/biz/ - Business & Finance

>>2802332
Imagine if I went down to the beach and collected a bunch of pebbles. I convince a local community that my pebbles will be the currency of the future. It will be worth a LOT in the future because people will want to use my limited supply of pebbles to buy more and more goods and services. However I can let my pebbles go now for a low price! At first, people are buying my pebbles for a few measly cents, but as word spreads and more and more people want to buy my pebbles; its price rises exponentially. People keep buying expect their small investments to multiply 2000 percent, and eventually one of my pebbles is worth more than gold.

At this point, a lot of people have made a lot of money by buying pebbles at a lower price than they're selling it onwards to someone willing to pay more for them. Some people paid just a few nickles for it and now some other latecomers are willing to pay hundreds! If you bought a bulk of pebbles, that obviously results in easy profits! However, my pebbles still don't actually DO anything.

Eventually, two things happen; more and more people start realizing that they're holding a bunch of worthless pebbles, and less and less people are willing to buy pebbles for their now exorbitant price. The prices start crashing down as people panic and try to offload their pebbles to anyone who will take them.

Of course, meanwhile, I made sure to keep a few hundred pebbles for myself, and when the prices are jacked up really high, I offload them for a LOT of money. Welcome to the shitcoin game.