On Monday morning I woke up to a pair of odd DMs on Twitter. “Sir, Greetings, Do you have any information about Dejitaru Tsuka token,” asked one “Dr. Joker”; another had a similar question: “Yo dude what do you know about Tsuka.”
I’d not heard about the cryptocurrency, and a quick scan suggested it wasn’t worth my time: it was a classic “shitcoin”, a newly created token with no reason for existence beyond buying low and selling high.
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Gambling on shitcoins takes the subtext of much of the crypto space and turns it into the entire purpose. There is no pretence, here, of anyone banking on widespread use, or of the coins having a purpose. The game is to find one that will go up, buy it cheap, push it as hard as you can to others, and then cash out at the top. The community takes phrases usually associated with financial crime – “shilling”, “pump and dump”, and so on – and wears them like a badge of honour.
Tsuka was a classic of the form. The only explanation on the public web for the token was some mangled English describing a Japanese legend that destines “the dejitaru tsūka dragon to breathe vast flames of wisdom and prosperity to all who embrace its ferocity and strength” linking, of course, to some exchanges where you could buy the coin.
So I assumed the DMs were the “pump” phase of pump and dump, and ignored them. But then I got a follow-up message, asking me if I was behind an email address “hernalex@proton.me”, that the developer of the Tsuka coin had posted on to the blockchain, with the note “encrypted Guardian contact”. One buyer had emailed the address, and, thinking they were speaking to me, asked if they knew anything about the coin. A one-word reply, “Yes”, helped push a buying frenzy – of sorts.
The numbers are low: before my name was used to promote the coin, it was trading at eight ten thousandths of a cent (that’s $.000008), and after a massive rally it had reached the dizzying high of almost twice that, $.00015. But that still represented around $100,000 of notional value built on a lie.
But I had to try to correct the falsehood. I managed to find the main community channel for Tsuka, on Telegram, and joined its membership of 150 or so users before posting a quick message: “I’ve got nothing to do with this project. Someone is pretending to be me.” But I wasn’t able to see the response – I was swiftly kicked from the group, and my post was deleted.
The damage had been done, though. I’d also changed my Twitter bio to warn people that “if someone says I backed their shitcoin, they’re scamming you,” and – I later learned – that was being re-shared into the group faster than it could be removed.
The coin went into freefall as people rushed to sell, dropping half its value in a matter of minutes. It felt strangely terrible to watch: even though the whole sector is a giant game of trying to find someone else holding the bag when all is said and done, it was my actions that had wiped more than $60k from the total “market cap” of the coin.
One user DM’d me to confirm my story, and told me he’d lost his “life savings” in the crash – $400, a fairly substantial chunk for a Turkish man like him, around a month’s salary on the median wage. When he suggested I reimburse $200 to everyone who’d lost money, though, I had to demur; there may be an income disparity between the UK and Turkey, but I don’t have $200,000 to hand.
My guilt was assuaged a bit once I started asking people why they’d bought in to Tsuka in the first place. “I blind aped it on Dextools,” one told me. That is: a coin they’d never heard of showed up on the new coin list on a crypto exchange, and they invested in it – or bet on it – sight unseen. The Turk had the same explanation; when I asked him if he was really telling me that a random currency showed up and he just put his life savings in it, his response was “true bro. it is crypto talk”.
Dev speaks
Shortly after the collapse, I got an email I wasn’t expecting – from the ProtonMail account that had pretended to be me. I’d emailed over some questions, but wasn’t expecting a reply. What do you say to the person whose identity you stole?
The answer, it seems, is “a marketing pitch”. The developer told me that “the community has passed a critical part of this experiment … We follow your work and writings and are sorry if anyone took that as you were behind the coin. The main thing is you were reached through the block chain only. It’s not in anyway a scam.”
I asked how they could deny trying to scam people into thinking I was involved. They said they’d intended “Guardian” to be taken in the sense that they were the Guardians of the project. “I also follow your work closely so the names went well together … I never said you were involved. I guess it’s like Mickey@waltdisney.com vs Mickey@protonmail. Is mickey@protonmail a scammer if he builds a theme park? We don’t know.”
I thought the impasse was just the natural result of me speaking to a brazen huckster, but the more I asked around, the more it became clear that this was more like two people speaking at cross purposes. The still anonymous devs are sincere that they aren’t scamming anyone, because the meaning of “scam” in the world of shitcoins is necessarily narrow. When the base expectation is that every coin will crash at some point, and none of them have any real value beyond marketing puff and community momentum, how can simply lying about who backs a coin really be a meaningful scam?
