Buyers were not allowed to resell the coin. Now it is practically worthless.
Last week, several media outlets reported on a separate cryptocurrency based on the TV series Squid Game.
“Now the price is $3.34 each. At midnight yesterday it was $0.14. The market capitalization is now around $264 million – 2.2 billion kroner.” Finansavisen wrote on Oct. 29.
As the newspaper warned:
“If you want to join the rally, you may want to be careful. Crypto exchange CoinMarketCap has one. Warning They received several messages that users are not allowed to sell cryptocurrency on Pancakeswap – a popular decentralized crypto exchange.”
A few days later, it may have turned out to be too wise to be skeptical of the cryptocurrency, which has lost almost all of its value, according to what CNN calls a fraud. The perpetrators are said to have made off with as much as $2.1 million.
This happens when a digital token promoter attracts buyers, stops trading activity and flees with the money collected from sales, writes the BBC, which writes that this is all crypto experts refer to as “pulling the rug.”
Norwegian crypto expert Eric Dale explains it all to Nettavisen as follows:
Most cryptocurrencies are centralized and those behind them can allocate coins for themselves, just like a central bank. Then they use the media and people’s ignorance to promote the project to have theoretical value, before they get rid of the stake they gave themselves and it disappears with the gain. This is called “rug pulls,” he says.
According to Dale, there is a big difference between the cryptocurrency being talked about here and Bitcoin:
Bitcoin is the most decentralized network in the world with a completely fixed amount of money that no one can change or stop. So this type of scam illustrates the importance of distinguishing between bitcoin and cryptocurrency. Many risk being cheated, he tells Netavizen.
The squid cryptocurrency was according to BBC It is being promoted as a currency to be used in an online game based on the Netflix series, which was supposed to come out in November. The site’s reports, which were full of typos, are gone CNN. Netflix previously stated that it has nothing to do with the currency.
As of today, only Bitcoin and possibly two other projects have proven to be serious, resilient, and have some uses. So be very skeptical when someone wants to sell you the “next bitcoin,” warns Dell.
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He doesn’t think this weakens most people’s confidence in cryptocurrencies, but he points the finger elsewhere:
I’m more concerned about media confidence, says Dale, noting that the coin was raised in the media last week.
If they had called one bitcoin first, they would have avoided this explosion, he says.
Dale has some clear tips for those who aren’t sure if cryptocurrency is a scam or not:
– Know your limits. Don’t think you’ll be smarter than the market, says Dell, who runs Kongerik.et.
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