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Mark my words: no new t... wait, this isn't that thing. It's the other thing that crypto people care about... is "X" project a scam?
For some reason, call it psychological, there is no greater marketing incentive for people to put unbelievably irrational amounts of money into a project, than "experts" calling it a scam. I can't explain it because my instinct says to research and walk in the other direction where my money might be safe.
Over the past 2 years, really 3, I don't think any crypto project has received more warnings about it being a scam, than HEX.
I have enjoyed the controversy through many long work days, and if for no other logic than I love the integrity of someone willing to devote so many hours, to explain the same principles time and time again. Doing so for one "thought leader" after the next, knowing what they are walking into, the risk, and walking away knowing full well, they are still going to be labeled as "a scam", fascinates me. One could even say that his willingness to associate with other 'scammers' like Trevon James causes one to be suspect of his involvement with the dark underworld. The person of whom I speak is, of course, Richard Heart, creator of Hex, millionaire at 23, serial entrepreneur (doing this from memory lol).
If you consider yourself a real cryptonian, and you have not sat through interviews with Peter McCormack, especially where he illegally invited himself onto live stream with Richard, challenges from Tone, from Mr. Cointelligence, lawyers, talking heads... you only think you know what crypto is all about.
Is Richard Heart a scammer? If that is your primary concern, I promise, you will never understand crypto. Sure, it is an important point to get to the center of, but we may not know for years. We may never truly know. The real point of interest should be to uncover his motivations, to challenge them according to what he has spent, and spends his time doing, and ultimately how the law rules over time, where the fine line of the Howey Test actually lands.
There are very few times where something can really surprise me. The level of someone's stupidity, the capability of new traders to sell the dip at a loss and re-buy the top in a panic for one. Why anyone tries escargot for the first time other than as a dare, or how easy it is to accidentally make a baby at no cost, yet how incredibly difficult and expensive it is to adopt one if you desperately want kids but can't give birth. These are things that can probably cause my jaw to drop due to dumbfoundedness. Yeah, makin' up words as I go along so what? Shakespeare, therefore...
Some of these interviews, so-called challenges to Richard's efforts, fall into that category, of how so many great opportunities could be squandered, and so many great questions could not even be attempted.
Someone can correct me, because I really, truly am doing this from memory, but out of all the cries of "scam scam!" I've not heard a single person listen to what Hex is, actually challenge Richard in a true back and forth discussion on the legs of the Howey Test, and address the specific points that he makes. Richard often actually attempts to feed his opposition valid points to help them make more accurate statements. It absolutely boggles the mind.
Now, I want to say, there are numerous things with which I disagree with Richard Heart; many. I would easily, enjoy a long format debate on any of those topics, from the longevity movement to the existence of a creator, to some of the world's more valid conspiracies. But, none of these would be more valuable to humanity than to first allow him to either truly successfully argue his position against another thinking human being, or fail miserably at articulating why he is not a scammer. This is not an article on the topic of why he is, or is not. This is however, an examination into the "why", of why so many people fail to have an intelligent conversation with someone who endlessly goes for hours, making points that are solid.
What can you complain about with Mr. Heart? You can complain about his language. I think it is a self-imposed limitation he places on his own success, but it doesn't seem to harm him at all. Sadly, the only time I remember him being asked to tone it down was with the absolute worst interviewer I've ever witnessed, Cointelligence. True lulz onslaught. Well, okay Chris Farley interviewing Paul McCartney was worse, but that was intentional!
You could complain that he loves himself far too much. It isn't uncommon for Heart to clue us in, often, how much he loves his brain, how great a humanitarian he is, how it is his plan is to literally free the world in finance and life-extension. From self proclamation, he is a noble humanist with the purist of motives.
You could say that Richard calls people names and is incredibly rude how he does so. While I do not encourage the behavior, I admit to the occasioned self-chuckle and think to myself that in the world of cancel culture, it is at the very least refreshing that someone is allowed to use some of the insulting terms without getting banned or worse. We live in a time that has gone too far in the extreme of disallowing free speech if it is on the wrong end of the social or political aisle. It's total crap. So, I do not like anyone belittling others, I just don't. But, I admit that doesn't always mean it isn't entertaining. Lord, forgive me. And, forgive Richard Heart.
So, why am I actually writing this? Well, why not? I'm going to spend much of my day pounding these things out while watching the charts. I remain quite active, work long days, trade, do accounting, check Crypto Twitter far too often, and I resist the impulse to waste time, and prefer to write on most occasions when the ideas come. In this case, I am drawn to the controversy over Hex, and its creator. When you follow something this long, have this much respect at least for someone's consistency and lasting power, you can't help but wonder where this is headed.
Hex is a brilliant design. If it is a legitimate project, it is the first truly of its kind, and should be taught in courses. If it is a scam, then every single aspect of its design was so cleverly laid out as to make someone wonder, what shame in the waste of intricacy only to screw people out of their Ether. I personally see ALL of the signs that concern people, and if it did happen to end up being a scam, here's the thing, they would never have argued the proper points as to why, or how. That is simply stunning! Amazing! Improbably impossible! But, it's true.
