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Coffeezilla, a YouTuber Exposing Crypto Scams


Blockchain has two proven use cases:

1.) Speculative investment assets.

2.) Moving value outside of a financial system.

Unregulated stable coins have proven to be as stable as the titanic was unsinkable.

Number 1 is really a problem because of Number 2. Number 2 is a fancy way to describe a primary use case being money laundering. Of course though there are some instances where that’s helpful like backing a foreign government you agree with. Unfortunately, it also means countries like North Korea can use it to evade sanctions.

Blockchain is largely a solution in search of a problem with speculators throwing money into stuff they don’t understand.

I’m a reformed blockchain enthusiast.


What do you mean it’s a “solution in search of a problem”? It solves a very clear problem: lack of scalability of traditional Ponzi schemes. That’s why most of the answers to criticism of cryptocurrencies is usually “it’s not much worse than the kind of thing that led to the 2008 crash”. For crypto enthusiasts the problem is not that scams exist; it’s that they didn’t get to join them early enough.


Traditional ponzi schemes didn't have a scalability problem, they had a marketing problem. Cryptocurrency solves that by adding hand-wavy tech hype.


> Unregulated stable coins have proven to be as stable as the titanic was unsinkable.

When in the last five years have you had difficulty cashing out USDT, USDC, or DAI at dollar value?


Because past performance is _always_ indicative of future performance, am I right?

> When in the last five years have you had difficulty cashing out USDT, USDC, or DAI at dollar value?

You could have said the exact same thing about Terra/UST right until sometimes last week. It works until it doesn't.


Same could be said for US dollar as a world currency, couldn't it? Do you think its model is sustainable?

British pound has enjoyed a long history and was used as a currency for international trade until early 20st century. Then dollar took over.

One could argue it's because USA emerged from WW2 as a super-power.

But it would be foolish to say that only a major war or a fall of the empire will change what currency people use.

I'm not arguing for Terra as it was really a bad design. But it is odd that so many people just reject the idea of cryptocurrencies.

It's a big sandbox, big experiment with thousands of people working on the new primitives. Even if 80% projects are scam or failures, 20% might be revolutionary. The US dollar as it is today went through several iterations

It was kind of a stablecoin in the early days, pegged to the value of Spanish dollar which was more popular. There were also Continentals that failed and many colonial currencies that were outlawed IIRC.


Typically, past performance is indicative of future behavior. This is why statistical modeling in social sciences works somewhat okay. But there are extrapolation regions or shorter memory missing prior events that cause behavior to deviate from status quo expectation.


1. UST hasn't existed for 5 years, the others have.

2. "Algostable" coins are experimental, and this one was propped up by ponzinomics on Anchor. It is not comparable to collateralized stablecoins, and claiming otherwise is intellectually dishonest.


no, terra is an algorithmic coin, the ones that are 100% backed by IRL assets are flawless


> When in the last five years have you had difficulty cashing out USDT, USDC, or DAI at dollar value?

Wow, naming USDT was a bold choice since Paolo's answer as to why they can't tell you what backs it was almost verbatim what Skilling said when asked why Enron couldn't provide a balance sheet. [1]



I thought I was listening to a podcast but it seems I accidentally stumbled into a butcher.


Have you ever redeemed Tether?

As opposed to selling it to another chump on am exchange?

Have you ever taken your Tether holdings and redeemed them at for US Dollars?


My impression is that at certain exchanges that accept USDT (eg. bitfinex), you can withdraw your USDT for "real" USD wired to your bank account. Isn't this effectively redeeming it, even if you're not directly transacting with Tether Operations Limited?




With a corporate account, not personal, but yes. They make it relatively simple. I don't imagine it's any different for an individual, aside from the verification process.


> When in the last five years have you had difficulty [snip]

When until 2008 did anyone have problems with their holdings in Bear Stearns and Lehman Brothers stocks?

Things are OK right up until they aren't any more. Afterwards this can seem (painfully) obvious. Beforehand, less so.


USDT and USDC are certainly not "unregulard stable coins". DAI is collateralized and well-designed. In fact its value were often above $1 in the SAI days until the USDT-USDC-DAI pool was created and it became possible to mint $1 DAI with $1.01 USDC.


If you can’t learn from examples, I guess you’re gonna have to learn by experience.


your talking points are from like 2012 man. off the top of my head: remittances, online retail, trustless decentralized computational systems


Maybe people wouldn't repeat the 2012 talking points 10 years later if crypto had improved in any way since then. But no, all that has happened is the growth of a massive speculative bubble on top, while the fundamental issues remain the same.


