These stories are a lot funnier when the victims are Silicon Valley VCs and the Saudi sovereign wealth fund

We could have a long philosophical conversation about the distinction between a security based on records on a secured server and one based on records stored in a blockchain. For now though, I just wanted to point out familiar all of this sounds to anyone who has been following WeWork and Uber and all of the other unicorns. The same suspension of disbelief, power of positive (and fear of negative) thinking, next-big-thingism, fear of missing out.

The main difference is that the people who fell for WeWork and Theranos were supposed to know better.

From the BBC:

But there was something wrong. In early October 2016 - four months after Dr Ruja's London appearance - a blockchain expert called Bjorn Bjercke was called by a recruitment agent, with a curious job offer. A cryptocurrency start-up from Bulgaria was looking for a chief technical officer. Bjercke would get an apartment and a car - and an attractive annual salary of about £250,000.

"I was thinking: 'What is my job going to be? What are the things that I'm going to have to do for this company?'" he recalls.

"And he said: 'Well, first of all, they need a blockchain. They don't have a blockchain today.'

"I said: 'What? You told me it was a cryptocurrency company.'"

The agent replied that this was correct. It was a cryptocurrency company, and it had been running for a while - but it didn't have a blockchain. "So we need you to build a blockchain," he went on.

"What's the name of the company?" asked Bjercke.

"It's OneCoin."
...

Investors often told us that what drew them in initially was the fear that they would miss out on the next big thing. They'd read, with envy, the stories of people striking gold with Bitcoin and thought OneCoin was a second chance. Many were struck by the personality and persuasiveness of the "visionary" Dr Ruja. Investors might not have understood the technology, but they could see her talking to huge audiences, or at the Economist conference. They were shown photographs of her numerous degrees, and copies of Forbes magazine with her portrait on the front cover.

The degrees are genuine. The Forbes cover isn't: it was actually an inside cover - a paid-for advertisement - from Forbes Bulgaria, but once the real cover was ripped off, it looked impressive.


[Also an ex-McKinsey consultant. That may be my favorite detail. -- MP]

But it seems it's not just the promise of riches that keeps people believing. After Jen McAdam invested into OneCoin she was constantly told she was part of the OneCoin "family". She was entered into a Whatsapp group, with its own "leader" who disseminated information from the headquarters in Sofia. And McAdam's leader prepared her carefully for conversations with OneCoin sceptics. "You're told not to believe anything from the 'outside world'," she recalls. "That's what they call it. 'Haters' - Bitcoiners are 'haters'. Even Google - 'Don't listen to Google!'" Any criticism or awkward questions were actively discouraged. "If you have any negativity you should not be in this group," she was told.