Hex has been accused of being a multi-level marketing scam, using scam techniques in the pitch and marketing, the structure of the words on the website, a Ponzi scheme, exit scam, outright theft, and probably Richard's greatest concern, a security that fails the Howey.
Maybe it is some aspect of one or all of these. In fact, Richard seems to block the argument right out of the shoot by going straight for it every time. By his own admission, his marketing strategy is deliberately designed to resemble a scam. It targets people intentionally, who would likely be placing their entire life savings into a scam, because people do not listen, and they do not learn. This causes others in the crypto space to think its time for the red light to go up; something's not right here, Richard is a scammer beware! Again, maybe they're right. But, I have to say, most scammers clam up extremely quick when accused. I don't know if you have noticed, but from Madoff to Enron, most scammers can talk through just about anything, partly due to socio-pathology and partly because it is believed once well rehearsed, they believe their own lies, but when actually confronted with being dishonest, they tend to crawl into the exact same corners of defense.
Most scammers start to evade certain eye contact in the exact same manner, or, over-stare with the belief they are evading social signals. They will grip their hands or fidget in a manner different from any other conversation stance. Scammers will find a way to avoid their accusers and use any verbage other than a direct reply to their accusers, because it is much more difficult to construct a logical truth against something they know they have done wrong. It is really hard for even bad humans, to not be human.
In this case, Richard does actually have a tell, and I am not going to raise that in case I actually discuss this with him some day. What I find interesting, in his favor, is that 'tell', where sometimes it arises when challenged on the topic of scams, it usually only occurs when he is aggravated by someone's total ignorance, or he is being extremely patient with something outright rude a person has said.
So, what is it about Hex that draws people in, so certain Heart's got everyone fooled? Just a very small overview. Hex is said to be the internet's first cryptocurrency time deposit via smart contract, that encourages a person to hold Hex as an asset for the longest time, to allow it to earn maximum interest AND value. The economics, or tokenomics, and coded structure of Hex is designed to do massive percentage increases, and it intentionally punishes people's earning power for canceling a contract early or trying to game the value early. Most of the complaints about Hex deal specifically with Richard's unwillingness to disclose whether he owns the Ethereum address where people's coins are coded and exchanged for a future return of their newly minted, locked Hex, if I have that correct.
My line of questioning, knowing how many people have now asked if he owns the address where everyone's Ether is captured, would instead center around what exactly a person would be expected to do with the funds. From their angle, Richard can scam by simply taking everyone's ETH and running for Mexi.. Hexico faster than you can say 'adios'. But truly, one has to wonder why he would intentionally spend years, and tens of thousands of dollars, to create the seemingly perfect scam, only to entrap himself in such a manner that, unless I am missing something, he cannot ever extract value from if he did so at the wrong, inopportune time in the market. Even with some of the ETH moving from the origin address, it seems illogical to set yourself up for something you would be required to discuss in a legal tangle, if the validity of your project centers around whether it matters if you are the person who can access the ETH handed over. I don't believe anyone can deny that Heart cares about his project and his reputation, and has skilled himself to pay close attention to whether he is making promises or setting himself up to be a legal securities target. Too much time, in fact, to justify what I believe is a weak argument, that the entire goal of Hex is to get ETH as a more valuable asset.
You don't see scammers running for the enemy's camp begging for them to throw grenades of legal accusations when your goal is to get away with a scam. It seems more likely you do so when you like what you've done and want to get away with it, for the actual purpose you spent your own money to achieve.
Some day, I will entertain myself with a post like this that talks about the Howey, its history and how it has changed over the years. I'll break some elements down for the questions people SHOULD have asked Richard when they had the chance. I may use it as a standard comparison to DeFi, locking, staking, real world CD penalties, how to extract value from Hex, and you name it. No matter which topic, I feel like there is always going to be another, legit coin project, that would fail under the exact same conditions of scrutiny if someone saw the same warning signs. Does Ether pass the Howey? Should it? Is Bitcoin centralized? If it were ever challenged legally, how could they go after the creator if all of the legal effort has been going in to increase the case that Craig Wright is, in fact, not.
Perhaps history will, some day, prove him to be a fraud. Something tells me that even if the law somehow drifted in that direction, most likely over the movement of the ETH address tokens, Heart would still contend to dying breath, that Hex was nothing short of a miracle in code and design. I don't really see the message changing. Therefore, the real treat is that we have a creator as interesting, in my opinion, as Satoshi to Bitcoin, who is reachable and accountable to their project, and the rules surrounding Hex are certainly, some day, going to be called into question for permanent legal challenges that follow. Richard himself, could at some point, become a small piece of Howey history, over whether one principle or another, is open to new forms of precedent.
If Hex were a Ponzi, again which perhaps it is, why would someone program the next 10 years of their lives to self-require remaining potentially accountable to the most disliked government agencies for scammers? Richard Heart appears to be a lot of things, but desperate to design something to grab people's money? It doesn't seem to match his motivations, and I think that is the thing that eggs me on more than anything. While everyone has wasted hundreds of interview hours that could be the most interesting conversations in crypto, asking "how?", perhaps they should have had the insight, instead, to ask the question "why?".
And on that note, for now, crypto Gordon Freeman... out.
