MLM Schemes and Cryptocurrency

Bill Gates didn’t get rich by telling anyone who would listen to him to buy Microsoft shares and that anyone who didn’t buy now before it goes up was a dimwitted Luddite who just didn’t “get it” and should “enjoy being poor!”

Neither did any of the other monopolists we love to hate. Very interesting.

I’ve noticed that MLMs and other get rich quick schemes that are either illegal, immoral, unethical, or otherwise antisocial, seem to have a few red flags that we see over and over again:

  • get in on the ground floor
  • gain financial freedom
  • build generational wealth
  • uses the latest technology

And then you have the negative side: the “thought-stopping cliches” to stop people in the MLM from escaping, even after staking their own money, time, and personal reputation on evangelizing the scheme to everyone:

  • self-help tricks such as visualizing success and positivity
  • excitement about future wins
  • pumping up the scheme to yourself and others already invested

Then you have the social proof from the people early in the scheme who have already made money, as if their success is typical or likely. You start putting symbols to show pride in your MLM-like scheme into your profile bio & photo, and you can’t stop evangelizing it to everyone. The people who have made money already become celebrities to the ones who haven’t made it, yet. Those who have lost money in the scheme slink away quietly and are quickly forgotten by the group.

The last stage is developing a compulsion to discredit, invalidate, and insult anyone who’s skeptical of any of the claims or predictions for the future that you’ve made, and you assume that the other person cares only about having more money, which is your proxy for “success”. That’s the MLM mindset.

The relevance of these “red flags” to the attitude of the crypto nerds on Twitter and elsewhere should be clear by now.

Any legitimate business model can withstand scrutiny without resorting to sleazy pitches, or insulting people who walked away from your scheme or are warning others to stay away.

When you feel compelled to lash out with a nasty comment like “enjoy being poor”, to publicly fantasize about how your detractors will be forced to buy into your scheme at ten times the price you paid, and you ask your followers to dogpile on skeptics with their own insults, you’re in a cult.

Money cults create a fantasy of independence from society: that’s what Bitcoin, NFTs, and other cryptocurrencies are selling.

The strategy is to get you to withdraw from unfair systems (working for a big company, being a citizen of a nation) to swear allegiance to a new pyramid.

There’s an easy way to look at the big picture of whether any system is just or unjust, and that’s through the “veil of ignorance” or “original position” thought experiment posed by philosopher John Rawls: would you be happy to be incarnated as a random person in your desired world system?

The big problem I have with the greed of the Bitcoin and other cryptocurrency supporters is that their Randian worldview is cruel and they like it that way. They don’t want to be a random person in society. They want to be at the top, lording their power over others. Obviously.

No socialist or left-wing person ever says “enjoy being poor!” to anyone, poor or rich. But if every human was taught to be extremely predatory and greedy about everything, as Ayn Rand and her fans believe would be a good idea for society, life would be miserable for everyone.

The whole purpose of even having a society is so that we aren’t constantly on guard thinking any stranger we see on the street or even our own friends and family could sneak up and stab us in the back or poison us or do whatever they wanted to try to gain a temporary advantage.

That’s the pent-up anger and alienation that the crypto schemes are harnessing. The idea that nobody can trust anyone else led to the creation of a distributed algorithm intentionally designed to use the most electricity so that the greediest people could generate gigabytes of ultimately meaningless and futile logs of transactions which they pretend has some higher purpose, when it’s actually literally worthless hashes upon hashes of nothing.

The “coins” they’re minting are worthless. There’s nothing there except that the value has been steadily pumped up through this cult mentality of wanting to create a new pyramid scheme in order to be at the top of it. Bitcoin and its imitators represent nothing of value to humanity. They represent only monstrous greed. This can’t possibly end well. Not in the long run.

We’re already burning up the planet burning fossil fuels in order to create constantly increasing “economies” so that the people at the top of our current unsustainable pyramid scheme of unregulated capitalism can get a little more wealthy in the current “fiat” money system.

Despite all the problems of our current system, we have no choice, as a species, but to try to fix it, and to not get distracted chasing the greed of an objectively worse and far bigger Pandora’s box that intentionally creates no value to society while wasting the maximum energy.

There’s no justification in the long or short term to support or invest in a pyramid scheme designed to harness and focus the maximum amount of greed on collecting meaningless numbers in a massive distributed database that pretends to be “independent from governments” and yet parasitically layers itself on top of creations of the current system that would become unusable or disappear in any sort of societal disruption: reliable global Internet access, production of ASICs, power supplies, and other electronic components, solar cells, fossil fuel power plants, hydro power, and governments to protect private ownership of their computers.

The libertarian fantasy of freedom from the outside world that they’ve constructed at great expense is a mirage, an illusion. That’s why they get so angry whenever anyone suggests it might be taken away from them. “We’re doing this and you can’t stop us” is their motto of last resort. Well, there aren’t that many of them, and the governments of the world are the ones making the laws.

Governments have the power to outlaw these pathetic, wasteful, mediocre money schemes as illegal pyramid schemes or illegal securities or both, and shut down the mines and the miners by this time next year, if we petition our leaders to shut them down. Can you think of a single rational reason why we shouldn’t shut down all the crypto exchanges for the good of humanity? The fantasy will have to end sooner or later, and I’d prefer to end it sooner before more people can get hurt.

I'm a software engineer in the Los Angeles area specializing in mobile applications and embedded systems.

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