Do Meme Coin traders care about getting scammed? Psychologists explain

It’s like a daily event that someone faces rug pulled invest in a stupid coin. More often than not, the investor laughs it off and moves on to the next step. Pompe.fun token. However, this leads you to ask yourself questions: does crypto degens Do you even care about being scammed?

Logically, people don’t invest money if they think they’re going to lose money on a coin, no matter how degenerate you are. But, once it becomes clear that the project is a scam and the rug has been pulled from under them, the investor needs a way to deal with this experience.

“When there is a conflict between your beliefs and what is happening, we often change our understanding of our beliefs.” Christophe Chabrisformer Harvard psychology professor and co-author of a book on scams, Nobody is stupidsaid Decrypt. “We can’t change what happened, but we can change how we view our beliefs.”

In turn, some victims will reframe the incident in a positive light – this might take the form of laughter. “You could call it an adaptation or a defense mechanism or a rationalization or whatever,” Chabris said.

“There are many ways to reframe (a rug print). You could reframe it as a kind of rite of passage,” Chabris said. Decrypt. He explained that an investor might describe losing money on a project as: “You have to learn on your own and part of that is making decisions and losing – big investors have lost money . »

But in some scenarios, an investor may completely reject the reality of their prior beliefs. Chabris explained that some people even changed their beliefs about who they voted for in past elections, depending on the future popularity of the candidate.

He said the reasoning tends to follow the following scenario: “It’s hard to conclude that I invested in this: oh, I must be an idiot.”

Daniel Simonsprofessor of psychology at the University of Illinois and co-author of Nobody’s Fool, said Decrypt“It’s a lot easier to say, ‘Oh yeah, I knew it would probably fail,’ right? And laughing about it is an easier way to do it. “

In our latest episode of ‘What is the meta?Ryan S. Gladwin and Reza Jafery debate whether crypto degeners really care about getting scammed and explore financial nihilism as the root cause of the phenomenon.

In many ways there will be red flags ” waved in one investor’s face as he threw money into a scam. But they I always fall for it. According to our psychology experts, this is due to a phenomenon called truth bias.

“Truth bias is simply the sort of default tendency to believe that the information presented to you is true,” Chabris explained. “It’s not stupidity or anything like that. It is simply part of the way the mind works to allow us to function as social organisms.

Of course, there are many different ways to get scammed in the crypto world. Romance scams are among the most insidious. They involve social engineering of individuals to establish online relationships – often romantic in nature – before the victim is tricked into giving to the scammer access to their funds. Sometimes this involves cryptography and the scammers use the victim’s lack of knowledge in the field to exploit them.

“There’s another factor: People often think they have more expertise than they actually do,” Simons said. “Most people who invest in crypto, if you ask them how blockchain works, they probably can’t tell you.

This is more relevant in the world of meme coins than anywhere else.

Quickly browsing the coin factory, Pump.fun presents users with tons of tokens that don’t hesitate to present themselves as carpet draws. There is a full page of tokens claiming that they will draw if you buy the token. But people still buy itthinking that the coin they are buying could become the next Dogecoin (DOGE) or Dogwifhat (WIF).

“(In this case) it’s kind of a game of chance, trying to time the market, trying to play it,” Simons said. “When they know it actually has no real value. It’s just about trying to play with what other people are going to do.

In many ways, this explains why coin investors laugh when the rug is pulled out on them: they know the risky game they are playing. These victims then take to Twitter to share their loss, perhaps without realizing that it is an attempt to find comfort in others.

“There’s a lot of stigma attached to being scammed,” Simons said. “When someone, who is a public figure, comes forward and says yes, I fell into the trap, it allows (other people) to sort of have something in common, something shared with someone who was willing to admit it.”

Edited by Stacy Elliott.