currency by fiat. Company scrip is fiat currency and it's not issued by any government.

I get that you crypto fans don't want your currency backed by nothing to be the same as all the other currencies backed by nothing except that, unlike crypto, nations actually support them and their citizens use them en masse, but that's just the way things are.

[–] [email protected] -1 points 4 days ago (2 children)

You're just being obtuse. It does no good to argue about some obscure definition of the term, when that's not how it's being used.

Company scrip can also be issued by a central authority.

I think crypto is stupid, but so is your made up argument over terminology.

[–] FlyingSquid 1 points 4 days ago* (last edited 4 days ago) (1 children)

It's not an obscure definition.

But fine, if the any government adopts crypto, like some people seem to want, it will be fiat currency.

[–] [email protected] -5 points 4 days ago

Don't feed the troll.

[–] zergtoshi 1 points 4 days ago (2 children)

What about if you take out inflation and offer transactions for zero fees while operating a network with little appetite for (electric) energy?
That would mean you'd never be left with dust amounts you can't spend and no entity could debase your holdings by issuing more currency units.
Then the price would just be the result of supply and demand.
Of course that's not what that teenager did or what the vast majority of cryptocurrencies do, but how it could and should be done.

[–] TwentySeven 1 points 2 days ago (1 children)

Inflation IS the result of supply and demand (and other market forces such as the velocity of money).

You would need a mechanism to control the value of the currency to prevent inflation. Maybe an institution that offers loans could achieve this by adjusting the interest rate.

It would have to be a government entity, you wouldn't want this responsibility to be in the hands of anyone with a profit motive. Maybe some kind of reserve bank operated by a federal government. We could call it the Federal Reserve.

[–] zergtoshi 1 points 2 days ago

You're righr. I wasn't specific enough. I meant inflation of the supply, the currency units. Increasing the supply can cause loss of real purchase power aka inflation.
With a stable supply and only the forces of supply and demand in place, real purchase power loss or increase are possible, which means there can be inflation or deflation.

[–] [email protected] 1 points 3 days ago (1 children)

Then the price would just be the result of supply and demand.

Since financial institutions will still own most of it, it will still be the same, except instead of the central bank doing it publicly, random hedge funds will be pumping and dumping randomly, and we can all go "the market works in mysterious ways".

[–] zergtoshi 1 points 3 days ago (1 children)

If financial institutions own most of it and aren't regulated accordingly, what you say seems to hold true.
As soon as there's sufficient regulation in place or financial institutions don't own most of it, it won't look so bleak.

[–] [email protected] 1 points 3 days ago (1 children)

I mean they already do own most of it, and crypto proponents specifically like it because it is unregulated.

Wouldn't be crypto if the Fed would have a say in its value.

[–] zergtoshi 1 points 3 days ago (1 children)

Are you saying that financial institutions own most of all crypto in existence or do you mean Bitcoin specifically?

[–] [email protected] 1 points 3 days ago (1 children)

Financial institutions own most of everything in existence at this point, but Bitcoin specifically I'm sure they own enough for some nice pump and dumps.

It's not like it will be on their official books.

[–] zergtoshi 1 points 3 days ago

Yeah, that may very well be the case and it's hard to verify or falsify it.