My friends, crypto is the world's greatest scam. There's nothing I've seen people get ripped off in more in the last few years than cryptocurrency, and the devil's in the details. I'm going to tell you what exactly is a scam, where people are getting ripped off in crypto, which details are really important that you should know, and why Internet Computer Protocol is the only cryptocurrency I see that's honestly innovating, that's made technology that could really change our lives.
This video was inspired by a video James Jani did called Crypto, the World's Greatest Scam. A year ago, I was pretty annoyed by that video. I'm like, yeah, it makes some good points about things in crypto that are not honestly presented, people getting ripped off, but I thought it went too far. What's happened since then is I've talked with a whole bunch of people. People schedule one-on-one video calls with me, and I've had one every single day this week. What I've noticed is that most of you have gotten absolutely destroyed on crypto, and you've gotten ripped off in every way a person could imagine.
You've sent your crypto to a wallet and not known how to add the tokens and thought you'd lost them. You lost your seed phrase. You lost your ledger. But the main place people are getting ripped off is in this one single detail. The number one thing that you all do not understand about crypto is how it's built. Once you understand this, everything else in crypto looks like a gigantic lie and a scam.
How Bitcoin and blockchains are actually built
In order to do this, we need to first talk about how Bitcoin is constructed and how blockchains are generally made. If you don't understand this, you will have a hard time understanding why anything has real value in crypto, and why most of it doesn't.
Bitcoin is basically a group of computers running a protocol that connects the different nodes together. Those nodes have the Bitcoin blockchain and all the transactions that have happened on it since Genesis. The nodes process the transactions people submit to the blockchain and then send those transactions out to everybody else. With Bitcoin mining, you have huge amounts of computing, and whoever solves a fairly arbitrary problem gets to take and submit all the new transactions.
Now, that's the basic way the whole network functions, and if you got anything out of that, it's that there are very small amounts of data the Bitcoin network is actually processing. For the most part — I know there are ordinals — there's only a few kilobytes of information actually getting put on the blockchain in each new block, for all the transactions all over the world. When you take a picture on your phone, just one single picture is generally going to use up way more data than the entire Bitcoin blockchain puts into each new block.
At this point some of you are like, why is this important? Because this one single detail will change your whole understanding of crypto. Bitcoin was made in 2009, when there tended to be a lot less data, and it was made to be minimalist. You have a transaction, and you have the Bitcoin token, and really the blockchain just needs to keep track of which addresses have which amounts of Bitcoin, and who sent which Bitcoin to which address. In the simplest sense, that's a relatively tiny amount of data you need to keep track of. With ordinals there's all this other arbitrary data, which to me is basically worthless.
Then we get into Ethereum. They used the same basic idea as Bitcoin, except they also allowed you to program things like tokens. Instead of just having the Ethereum token, you could create a token with a smart contract on the Ethereum blockchain, which would tell you how many of the tokens were in each wallet. Again, same as Bitcoin: a relatively small amount of data is actually on the blockchain. Everything else in crypto, besides Internet Computer Protocol, copied that same basic design philosophy. The blockchain itself has almost no data on it. All it really has is "this wallet has this amount of coin in it, this wallet sent that coin."
The title without the car: what you actually own
When you start having all these NFTs and things like that — if you have an NFT that's just some tiny amount of data, like a couple of cat emojis, then you can put that on chain. But most of crypto, all these pictures that are NFTs, those aren't on the blockchain. Someone as smart as Elon Musk can immediately see that that's fundamentally worthless.
Almost all the NFTs being transacted everywhere — except on Internet Computer — are being transacted like this: there's a little transaction on the chain, and then there's a hash pointing to some off-chain host that tells it where the picture is. That means there's a centralized developer, often a centralized hosting provider, that controls the actual asset that in theory is being sold.
Imagine if you came to me and I sold you a car, and then I said, "Well, here's the title," and you're like, "Where's the car?" And I say, "Well, the car's at a different address, and this title is telling you where that address is." But what happens when you go to that address and the car's not there? And I'm like, "Well, sorry, all the title does is tell you where the car's located. All I've sold you is something that tells you where the car is located. I didn't sell you the real car."
