Cryptocurrency Was Their Way Out of South Korea’s Lowest Rungs. They’re Still Trying.

A generation of the young with dead-end social and economic prospects, calling themselves “dirt spoons,” aimed to strike it rich. They’ve ended up with big losses.

Comments: 24

  1. This article brilliantly lends credence to the age old stock investors maxim: "Sometimes the bulls win, sometimes the bears win. But pigs ALWAYS get slaughtered", i.e., greed kills. It seems greed was the major driving force here - exemplified so well by "Remy" Kim (his first name just happens to be the name of expensive cognac - just a coincidence, right?). Instead of taking the wise path and putting his bitcoin winnings into a more useful asset - like, I don't know, a house, he now has a depreciating asset (the Rolls), and pretty much is back in the same spot he was before. Forget all this talk of trying to equalize society - its just a self justifying ruse to make themselves look like innocent victims. They jumped on the bitcoin bandwagon and now its lost its wheels, and they have no one to blame but themselves. Well someone seems to be profiting - their neighbors to the North seem to have mastered ways to steal millions of $$$ in Bitcoin to finance the Kim Crime family , and other shady outfits like narco traffickers and mercenaries seem to be making out fine as well, usually by stealing and extorting Bitcoin users. Like so many other things that have popped up in the past 10-15 years, beware of talk of those who want to "make the world a better place". Facebook/Twitter said the same thing - look what happened.

  2. When some people bliindly put their hard-earned money into cryotocurrencies, they were often unconsciously hypnotized by illusory stories of making a killing in the market. Salivating in their imagination of getting rich with lavish life, they don't listen to dissenting woeful voices around them. In their eyes, prudent and analytic minds are nothing more than fools who do not know how to take advantage of a once-in-a-lifetime opportunity. They categorical belief in speculative success was enormously reinforced when they taste a small success of making quick bucks--a mirage on the computer screen that has yet to be converted into money in bank accounts. The inflated disembodied numbers were really ecstatic, making them feel on top of the world. (The irony is that despite cryptocurrency's proclaimed vision of replacing the currency managed by monetary authorities and the banking industry with intermediary-free one, only when they sell cryptocurrency to another speculator can they make money in reality. This means that their selling itself is a denial of cyptocurrency's promises.) Exciting giddiness taking them over, they upped the ante, putting more money--borrowed and saved--and splurged money even when their ships yet came in. The confirmation biase worked. They ended up searched info that corroborated their belief despite that info being largely circulated by the coin industry benefitting when more speculators jump in.

  3. @Commander Not only do I agree with you, but I wished to compliment you for writing such a long and well-reasoned comment in English. It is still obvious that English is not your native language (I suppose that that must be Korean), but nonetheless it is still a very good effort, dealing with a complicated set of issues. Thank you!

  4. You're right. My native language is Korean and I love to hone my English writing skills. Thanks for compliment and encouragement.

  5. @Commander I agree. In fact, apart from the computer screen reference, this exact same analysis could just as well apply to the late 1920s and Wall Street.

  6. The true value of "cryptocurrencies" is that they are an excellent tools for drug traffickers, corrupt government officials, and other criminals to launder their ill gotten money. Of course, Bitcoin was their favorite. Unfortunately for Bitcoin, its popularity amongst stupid, but otherwise honest, speculators made it traded much more widespread. This got the eye of government monetary and law enforcement agencies making it less popular for criminals. Without that foundation, Bitcoin will fail for sure because it would have no value whatsoever. That's the underlying reason it has lost so much value over the last year. Unless criminals use particular cryptocurrencies for money laundering, they will have no value at all.

  7. @James Osborn Except bitcoin is not good for money laundering and drug trafficking. A ledger of every transaction ever made is available for tracking. That is how the Russians that hacked the the 2016 election were caught.