Remittances and online retail is already done quite well with centralized systems. "Trustless decentralization" is only relevant when you are doing things illegal. Which, as it turns out, is the main usecase of cryptocurrency.


“Nothing to worry about if you’ve got nothing to hide” goes back even further than 2012.


this is the exact same argument as politicians saying that encryption is only useful for child pornographers


I thought this too, but then looked into and saw that fiat currency use for illicit things is an order of magnitude more then crypto (as a percentage of total use).


zero knowledge proofs have other uses, for example proving to your family members no-one has bought the same gift for the same person, without revealing the nature of the gift.


Can you link a couple of sources that show companies that successfully leverage this use cases?


i run a small retail business that only accepts crypto and it's been doing fine


A trustless descentralized system that manages to process a handful of operations a second by spending as much energy as a country?


remittances - money laundering.

online retail - drug & illegal sales - essentially money laundering

trustless decentralized computational systems - There is still trust, it's just in the code. Which also tells you how "decentralized" they are.


i urge you to think about things a little bit before talking


Trustless or distributed trust (up until the point of a 51% attack)?


fair enough, but in the same way that conventional systems are only 'secure and encrypted up until the point of being beaten with a wrench'


I disagree strongly that moving outside of the financial system is primarily used for money laundering. Bitcoin is great for censorship resistance, and for offering an alternative to oppressive monetary policies. Here's a good article touching on some of the use cases outside of the US:

In the long run, I hope Bitcoin's existence will also lead to better monetary policies since governments have always assumed a monopoly on money, and now there's finally some true competition. And competition leads to better outcomes for consumers/citizens.


Currencies did a lot of centralizing on their own. One currency is much more useful to its owner than 500.

Ain't nobody want to spend time converting from the 500 down into one so they can buy an expensive widget that only accepts a specific currency


> Number 2 is a fancy way to describe a primary use case being money laundering.

That's not entirely true. I think a more principal use case for Number 2 is purchasing things (dark web drugs, gambling, etc) outside of the usual centralized financial system rails which would stop them at the edges.

Bitcoin seems like a poor choice for money laundering because of how traceable it is; you'd need to use privacy coins for that, and even then, it's questionable (51% attack is doable in the same way that many Tor nodes are compromised).


The main value proposition of crypto is cryptographic security. You cannot confiscate crypto like you can other assets (unless obv. you have the key or miners somehow collude). Is this worth $1 trillion? Probably not.


> You cannot confiscate crypto like you can other assets.

You're correct. In most cases it's dramatically easier to confiscate the crypto. See: the horde of people who've had their cryptocurrency and NFTs stolen. To say nothing of the uncountable Bitcoin billionaires who've had a hard drive crash, lost their keys, forgotten a password, etc.


this is not the same as the cryptography being broken

losing crypto due to hardware failure or forgetting keys is not the same as someone taking it by breaking the cryptography . If this were possible, there is tons of crypto right now for the taking. It's a self-funding bug bounty.


Stablecoins without collateral backing them have repeatedly failed (and they failed when they were tried before crypto too), but dai/rai/usdc are working fine.

At this point I’d like to sees US regulation around $ stablecoins so we can use something else and reduce the power of the US dollar in the world. Go ahead America, regulate yourselves.


> they failed when they were tried before crypto too

do you have references to non-crypto based coins? also recent ones?


I've followed Coffeezilla for a while. I was doing an AI course from another youtuber named Siraj Raval in 2019. The course ended up being totally amateur and full of empty promises.

Mr Zilla did a video about it: 'AI Guru makes $238,800 with misleading paid course. doesn't credit developers. | Siraj Raval FGF'

Then Zilla started exclusively focusing on crypto/NFT scams. The first few were interesting. Now... its a quite tedious, "the blockchain never lies...look they pulled the rug..." yawn

I hope he goes back to covering other interesting topics again.


Before this he had a long streak of exposing business gurus selling online courses.


Agreed. It was a much more interesting channel when it was about scams in general. I suppose bsc shitcoins and what not are just easier to make videos about and it gets the views


I guess crypto videos get him more views. Most of the videos are super boring, like yeah who would have thought that some shady YouTuber promoting a token on Binance Smart Chain would turn out to be a scam.


Yep. Ironically I felt he turned into the very thing he was uncovering. Towards the end of 2021 he made this promise to donate X dollars to a charity if he reached a million subs. It came across as pretty disingenuous.


Coffeezilla himself is invested in crypto, so this type of content is now very much in his wheelhouse.

After all, being a youtuber is all about monetizing your hobbies.