That's all of crypto. All these coins, all these crypto games, all these applications — they're not actually on the blockchain. All they're doing is having these tiny interactions with the blockchain, and everything else is hosted elsewhere, even if they say IPFS is always decentralized. Amazon Web Services has documentation on how to put an IPFS node on Amazon. Where do you think these IPFS nodes end up? They're on cheap centralized cloud hosting servers. How do you think all these network nodes are run? Outside of Bitcoin, many of the nodes are spun up on centralized servers. How do you think these blockchains get upgraded? A developer has an admin key and is going in there and forking or changing things on the blockchain.
Almost all of crypto is a blatant, in-your-face lie. In my opinion almost all of it is fundamentally worthless, and it's a scam in the sense that it's not being honestly presented to you. This is the same point I make when I say 99% of crypto is theft — not because the math is fake, but because what you're being sold and what you actually own are two completely different things.
Even Bitcoin isn't what it's hyped to be
And yes, even Bitcoin. Some of you say Bitcoin shouldn't be lumped in here. What makes Bitcoin valuable is the idea that it's a currency we can actually use. But even today, the way people are hyping Bitcoin up, it's not something we could actually use for what we want to use it for. To me the idea that Bitcoin is going to get mass adopted is ridiculous. The transaction fees are too high, the transactions are too slow, and the utility is almost zero. What are you going to do with Bitcoin? Almost anything you could actually do with Bitcoin requires some other third party. Almost all of crypto, all it's really good for is making a transaction, and there's nothing you can really do with it.
I played a crypto game and "owned" nothing
Take crypto games. I've played a specific crypto game, which I'll not name because I don't want to promote it or call anyone out in particular. They all function about the same way. The one I played is on an Ethereum layer two, so the layer two is adding an entire other level of risk. You're having to pay Ethereum gas fees just to get over to layer two, and then I'm trading NFTs and the game's coin on the layer two. But the NFTs aren't actually hosted on the layer two.
The game says it's real ownership for players. Blatant, in-your-face lie. They control the text of the NFTs. They control how the NFTs work. They arbitrarily kill the price on stuff to release new cards. They change the text on it. As a player, when I bought an NFT, I don't even have the actual image. All I've done is bought a link. And if I'm using Ethereum, I'm not even really transacting it on the Ethereum blockchain — it's sitting in some centralized account where I deposited it, and it gets withdrawn if somebody else takes it off there.
This is why so many people have lost so much money in crypto: because you don't understand the details of how it works. When you're buying, do you think it's valuable to buy something that just tells you where a car is, but you can't take the car off that lot? Crypto is almost completely a lie.
Most of the biggest voices are ignorant or compromised
Almost everybody involved either doesn't dig into the details, or worse. Most creators — people like me — do not dig into the details of how it works well enough to really understand it. And most of the biggest voices in crypto are either ignorant of the details of how everything actually works, or they're compromised. They've been paid to talk about certain coins and to not talk about things like Internet Computer Protocol.
Because what if you found out that almost all of crypto has been dishonestly presented to you by, in many cases, paid liars? And then you found there's one technology, Internet Computer Protocol, that is actually game-changing technology for the whole planet. Why? Because Internet Computer Protocol is the first cryptocurrency built from the ground up to be a world computer — to be a real vision of Web3.
Web1, Web2, Web3 — and the lie in the details
Web3 has been dishonestly presented to everybody involved, all over the place. So what is Web3? Web1 is basically where you'd just go to a website and all you could do is read. Web2 is read and write: you go to a website and you can create content, but you have no real ownership. All the content you create gives value to someone else who owns the platform. Think YouTube and Twitch — when I'm building followers and subscribers and minutes watched, I get no ownership over the platform. And YouTube and Twitch are the most fair revenue cut, at around 50%. Platforms like Facebook and Instagram, you upload all this content, they give you nothing and they keep everything.