  8. Kim Ki-won is keeping a secret from his parents. Not anymore!

  9. Heh, any idea how many Kim Ki-won's there are in South Korea? 22% of the population has the last name Kim.

  10. Mr. Kim will soon lose his Rolls Royce as well, because he won't be able to afford its costly upkeep. The cost of an oil change on a Rolls cost more than most of us spend for public transportation in a year. That aside, what a travesty that a whole generation of youth, not just in South Korea but other places as well, are growing up with perversely twisted values, believing the way to get ahead in life is to look for something easy that doesn't entail work or commitment. This has perhaps been fueled by growing wealth inequality, but nonetheless, I don't think many years down the road this ends well.

  11. The American greenback has always been a cryptocurrency, and the English pound, falsely called "sterling," became one when you stopped having to sign the back of a five-pound "note" fifty or sixty years ago.

  12. Actually "sterling" comes from "Easterling", a herring-exporting company that had a very high-quality product, with well-salted herring all the way down to the bottom of the barrel. Salted fish, now that's a good investment, unlike bitcoin or Brexit-addled Britain.

  13. So sad that so many people are ruining their finances with this equivalent of fantasy football. It's like people picking out their fantasy football team believing that someday they would springboard off this to own a real NFL team. There are definitely huge problems of social mobility in South Korea, but there are actually three ways to succeed. Getting a government position or a job at a Chaebol are options for people with connections, and for everyone else, the best option is emigrate. Not too hard to get a visa to the U.S., and it's not as hard to work one's way up here as it is in South Korea. Regardless, investing in the fantasy of bitcoin is accepting financial ruin. I'd hope people wouldn't fall for it, particularly now that it has collapsed, but people are always eager to buy snake oil from passing flim-flam men, or believe the lies of Trump, and so on.

  14. I find it ironic that Mr. Kim points out that Koreans are financially illiterate after he himself blew half a million dollars on a car. Not that there’s anything wrong with buying an expensive car, but perhaps investing that money in a business venture would have been the more savvy move.

  15. This article laments that crypto “isn’t backed by any country’s central bank”. But none of the currencies issued by those central banks have any tangible assets backing them either. The transition from asset-based money to debt-based money has unleashed a half-century of inflation (compare prices for staples like milk, gas and stamps from 1971 to today).

  16. For most of the things you mentioned, prices have fallen. Gas and food are far far cheaper than they were 50 years ago. The average family spends a very small percentage of money on food, a figure that was star higher in the past. What we have to worry about are skyrocketing costs for college and medical care.

  17. Anyone smart enough to figure out how cryptos actually work should have also been smart enough to realize that there is literally no limit to the number of cryptocurrencies that could be fabricated. How many math equations are possible? An infinite number. Cryptos have zero intrinsic value: it is impossible to make their functionality scarce. Even tulips are limited by the amount of arable land on earth. These guys were lucky enough to get in the game right at the beginning but as soon as the fad took off they needed to unload their junk asap. But people are addicted to the idea that they have things of value, and they are especially addicted to the idea that those things might become more valuable in the future. That's why they say that money is more addictive than cocaine. The people who came up with cryptocurrencies are geniuses. Peddling cryptos is like peddling crack.

  18. @Purity of Federal Reserve Notes also have no intrinsic value and can be created in infinite numbers. Blame Nixon for that.

  19. @Charles The difference is that one is legal tender, and the others are not.

  20. @Charles Also, the FRB can and does restrict their supply. There is no Board of Cryptocurrencies that can do the same, so they're free to run amok.

  21. "They say there are two sides to every question. But there is only one side to the stock market, and it isn't the bull side or the bear side, it is the right side." --Jesse Livermore, in "Reminiscences of a Stock Operator" (1923)

  22. “Currencies” do not trade /-10% a day vs $/Euro/jpy. And your “bank” doesn’t pay out because the founder died with the password. Good luck!

  23. Bitcoin, crypto, blockchain...all the same and a joke.

  24. “Crypto played a role in shifting wealth from one group in society to another,” he said. “It has affected Korean society tremendously.” I was very surprised to see this statement accepted at face value with no corroboration or denial from someone more conversant in the matter, or at least a statistic to back it up, since it contradicts everything in the article — and even the speaker admits he's broke.