To the dev, my accusation that they were scamming people was a serious charge. It implied that they had hidden code in the coin that would allow them to take people’s money in a way outside the rules of the game – perhaps by suddenly printing millions of tokens to flood the market, or locking it up to prevent anyone else from selling. By contrast, spreading falsehoods about who’s backing the token is well within the rules of the game. “DYOR”, do your own research, is a catchphrase in the sector; if you’re caught out by such an easily-disprovable claim, then you clearly failed to DYOR, and the losses are your fault.
Act three
I thought that was where this newsletter would end – someone pretended to be me, I burst their bubble, and learned something valuable about the world of crypto. And then I checked the value of Tsuka one more time, expecting to find it hovering around zero. Instead, I was surprised to find it had gone up.
I asked a few of the investors in the coin, and was alarmed to find that not only had people started buying back in, but there was a growing theory that I was in fact the developer myself, and my claim to have been imitated was some sort of genius double-bluff. A new telegram had been set up, with an experienced shitcoin influencer at the helm, and I asked for a link, preparing to do the same dance again.
What happened was unexpected. Upon proving that I was the real Alex Hern, I was greeted with a wall of glee. One user spammed the phrase “YOUNG_HERN_IN_THE_HOUSE”, another posted “ITS_FUCKING_ALEX”. “ALEX NEXT ELON”, “ALEX SAVE OUR BAGS”… before I could even post my first real message, someone had sent “ALEX TYPING” fifteen times. Where my first appearance had felt like a parent breaking up a illicit house party, this felt more like the second coming, with me unwillingly cast in the role of Jesus.
Things got worse when I said I wanted to speak to people for a story about it. No matter how explicit I was that I thought the entire thing was dumb as hell – dumber than I thought was possible for an already extremely-dumb sector – news of a forthcoming article spread like wildfire. “All publicity is good publicity” was spammed into the channel, with one user pointing out that Shiba Inu, a shitcoin worth an inexplicable $7bn, had had a very similar genesis, with the majority of its early press simply mocking it as a low-effort clone of the original shitcoin, Dogecoin.
Epitaph, the crypto influencer who was responsible for the rebirth of the coin, argued that the whole affair should be less alarming than it feels to me. “Right now it’s pretty common,” he said. In terms that were more fitting for a multiplayer video game than any sort of functional financial market, he explained that “a couple months ago, the meta shifted into ‘LARP tokens’, tokens where the team will go to extreme lengths to convince buyers that they’re connected to famous celebrities/musicians/larger tokens.”
When I asked if others had also tried to head off such “LARPs”, I didn’t get the answer I hoped: “It’s somewhat rare that someone with high-profile actually drops in, although not unheard of. Last week, Martin Shkreli participated in the Telegram communities of two tokens that were launched as homages to him.”
I’m not sure I want to be in a club with Martin Shkreli.
In the meantime, the Telegram channel was moving so fast that I could see history being corrupted in real-time. “I’d like to ask some questions for an article” had become “Alex Hern is going to be promoting Tsuka in an article”; others took that claim outwards to Twitter, and to other Telegram channels. Each time I tried to correct them, my reappearance in the chat was seen as yet more evidence that I was personally invested – literally so – in the success of the coin.
Given the end stage of Tsuka is almost certainly going to be “crashes and goes to zero” just like every other shitcoin, I started to get quite concerned. The bigger it grows, the harder everyone is hit when it collapses. I asked Epitaph if there’s any way I could have prevented this from happening: “The only way this wouldn’t have happened is if you actually had no involvement in the coin (I’m still uncertain what I believe) and you’d never set foot in the [telegram channel] at all. Then people would have known it was a LARP, and the token would be dead within a couple hours.”
But, he said, “you shouldn’t feel bad. Everyone here knows what they’re getting into, especially during LARP season. It’s no secret that everything we buy is a scam on some level. The question isn’t ‘is this token a scam,’ because they all are, the question is ‘is this scam done well enough to convince other people to buy?’”
If it isn’t clear by now: I do not think you should buy this shitcoin, nor any others. And if it also isn’t clear by now: people are going to carry on ignoring me here, and I’m sure they’ll have a lot of fun doing so.
The wider shitcoin Techscape
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If the idea of shitcoins as a big multiplayer video game intrigues you, I’ve just finished reading Adrian Hon’s book You’ve Been Played, which goes into some detail on the same idea. Every major social trend takes on the characteristics of an “alternate reality game” these days, from QAnon to Crypto, and it’s having a deeply weird effect on our societal fabric.
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My shitcoin adventure was mostly Telegram-led, but Discord is probably the more important social network for the crypto space, and guess what: it’s full of scammers.
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Remember Terra, the “stablecoin” that was anything but? It relaunched, and immediately collapsed. Also, in case it wasn’t obvious, the initial failure wasn’t the outcome of a deliberate attack, but simply a bad idea that finally broke. But it still ruined lives.