So Web3 has been sold as the fix — and the best way to lie is to tell part of the truth and deceive people on the details. The real vision for Web3 is tokenized ownership, where you create platforms based on a cryptocurrency, where you have a token that gives you some real ownership. The problem goes back to: if everything's not actually built on chain, none of that is real.
For example, if the website is off chain and you're going to buy Bitcoin ordinals, you're going through a centralized website. You're not actually going through the Bitcoin blockchain to access the ordinals — you're going through a centralized website that one person controls. They decide how to pull the ordinals and interact with them. They could even manipulate and change things and do anything they want. That's not real decentralization.
Decentralization theater
That is decentralization theater, as Dominic Williams, founder of Internet Computer, says. All of crypto right now is decentralization theater. The world is being scammed and sold this idea that "yeah, we're investing in the future, we're making the metaverse, and you're a real owner of it." This is the same thing I mean when I call decentralization the biggest lie in crypto.
Let's put it this way: if these crypto tokens were stocks. If you were sold a stock that gave you no real ownership in a company, would you buy that stock? That's what all crypto tokens outside of Internet Computer Protocol are. If you're buying a token and you don't know that that token has no real control over the actual assets, you've bought something fundamentally worthless. You've bought a leap of faith. You've bought a token that says, "I hope the developers of this project are completely honest, really care about me, are doing everything they can to add value to the token, and are not extracting massive value out from between me and the token." In how many cases do you think that's a reality? Nearly zero. Nearly zero.
Some people are so impatient they launch a token and immediately rug pull the whole thing. Others will try to build value for the token for years, and as soon as they calculate the token's not going to do well in the future, they say everything they can publicly to keep it valuable while quietly dumping everything in the background. That's why, in my opinion, 99-plus percent of crypto tokens are headed toward zero and will not even get you as good of a return as holding Bitcoin.
The real scam is wasting your time
There are no crypto games right now where you actually have full ownership over the game while holding the token, where the game's totally on chain, and where the game has mass adoption potential. Which is why everyone selling these crypto games is putting you in a position to lose money.
And it gets worse. Just transacting with all these crypto wallets is difficult and confusing. Because of the chaos, your logical strategy breaks down. You're looking at all these people, and YouTube is putting all these clickbait videos out to you about 100X tokens. If you actually research all these people who said these tokens were going to 100X, they're nearly universally wrong. And if you look at the data they show you to prove the good calls they made in the past — yes, in some cases, if you'd bought at exactly the right time and sold at exactly the right time, you'd have made money. But many times they're looking at the historical low versus the historical high. Almost no one enters at the historical low. Almost no one exits at the historical high.
What's worse, you aren't even considering the time you waste. I look at the videos you all watch on my YouTube. I don't watch them, but I can see nearly all of them are a total waste of your time. Technical analysis and price charts on a day-to-day basis — in my experience the cryptocurrency exchanges are blatantly manipulating the prices. It's no coincidence that certain pieces of news and certain price action often go heavily together. The news tries to get you all pumped up, crypto exchanges try to get everybody into long positions, and then news intentionally comes out and the exchanges go short the tokens. The way I see it, you are getting ripped off at every single point you interact with the crypto ecosystem. There are massive amounts of creators scamming you out of your money, and the main way they're scamming you is they're wasting your time, giving you irrelevant, unimportant information.
I've given you the only thing you really need to understand in cryptocurrency: how crypto blockchains are actually built. This is exactly why I want you close to the source instead of the noise — the people in my Jerry Banfield Family get this kind of plain explanation directly from me, not another clickbait price chart.
Why no other chain is real Web3
Outside of Internet Computer, you can't host a website on any other crypto. You can't build NFTs and games on chain and put videos on chain. There is nothing besides Internet Computer Protocol that's real Web3. That's one reason everybody's not talking about Internet Computer: because almost all these other coins and layer ones will get annihilated by Internet Computer's success.
I've made this analogy many times because it's effective. Internet Computer is the hot sister in crypto, and all these other chains are bros. Once you find Internet Computer, it's like I have no interest in all these bros anymore. I might reminisce about the past and think about them, but that's it. I had a friend with three hot sisters, and he didn't tell me about them for years. He hid them from me for years, until I had a hot girlfriend — then he tells me about all his sisters, and I'm like, this is one of my best friends? That's crypto right now. And that's why it's an absolute scam. This whole argument is why I've said before that Bitcoin is a lie, crypto is fraud, and ICP is the exception.
