PSA: This deal is dead and buried deep in the ground. It’s currently $10 you can earn. Which is still better than nothing, but definitely not as good as it once was. Your choice if you want to do it still or not.

Just got an excellent email from a reader:
I saw your post about bitcoins when a friend of mine liked it on Facebook. Did you go to PNHS and maybe were you on the math team or scholastic bowl with me? Anyways my concerns come from something silly but red-flag-raising like when you say, “most people who read this won’t take action on the offer.” The reason I probably wouldn’t take you up on the offer is because a sentence like that reads to me like “Only 10% of people who read this will repost but the rest will keep scrolling!” or something similarly scammy-sounding.

But I’m really interested in Bitcoin and willing to believe it has a future. The radio show This American Life has a broadcast called The Invention of Money (episode 423) that takes a fascinating look into the power of imaginary money. Also, if you manage to convince me, how much time is left to jump on this offer?

My response, which almost certainly does not help my case as I get more than a little carried away on tangents. Figured I’d still post it here for the hell of it to recoup the some of the costs of the time I spent drafting this 2000 word monolith:

 

Thanks so much for sending this question/concern in. You’re the first person to actually do so, so I really appreciate it.

Yeah – I can definitely see how the sentence comes off that way. I only put it there because it’s true: with or without the sentence, the vast majority of people don’t take action on the offer, even when it’s logically 100% sound*. My hope is that by bringing explicit attention to this fact and calling it out, I invite the reader to critically examine the reasons behind their action or inaction.

I’m also legitimately curious why people don’t take up the offer, though I assume most of it has to do with pure inertia/unwillingness to try new things. I’m frankly shocked at the level of people who actually have taken up the offer – while still only like 10%, that’s way more than I expected.

*Okay, at least 90% sound, since I suppose there are a few factors of consideration in the way of trust:

1. Trusting that Coinbase is a legitimate company and won’t steal all your money, and will pay out the referral bonus.

This is a pretty easy trust to make though as Coinbase is the largest bitcoin exchange/wallet service in the world and has raised $100 million from extremely reputable venture capital firms and is based in the US, so basically no chance they’ll take your money and run off with it. https://www.crunchbase.com/organization/coinbase

And as per this FAQ, Coinbase lays out the referral program pretty clear: https://support.coinbase.com/customer/portal/articles/683805

2. Trusting that I’ll actually pay out half of the referral I get and not just run off with all the money. This admittedly requires a little more leap of faith, as I’m not a several hundred million dollar company and I don’t have the same level of public accountability as Coinbase.

However, it does serve my general interest in a long-term way to establish my reputation of being extremely transparent, equitable, and honest about all the opportunities I publicize, as that’s basically the only reason anyone takes me up on this or any other offer: because they trust that I’ll follow through on it. So if there’s any suspicion or public accusation that I won’t, that basically immediately deteriorates the possibility of me being able to offer something like this in the future. And as I’m almost 100% certain something like this will come up again sooner or later, it’s well within my general interest to pay out to anyone who signs up for this offer.

Plus – those people who do successfully sign up for this offer and get their free $35+ from me will probably trust me 100X more than they did before, and be way more willing to come in with me on future opportunities, so there’s a direct 1:1 incentive for me to ensure I do indeed pay out to anyone who comes in on this.

On top of all of that, the downside loss if I do renege on the deal and run away with all the money is exactly $1 (Coinbase’s 1% transaction fee on $100), so not exactly the most risky proposition in the world.

All of that doesn’t actually go to address the reason you’re hesitant about this deal, but was just auxiliary clarification material. Sorry you had to read all that.
To address specifically that sentence sounding scammy: Yeah – that is a pretty good heuristic to use to be honest. That said, scams use that kind of language clearly because it works, and there’s no reason that someone who is not a scammer, but actually offering a legitimately awesome opportunity, cannot use the same kind of language to compel action with generally good intentions.

So while these ‘trigger’ phrases definitely should incite caution and the need to tread carefully, they don’t in of themselves indict something of being a scam. The only true way to determine if something is a scam or not would be to actually examine the details of the offer.

If a Nigerian prince were to offer you through an unsolicited email $100 million as a long lost relative if you would only forward him $5000 now in a wire transfer, and he uses the phrasing, “most of my long lost relatives won’t take action on this offer”, you would be most assuredly correct in not sending him $5000. There is little credence to the offer itself, little ability to verify the authenticity of the Nigerian prince and related parties, the justification for the offer existing is tenuous, and the risk of personal loss and the opportunity for being personally defrauded is great, and there is definitely a clear motive for a scam: direct profit of $5000.

