Memecoins
Are Meme Coin Traders Afraid of Getting Scammed? Psychologists Explain
It seems like this happens every day when someone gets scammed. pulled carpet investing in a currency even if it’s ridiculous. Most often, the investor doesn’t care and moves on to the next one Pump.fun token. It makes you wonder, though: Is that crypto degenerates Do you even care about being scammed?
Logically, people don’t invest money if they think they’re going to lose money on a meme coin, no matter how degenerate you are. But, once it becomes obvious that the project is a scam and the rug has been pulled out from under them, the investor needs to find a way to handle the experience.
“When there is a conflict between your beliefs and what is happening, we often change our understanding of our beliefs.” Christophe Chabrisformer Harvard psychology professor and co-author of a book on scams, Nobody is fooledsaid Decrypt. “We cannot change what happened, but we can change our view of our beliefs.”
Some victims will in turn rethink the incident in a positive way, for example by laughing. “You could call it a coping strategy, a defense mechanism, a rationalization or something else,” Chabris explains.
“There are many ways to crop [a rug pull]”You could rephrase it as a kind of rite of passage,” Chabris said. DecryptHe explained that an investor might look at losing money on a project like this: “You have to learn on your own and part of that is making decisions and losing – big investors have lost money.”
But in some scenarios, an investor may completely reject the reality of their previously held beliefs. Chabris explained that some people have even changed their minds about who they voted for in past elections, depending on the candidate’s future popularity.
He said logic tends to follow this scenario: “It’s hard to come to the conclusion that I invested in this: Oh, I must be an idiot.”
Daniel Simonsprofessor of psychology at the University of Illinois and co-author of Nobody’s Fool, said Decrypt“It’s a lot easier to say, ‘Oh yeah, I knew it would probably fail,’ right? And laughing about it is an easier way to do it.”
In our latest episode of “What is meta?Ryan S. Gladwin and Reza Jafery debate whether crypto degenerates really care about getting scammed and explore financial nihilism as the root cause of the phenomenon.
In many ways there will be red flags gestures to an investor’s face as they throw money at a scam. But they I always fall for itAccording to our psychology experts, this is due to a phenomenon called truth bias.
“Truth bias is just a sort of default tendency to believe that the information you’re presented with is true,” Chabris says. “It’s not stupidity or anything like that. It’s just part of the way the mind works to allow us to function as social organisms.”
Of course, there are many different ways to get scammed in the crypto world. Romance scams are among the most insidious in existence. They involve social engineering individuals to establish online relationships, often romantic in nature, before the victim is tricked into giving the scammer access to their fundsSometimes this involves cryptocurrencies and scammers use the victim’s lack of knowledge in this area as a means to exploit them.
“There’s another factor, which is that people often think they have more expertise than they actually do,” Simons explained. “Most people who invest in cryptocurrency, if you ask them how blockchain works, they probably can’t tell you.
This is even more relevant in the world of meme coins than anywhere else.
By quickly browsing the Pump.fun meme coin factory, users can discover tons of tokens that are not shy about advertising themselves as raffles. There is a full page of tokens claiming that they will raffle if you buy the token. But people still buy itthinking that the coin they are buying could become the next Dogecoin (DOGE) or Dogwifhat (WIF).
“[In this case] “It’s kind of a gamble, an attempt to time the market, to try to manipulate the market,” Simons said. “While they know there’s no real value in it. They’re just trying to manipulate what other people are going to do.”
This goes a long way to explaining why crypto investors laugh when they’re taken for fools: they know what game they’re playing. These victims then take to Twitter to share their loss, perhaps unaware that it’s an attempt to find some solace in others.
“There’s a lot of stigma attached to being scammed,” Simons says. “When someone, who’s a public figure, comes forward and says yes, I fell for it, it helps [other people] to have something in common, something shared with someone who was willing to admit it.
Edited by Stacy Elliott.