Good for crypto. I'm a crypto enthusiast and I think crypto has a great future and work in the field.

However because of many scammy projects the whole crypto ecosystem now has a bad name.

I'd love to see more and more scams being exposed for healthy adoption with less manipulation and real investment to projects that have the potential to change things instead of 400000% APYs.


So what are real use cases in your opinion?

Something which really need crypto/Blockchain and is really trustworthy?

Something which doesn't break the trust Anker of a Blockchain by having any dependency outside of a Blockchain.


"Something which doesn't break the trust Anker of a Blockchain by having any dependency outside of a Blockchain."

Only the critics look for this type of weird ideological purity. the rest of us just want somewhere to use the value we create.


I'm totally lost on your statement.

So you try to use this tech for tech sake?

Independent if there is already an existing solution?

A project is trying to add Blockchain technology into a project I'm working with. Just that the Blockchain is owned by some company and that company was publicly asking people I don't know if they are able and motivated to operate a node for them.

This for example sounds way more complex than just creating a company which has the purpose of being the trust Anker, implemented with technology like CA, contracts etc.


> Only the critics look for this type of weird ideological purity. the rest of us just want somewhere to use the value we create.

Yeah it's called the entire existing global financial network. You're creating things that have no value. Sorry, it's tough to hear, but you've been building baloney. Just building isn't good enough.


I think we shouldn't try to "retrofit" existing mechanics into blockchain.

It brought a whole new potential of "programmable money" and being able to tokenize everything with users in control and no censoring (at least generally in theory).

We should be building dApps that incentivize sharing/hosting things (e.g. Databases (Bluzelle), files (Sia/Filecoin/IPFS), hosting (again IPFS and perhaps some Tor-like layer that can "talk" to blockchain with any kind of servers), providing data (prediction markets/Augur) which can all coordinate with chains and tokenize any good behavior and sharing resources with incentives at a global level.

Crypto should not be for "web2 and below", it should be for "web3 and above" (sorry for the buzzword, but it really defines the culture that I'm talking about). It should perhaps be a whole new layer on top of TCP/IP, and can coordinate with the regular web at interface points, otherwise being a whole new thing by itself.

But we will need some sort of transition and Metamask on "regular" sites is doing well (but not enough yet) for now.

Most of the examples above have perhaps more efficient applications already, but they are all controlled by other entities. I believe blockchain is more about philosophy of every "thing" being addressable and "actable" using a private key that can sign anything publicly with no authority (which is the most important point), and blockchain is the main application of it, yet.


Yeah like network of trust with pgp keys.

I'm a big fan of it and joined plenty of signing parties but I will tell you a secret: no one else cares.

No one cares about 2fa, backups, decentralization for decentralization sake, security...

Even the crazy Snowden findings.




I'd like to see someone like this really try to explain the global non-crypto currency system as it exists today in similar detail. This after all was one of the touted reasons for crypto - it would allow people around the world to hold wealth in a stable currency that wouldn't be subject to market crashes and currency devaluations.

There are so many interesting questions that remain undiscussed - such as, to what extent does petrodollar recycling matter any more in terms of the value of the $USD relative to the euro and other currencies, such as Chinese and Japanese? If investing in crypto is a scam, why isn't investing in these other currencies also a scam? It would be nice to see some real in-depth compare and contrast writeups accessible to people who aren't professional currency traders etc.


* > If investing in crypto is a scam, why isn't investing in these other currencies also a scam? *

I know very few people who recommend investing in currencies to begin with. You invest in either hard assets (intrinsic value that currencies get pegged against), productive assets (companies value that can increase as they become more productive) or government bonds (interest rate means you get more fiat currency back than you put in.) The advice for how much fiat currency to hold at any given time is to have an emergency fund and then put all other assets into something that can at the very least keep pace with inflation. The purpose of currency is to be a medium of exchange, not an appreciating asset.




Just because you don’t understand how the traditional market works it doesn’t mean it’s a scam. Sure, there are scams, and sometimes they are big and problematic, but there is also a global network of honest people working, producing, creating, and selling real, useful things, and all that is connected by the global market. It is not perfect, but human beings aren’t, so it will always be flawed, but the good things far outweigh the bad ones. Investing in crypto is not a scam by nature, in theory; it is a scam in practice. It is just how people use it, because there simply is no other use. The only reason someone buys crypto is to wait for it to grow, for whatever reason, so they can get rich easy. There is no other reason (right now) to expect crypto coins to grow in value other than speculation and hope. And scammers feed on that hope, that’s just how it is. They are not that different, by nature, from the traditional market, but right the bad parts are exacerbated and there are no good ones to counterweight. Once cryptocurrencies are connected with enough real products, services, etc they will have a better reason to exist, and to become a better investment. After all a currency is just a way to trade things, it is not a value in itself.