If Ben Yu offers you the opportunity to make $35 by taking advantage of a publicly available offer posted by a reputable and highly public company, and he uses the phrasing, “most people who read this won’t take action on the offer”, you would be correct in reading carefully and thoroughly understanding the entire nuances of the offer and doing background investigation, at which point you would learn that

a) Coinbase is a legitimately the world’s largest bitcoin exchange and wallet service
b) that they legitimately are publicly making this offer
c) that Ben Yu is indeed a legitimate and real person
d) that the profit motive, were this offer not to actually be real, would be very small for Ben, as the $100 you spend isn’t going to Ben, but rather to Coinbase, and therefore he would make nothing if the referral bonus offer not to be real
e) if the offer were to be real, the only point of risk is in trusting that Ben will actually split the referral bonus 50/50 with you
f) the total net risk of loss, if Ben were to renege on splitting the referral, would be $1

And consequently hopefully you would conclude that the offer is most certainly not a scam, and that the relative ‘risk’ in trusting Ben is far less than the relative upside, which is generally not the case when dealing with a scam.
So that would be my extraordinarily long-winded answer to your concern: You’re absolutely right that it’s a great heuristic (*caveat: Bayesian theory as noted below may argue otherwise) for detecting when something might possibly be a scam and letting someone know when they should pay closer attention to determine if something is indeed a scam, but it definitely doesn’t cause something to be a scam in of itself.

*From a Bayesian probability perspective, we could use Bayes’ theorem (a great primer on Bayes’ theorem if not familiar: http://www.yudkowsky.net/rational/bayes) to examine the merits of this in a broad, abstract way:

Let’s say maybe 2% of all offers are scams. Let’s say maybe 90% of all scams include the phrasing “most people who read this won’t take action on this offer”. Let’s also say maybe 10% of all offers that aren’t scams also include the phrasing “most people who read this won’t take action on this offer”.

Given those numbers, what is the probability that an offer that includes the phrasing “most people who read this won’t take action of this offer” is a scam? I’m blatantly borrowing this example from Yudkowsky’s post – but actually try to come up with a number if you want. It’s a really interesting exercise.

The answer is actually just 15.5% – meaning the vast majority, 84.5%, of offers that say “most people who read this won’t take action of this offer”, are actually not scams, though it seems like it should be the other way around, since just about every single scam you’ve ever seen includes this phrase.

Crazy, right? Let’s walk through how this happens:

Let’s say there are 10,000 offers total. Okay, so 2% of them are scams – that means 200 offers are scams.
90% of those 200 scams include the phrase “most people blah blah blah”, so that’s 180 scams that include that phrase.
Now, also 10% of all offers that aren’t scams will include this phrase, so that’s 10% of 9,800 offers (since 200 are scams), which comes out to 980 offers that include this phrase and aren’t scams.

So that leaves us with 180 scams that include this phrase and 980 offers that include the phrase and aren’t scams. So that’s 180/1160 == a 15.5% probability that any given offer with this given phrase is a scam, and a 84.5% probability that it isn’t.

The key here lies in the fact that there are just so many more offers that aren’t scams than those that are that even if just 10% of the offers that aren’t scams include that line, and 90% of scams do, that’s still overwhelmingly more offers that aren’t scams including the line, since there were just so many more offers that weren’t scams in the first place.

So perhaps this isn’t such a good heuristic after all for deciding what’s a scam and what isn’t :).

Anyway – I’m almost positive you have absolutely zero interest in hearing any of this and none of this is actually helping to convince you to do this offer, but I kind of just geeked out for a bit. Couldn’t help but take advantage of an opportunity to throw in some Bayesian reasoning. Sorry. Back on topic.

To respond to your last two points, on you being interested in Bitcoin: That’s really awesome! Also, props on listening to TAL, my sister loves that stuff. I highly, highly recommend getting at least some nominal exposure and familiarity with bitcoin. Worst case scenario, it’s a really cool learning experience and you get to explore a fascinating concept. Best case scenario, Bitcoin takes off and becomes a fundamental part of the future in a myriad of integral ways, and you get to be an early adopter with hopefully a huge payout, quite possibly financial, in return for your early faith and conviction.

But even if you weren’t remotely interested in Bitcoin at all, it still wouldn’t preclude you from taking advantage of this opportunity, since you could literally just buy the bitcoin and immediately cash out when the Bitcoin posts to your account and pocket your earnings in cold hard US dollars.

And on how much time is left for this opportunity: I have no idea, but I’m willing to bet it certainly isn’t long at all, since this is honestly an absolutely absurd, ridiculous, ludicrous, unreasonably large sum of money Coinbase is offering for people to sign up. At some point in the near future, especially now that people are starting to catch wind of it and spread the offer en masse, I expect they’ll dramatically reduce this offer.

Back in the day, by which I mean 9 months ago, the offer used to be literally $1, and it was big news when they upped it to a whopping five dollars for both the referrer and the person signing up. So yeah. Maybe we’ll enter those dark ages again.

My bet is this dies out within the end of the month with 80% certainty, with a 20-30% chance that it dies out before the end of this week.

And now, it is time for me to sleep. Goodnight everyone!