Fear of missing out in crypto and the final realm of FOMO

FOMO has many levels of experience, but its final realm probably belongs to a person who creates “Idiot Coin” with his own money to test the FOMO of the market. 

*This is the "WordStory" series that explains crypto terminology through featured stories.

FOMO: Rolex, handbags and cryptocurrencies

The lowest priced, stainless steel version of the Cosmograph Daytona, the Rolex model that American actor Paul Newman famously promoted, has a suggested retail price of $14,550. But you can hardly buy such a cheap one. According to WatchCharts, a price database for watch collectors, a current model Daytona sells for over $40,000 on the secondary market.

Not only have the prices of high-end watches skyrocketed during the pandemic, over the past few years the prices of a wide range of collectibles - fine art, classic cars, luxury handbags, sneakers, comics and delivery cards translation - also rose to an unacceptable new height. Besides, it is impossible not to mention cryptocurrency investments.  

Cryptocurrencies are also being pumped up by the same force that inflates the Birkin bag market – a lot of money is pouring out around the world and the fear of missing something makes people wait a few years to buy one. Rolex often splashes several thousand dollars on a dubious crypto project.

FOMO  is hell full of drugs. Because when the price goes up and you feel the fear of missing out, you can imagine the intrinsic value of anything:

• The mechanical wristwatch is a marvel of miniaturization, almost a work of art with exquisite complications.
• Or: Algorithmic stablecoins are the feat of fintech, an old-fashioned way of reforming banks and payment networks on blockchain to create an open financial infrastructure.

Huh? What? I don't know what these mean either, but that sounds cool! And, more importantly, others think they're "cool". FOMO!

FOMO: You're in the dark and someone turns on the light

FOMO (Fear of missing out) is defined by the Merriam-Webster dictionary as “the pervasive fear that others may have worthwhile experiences in their absence”. This means that people are afraid of missing out for fear of failure or making the wrong decision.

FOMO is considered by many to be the cause of the rapid rise and fall of the Bitcoin price in 2017. Why? FOMO can cause people to act impulsively. If you are afraid of missing an opportunity, you are more likely to make risky decisions because this fear will weigh on your judgment. 

FOMO can be compared to when you are in a dark room and someone turns on the light. Since you didn't know what was in the room before that, you were afraid something might jump at you when the lights came on.

Psychologists have proven that once your fears are relieved, they become less frightening or even disappear. This is why FOMO is such a powerful emotion - people react to the sudden influx of information and forget that they can be scared for no real reason.

FOMO can have serious consequences in the crypto market, as it causes people to make impulsive decisions based on fear of missing out, leading to volatility as people buy fast and sell fast. 

Create “Idiot Coin” to test the FOMO of the market

FOMO has many levels of experience, but its final realm probably belongs to a person who creates “Idiot Coin” with his own money to test the FOMO of the market. That person was journalist David Segal of The New York Times. 

The brilliant Satoshi Nakamoto spent years building Bitcoin, but now you can make a “scam coin” as easy as ordering food online, says David. The whole process is automated and fast: what to name it, how many coins to generate… - it's all up to you.  

And so, in May 2021, David created his own cryptocurrency. He did this via a Zoom call with Dan Arreola, a 36-year-old man from Taiwan. This person posted a tutorial on YouTube on how to create and promote a “scam coin”. The video has over 240,000 views.

“The cheapest price to create a token is $8,” he told David.

That is if you use a site for the tech-savvy. For the newbies, there's Cointool.

“After a few minutes of adjustment and about $300 in fees, I pressed a button. Immediately, 21 million coins were minted,” David said. “I named them Idiot Coins.”

According to David, the name was one of the first signs that investors "shouldn't buy" the coin.

“I really don't want the coin to go up. I wanted it to fail spectacularly,” he said. 

The main concern of the coin scam founder is marketing - the art of convincing people that the coin can enrich all the buyers. There's a colorful coin scam PR guidebook online, which David just copied with a slight twist.

Then he hired a web designer to build the Idiot Coin website, under “How to buy coins” he wrote: “Step 1. Don't buy Idiot Coin.”

In the “Meet the Founders” section, David posts a picture of a bull terrier, the website also has a “ White Paper ”. Often project websites will give reasons why the world and investors need the coin, while David's website urges people to boycott it.

However, David still wants to explore the gimmicks of the coin scam – all facilitated by a range of freelance websites and providers.

“First, I made it look like a bunch of investors bought Idiot Coin, a ruse made easy by Cointool,” he said.

The “Bulk Wallet” button on the website instantly generates 100 crypto wallets, each with its own 12 security phrases. For about $70, David puts 100 Idiot Coins in each wallet.

“There is no way to know those wallets were made by the same person who made the coin,” he said.

Now it's time for David to advertise the "project" to crypto buyers. Through a website called Collabstr, he hired a TikToker known as Malki Means King with 5 million followers to post a video honoring Idiot Coin.

Finally, he posted an announcement on CryptoMoonShots, a Reddit site to announce new coins. Usually in the announcement, the coin creator will predict the orbit of the coin he created, and David:

"Definitely not 'go to the moon', maybe not even a centimeter off the ground." 

To make sure the announcement was seen by as many people as possible, David purchased 100 Reddit “upvotes” on a website called Soar.

“Generally speaking, the coin and its artificial hype cost about $1,000 in total,” he said.

Yes the time is set, on 2/7/2021 the CryptoMoonShots announcement came out, Malki posted TikTok, everything went live. David sat still and hoped for the worst. Quickly one person commented under the announcement:

“My favorite Bollywood movie of all time is 3 Idiots. So I will buy 3 Idiot Coins.”

However, with the strange marketing, not much happened with the "project".

“Four people, or bots – hard to say – bought a total of 73 Idiot Coins,” David said. "It was a total bankruptcy, fortunately."

No one was financially harmed, but the community of around 300 people on Idiot Coin's Telegram channel seemed disappointed.

“Many people were confused. Others sounded like members of a flock desperately looking for a preacher. They want to hear the gospel of the impending riches,” David said.

“Why are you so pessimistic about this coin,” asked a man named Dylan. 

David disappoints these people by refusing to promise they will become rich.

“Should we buy or not!” Pro Developer_1 asked.

“No,” David replied.

“OMG,” George Mike wrote. “Am I in the wrong group?”

Epilogue

The purpose of David spending money and effort to create Idiot Coin is to prove that the birth of a jagged coin is not difficult, does not require expertise and almost no legal supervision. If marketed in a different way, strongly hitting the FOMO of investors, maybe the Idiot Coin “project” has had a different end.

The fear of missing out, the dream of instant wealth has been around since the time the world invented money. Only the property origin is changed. Gold, tulips, and mortgage-backed securities have all become investment vehicles for FOMO investors. And now cryptocurrencies.