Many of you have been trying to diversify in crypto, and you think diversification is the answer. But if I go out in the backyard and I have 20 different dogs go crap all over my yard, does it matter which turd you invest in? I know that was a disgusting analogy, but it paints a very concrete picture. A turd is a turd, and diversifying in turds does not equal good returns or smart investing. To me, all these other cryptos are turds. Even the most honest ones, the ones that have been working the longest — Bitcoin and Ethereum — are not prepared for mass adoption. They need something like Internet Computer just to continue being relevant in the future. And if a bunch of Bitcoin and Ethereum people get on Internet Computer, at some point it'll be pretty obvious that we should just cut the middleman out. Why even bother with Bitcoin and Ethereum when I can just build on Internet Computer and use ICP?
The real goal: draining your time and energy
So almost everything you know in crypto has been a scam and a lie. Why? The goal has been to rip you off, to waste your time, to drain your energy. You're like, well, why are people doing this to me? The goal of the people on the other end is to absorb your energy and your money, to get rich, to be able to trick you into doing whatever they want, and to keep you powerless. Then you have to do what you're told and just serve others.
I'm here because I know you're an equal, and I want you to be powerful, because I trust you to use your power wisely. If I weren't me, but I were you, I'd want to be getting this information and not getting all the crap. So yes, there is truth in crypto. Internet Computer to me is the truth. We need a better system for building the internet, and it looks like at the highest levels everything is trending toward Internet Computer — but everybody can't find out about it until the time is right. I'm just here early to let you know.
So I'm surprised that since I first saw that "Crypto is the World's Greatest Scam" video, I now actually agree wholeheartedly with it. The only thing the author missed is covering the one piece of real technology — the largest research and development team in blockchain, behind Internet Computer, which is DFINITY — the one most promising part of crypto that makes it all worth it.
The dot-com lesson: a few real winners
If you've researched your investing history, during things like the dot-com bubble there were all kinds of absolute crap tech companies and websites and junk startup ideas that ripped all kinds of people off. And there were a very small number of very good ideas: an all-in-one shopping store like Amazon, a search engine that actually gave you what you wanted as fast, like Google, a personal computer you could do anything on, like Windows and Apple, and then an iPhone that could do all the stuff your computer could do. There are a very small number of ideas that come out of these periods of innovation. If you're not focused on that very small number of winners, and you don't dig into the details of the difference between all the losers and the winners, you are asking to get wiped out.
So I want to build a world full of wealthy people. I hope this has helped you build wealth and learn what you really need to know in crypto: how all these different things are actually built, and where the real technological advancement is. If you've lost a bunch of money in crypto — which most of you reading this have — and even some of you who have profited, in my view all you've done is get lucky and/or participate in ripping other people off. I hope we can build a future together based on real technology that gives us a chance to build applications we actually have some ownership over.
Some people in the world are scared of Internet Computer's technology. But the more we bring it out and focus on it, it doesn't matter how they feel. What matters is what kind of future you want to make.
Come see the technology in action
If you've enjoyed this, come look at the technology in action. My website is hosted on Internet Computer Protocol. My primary community is in OpenChat, which is also hosted on Internet Computer Protocol. On my crypto YouTube channel I have a ton of videos about ICP, and you can research it more — along with niche tutorials — across my ICP Crypto playlist. There are a few other people I think are real in crypto as well — creators like Cityscape, Bobby O, and Blockchain Pill do fantastic videos, so I encourage you to check their channels out too.
If you want to ask more questions, you can book a one-on-one call with me, and the door is always open to join the Jerry Banfield Family. I'm a full-time YouTuber and Twitch streamer, I make rap and house music, I play video games, and I do all kinds of spiritual transformation videos. I'm the realest person I know of, and I'd rather hand you the truth than the crap. Thank you for reading.