You can’t store wealth stably in inanimate things. Wealth is always social in nature. Currencies are claims on the future production of people who want them. Their future desires and capacities defines the value.


Inanimate things like mutual fund shares?


Mutual fund units are a claim on future production. They connect to the the animate. A gold coin can never pay you a dividend.


Gold. Other precious/rare metals. Property.

You are speaking of collectibles, not wealth/currency.


Gold's value is other people's belief in it being worth something, so they will trade other things for it. Same with other rare metals. Property has something close to intrinsic value in that it provides shelter, but the value of property is only realizable if the social context allows it to be realized -- your claim to a house is only as good as the government's willingness to recognize that claim, and to protect it for you when it is challenged by others.

Point is, the devastating attacks people think they're lobbing at bitcoin when they say that it's not 'backed' by anything are neither devastating, nor unique to bitcoin: unless you're talking about a commodity that people are consuming directly, nothing is backed by anything other than socially held belief.

That's all money is, when you unwind it all the way. The important question is what is the relevant society, and what beliefs do they hold?


The natural rate of return “saving” in metals is negative. Rust, security, and other storage costs are real, and inanimate things provide no return to carry them. And property is only valuable in the context of social uses. Else why is land so cheap in Detroit?


Property isn't always good investment. How well Detroit and other communities where manufacturing went away are doing?


Value exists only in the eyes of the buyer. Trying to lock value in whateverthing outside of the context of its use is exercise in creating false idols. And in that line of thought, central currencies have value just because the government says that they have value. As far as the common agreement is that governments are worth it, then central currencies will be the default stuff. This is the non-technological chain of trust that crypto bros are trying to fight. If they were not scammers, they would've noticed that this is the wrong place to attack it.

Find something that can do government's job better than the government itself and its mechanism of value exchange will dominate the world. In the meantime, do not invest in scams.


The forex environment is barely less corrupt and scammy than the cryptocurrency environment. It does have legit use (arbitrage mostly) that are 'useful' for the global economy and production chain, but most of the guys pushing it to regulars people are crooks.

And "investing" in a currency is a scam. It's like investing in an company with not only no profit, but also no sales.


The entirety of modern money seems to me like a scam. Questionable abstractions left and right, legal fictions left and right like there's no tomorrow. I started reading The Ascent of Money: A Financial History of the World by Niall Ferguson so that I can understand more, the first chapter explains Fractional Reserve Banking and... Holy Shit, that's a scam, no 2 ways about it.

It's terrifying what Modern Money is and how it works. It scares and enrages me. It enrages me how the 'Store of Value', the things we exchange for our precious finite labor, is now whatever legal fan fiction that an influential someone at wall street or an equivalent finds a funny idea and convinces enough of his or her ilk to accept.


When you use modern money you get the knowledge that the biggest militaries in the world are invested in maintaining its value.

You don't get that with many other stores of value


> I'd like to see someone like this really try to explain the global non-crypto currency system as it exists today in similar detail.

There was a video and thread on 'How (inter)national money transfers works' a couple of months ago


> If investing in crypto is a scam, why isn't investing in these other currencies also a scam?

Isn't the answer to this that other currencies are backed by the might (both economic and military) of nations? I don't think mainstream blockchains like bitcoin and ethereum are scams, but this is an important distinction between sovereign currencies and cryptocurrencies.


Coffeezilla is right.

ALL crypto is 100% scams. There is no 99%.

In fact 100% of the time, they have no use case at all and they are even worse than the current system.

Crypto has totally failed time and time again to prove itself.

We now need to come to terms with this failed experiment and call it all off and make them all illegal, where it rightfully should reside in.

I lament to think of the time wasted of many engineers building this distributed casino and ruining people's lives, these engineers in this 'web3' space should instead direct their time towards solutions to make the world a better place.


> We now need to come to terms with this failed experiment and call it all off and make them all illegal

Who is “we”? Ironically, crypto was invented to protect individuals against the authoritarian tendencies of people such as yourself. Your comment is making the case for decentralization.


"We" would be any nation with legitimate climate targets.


People should remember that blockchain does not require Proof of Work consensus. If you want to ban PoW, be specific about it. If you want to ban blockchain, don’t simply advocate for killing PoW since blockchains will exist without it.


>crypto was invented

What are you talking about? David Chaum? NSA? Mesopotamian cryptography?


