-- The world has gone insane, but we have to remain rational.
There is no denying that the recent South Korean survival drama Squid Game is probably going to be the biggest online series this year, reaping enormous international attention and praise.
As of November 2021, Squid Game has become Netflix's most-watched series, becoming the top-viewed program in 94 countries and amassing up to 142 million members during its first month of release. Along with the incredible viewing figures, came the cryptocurrency scam in the name of the drama.
From Squid Game to Squid Scam：
Inspired by the popular Netflix series, Squid token developers have created digital squid tokens used in online games with the "Play-to-earn" mode where buyers can earn more tokens and later exchange them for other cryptocurrencies or national currencies. The tricky thing is that the value of one squid token has soared from 1 cent to over $2,856 within a week. What’s even worse, buyers found out that they are literally trapped in the game set up for them because they are not allowed to resell their tokens, making the tokens completely worthless. On the other hand, the developers have made a fortune of an estimated $3.38 million based on the reports of the technology website Gizmodo. In fact, evidence has indicated the probability of scam, such as the poorly edited website and the sudden disappearance of social media accounts of Squid token.
Shocking crypto scams are on the upswing:
Cryptocurrency critics have warned that the public should never be too naïve in terms of cryptocurrency because the world is currently plagued by stunning cryptocurrency fraud schemes during the past decade since Bitcoin gained popularity. Reports of UK fraud-alert service Action Fraud have revealed that, crypto investment scams in 2020 surged by 57% to 5,581, with investors losing up to £113 million. Similarly, total losses in the US mounted up to $80 million between October 2020 and April 2021. And the numbers have been climbing since then.
The fact is that most people have only heard about the considerable growth of Bitcoin, but few really bothered to dig deeper to find its logic, what it has brought to this world and how it has made people crazy about it. Bitcoin has played a critical role in bringing about all the chaos.
Background of Bitcoin:
The outbreak of the financial crisis in 2008 put banks and other financial institutes under public scrutiny, which turned out to be a perfect opportunity for cryptocurrency creators. The very beginning dated back to the white paper of Bitcoin which was invented in the name of Satoshi Nakamoto right after the 2008 subprime crisis, saying that this peer-to-peer electronic cash system could facilitate the online transfer of money from one to another without going through a financial institution with the so-called "highly secure" blockchain technology. With roaring mistrust and lack of credibility for central banks, people started looking at this new currency. And with more people investing in it, each Bitcoin has appreciated to over 53,000 USD from 0.39 USD and ignited tens of thousands of crypto scams in recent years.
Why do people believe in it ?
The digital coins themselves do not carry or generate any value. They just rely on people’s belief that they are going to be the future currency. In this sense, it’s easy to understand why cryptocurrency promoters and investors seem so passionate and trusting in it because making more people believe in the future of cryptocurrency is how they make a return on their investment. To put it simply, it is another kind of pyramid scheme. Only the upper levels or early birds end up getting rich in the process of currency appreciation. The rest ends up bankrupt. It’s all about the common dream of getting rich one day. When the bubbles burst, people wake up.
How to avoid cryptocurrency scams ?
1. Look critically at digital coins because they don’t deliver anything tangible.
2. Never think that you are the lucky one or think that crypto is easy money.
3. Learn about the scams and stay away from the traps.
4. Be careful with your identity and personal information.
5. Set limits on your investment, and never attempt to invest more than you can afford to lose.
6. Diversify your crypto portfolio.
733 words
by Jingjing W
Sources:
November 2 2021, << Squid Game crypto token collapses in apparent scam >>
https://www.bbc.com/news/business-59129466
Tom Rodgers, November 19 2021, << Six cryptocurrency tips (and five mistakes to avoid) >>
https://www.thetimes.co.uk/money-mentor/article/crypto-tips-mistakes/
Herb Scribner, Nov 1 2021, << This Coinbase user lost $11.6 million in a cryptocurrency scam >>
https://www.deseret.com/2021/11/1/22757864/cryptocurrency-scam-coinbase-bit-coin
Eswar Prasad, July 20 2021, << The brutal truth about Bitcoin >>
https://www.brookings.edu/opinions/the-brutal-truth-about-bitcoin/
Emma Newbery, Aug 7 2021, << Americans Lost $80 Million to Crypto Scams in 6 Months. Here's How to Avoid Fraud >>
James Jani, May 10 2021, << Bitcoin: The Future, or World's Greatest Scam? >>
Hello, Jingjing. It's very interesting that you write about how cryptocurrency works. As the originator of cryptocurrency, Bitcoin is to some extent a product of people's reflection on the 2008 financial crisis. Although the current cryptocurrency market is mixed and lacks regulation, it does provide new ideas for financial development. In 2021, many countries around the world are actively promoting the research and development process of their respective central bank digital currencies and China is also digitalizing its RMB. Although digital currency and encrypted currency are not the same thing, do you think that digital currency also has those risks of encrypted currency?
ReplyDeleteHi Ting, first of all, thanks for your interest in my report and your kind question. Yes you are right that cryptocurrency and digital currency are not completely the same thing and not entirely negative. Some digital currency released by powerful central banks or backed up by governments may be reliable investments too. Relatively speaking, their risks are lower. Despite that some governments are on the way to regulate digital currency, we still need to wait until practical regulation and policies are carried out as a real protection. By contrast, most cryptocurrencies are invented by private entities or even anonymous persons. Practically speaking, these virtual tokens are usually developed by those who are good at software engineering. It's difficult to keep track on them and get the money back once buyers find it a scam. What's more, every single scam might take considerable time for the government to tackle or decrypt. The chances of getting the money back are quite slim. In conclusion, the core issue about your investment is how much you trust in it. This is my perspective. Generally speaking, I think that it's better to remind the public of the risks for them to safeguard their assets than to encourage them. After all, there are many kinds of investments for people to choose from.
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