You know that Edison didn't need to invent wires and glass-working to invent the light-bulb, right?


We stand on the shoulders of giants


This is the problem with the internet, it’s so hard to tell satire from actual cranks.


I don't know whether its attempted satire or not - but I unironically agree with it 100%.


Now, I wonder if this isn’t just a pot-calling-the-kettle-black comment. Who’s the crank? Who’s the satirist?


In case you didn't read the article, it clearly mentions that Coffeezilla himself owns some Bitcoin. So no, he doesn't think that "all crypto is 100% scams".


The whole "proof of work" concept regarding crypto is a sham. Normally, the expenditure of energy produces tangible products or services. In the case of crypto currency, massive amounts of heat is wasted to produce a number with questionable "value". I just can't wrap my head around this.


I've been thinking for a while that proof of work should be replaced with some other type of real work, such as training a Neural Net, but that runs into major issues after thinking about if for more than a second. Hopefully though, someone much smarter than me can figure something out


The "value" must be produced outside of the crypto system then moved into the system as a value store. I don't know how this is not an obvious concept.


It produces objective immutability of the transaction history.


It's a terrible way of doing that, and it isn't even necessary to produce an immutable record of transactions. Seriously, spend some time thinking about other models for distributed transaction records.

Blockchains are designed the way they are to prevent governance and oversight, meaning, if someone scams you or steals from you, there's no way to get your money back. "No backsies" is the most fundamental principle of their design.


Isn't it subjective immutability?

Your transaction might disappear from the history if the view changes to have some other branch be the accepted one


> `“I try not to be too negative about crypto,” he told me. “I think about how we can shape it into something better—more like the future that the people making it say they want. In that way, we’re on the same side.”`

Have you read the article?


This statement is false. Coffeezilla does not believe that "all crypto is 100% scams". Not even close. In fact, he stated in a recent video that he personally holds cryptocurrency.


Not 100%, but just as bad.

I'd say that is wild mix with hard-to-measure ratios of...

* scammers and crooks - who are attracted to crypto like flies on s***.

* the naive marks of scammers - who the scammers (and everyone else) are extracting from

* true believers - who find value in the concepts. They're willing to overlook the s*-show and actually believe in a libertarian pipe-dream of a better future with crypto as money.

* amoral speculators - who could not care less wtf crypto means but just want to dip-and-pull. They're "in it" ONLY insofar as they can convert the funny-money into real-money.


And yet the livestream giveaway scams persist on YouTube. Scammers earning so much. At any moment you can find at least 10 videos running concurrently, each with money in the associated crypto addresses.

The smart scammers are not doing NFT tomfoolery, they are doing fake Saylor and Musk giveaways instead and earning far more money much more consistently. While YouTube does nothing. Cofeezilla is not going to stop people from continuing to fall for these much more persistent scams. Its going to have to come from youtube.


As long as there are stressed and/or gullible people, there is an avenue for these "smart scams".

I distinctly remember getting junk spam physical mail as a kid, saying if you send back $60 dollars they will share the method to work from home / easy money scheme. It feeds on desperation and stress to hinder rational decision making skills.

We also have things like the lottery where people buy in to the idea theres a infintismely small chance to actually win but the emotional side of the brain takes over and ignores it.


Love Coffeezilla. Found his channel after someone posted his Tether exposé on HN a while back - subscribed and have been watching ever since. He's genuinely entertaining, smart and fair. Very much recommended if you haven't seen any of his videos.


I think I shared this on HN before, but highly recommend this podcast:

It covers Worldcom all the way up to the recent Terra


I've been in crypto for 8 years. Still it's one of my favorite podcasts.


A couple of years ago I watched a lot of Coffeezille, Spencer Cornelia and some others who exposed online scams. Initially, I found it entertaining but over time I came to the conclusion that their videos aren't really protecting anyone. They themselves (Coffee, Spencer, etc) admit on some of their videos do basically nothing to protect anyone from scams. You can literally shove tons of evidence in someone's face that guru X is a scammer, and they still won't believe it.

So, I have come to the conclusion that they (Coffee, Spencer, etc) are as much part of that whole ecosystem as the scammers themselves.

They don't do this to protect anyone - if they wanted to they can simply go with their evidence to the authorities. They depend on these scammers to make videos from which they can make money. And that is all it is about to them in the end - about making money. If the scammers went away tomorrow they'd be out of a career as well.


One of the more ironic xposers, was a guy named "waronrugs" Who then went on to make a coin and rug everyone.


Also, bitfinex'ed on Twitter (and previously Medium)