Market cap is a terrible measure. If i make a my on crypto coin mine 100 of them and convince one person to buy one for 1000 euro, my coins market cap is suddenly 100,000 euros.

For example: https://signalvnoise.com/posts/1941-press-release-37signals-...

It's terrible but it's all we have and the market moves by it. Ignore that at your own peril. Just a little bit more and it will rapidly close the gap due to FOMO.

Does Ethereum has any immunity from pump-and-dump and other market manipulation schemes compared to Bitcoin or your comment has nothing to do with the subject?

Of course not.

One takeaway I have from both the 2008 crash and the cryptocurrency mania is that it's actually very hard to create a financial system that is not mostly fraud and gambling.

There's a couple reasons for this. One is that people are greedy and I've even seen really honest people get weird around money. The second is that humans are extremely prone to falling for the alluring cognitive biases and fallacies behind gambling. A corollary of the second is that gambling doesn't always look like gambling and can emerge spontaneously in markets, but when it does it still runs on the same emotional and cognitive biases that make people go to casinos.

The line between fraud and gambling can get blurry too. Can you get away with it? Hmm... wanna bet? Every act of fraud is kind of a dice roll. Get away with some fraud once and the gamblers' fallacies start taking hold.

It's really really hard to organize a large scale civilization or financial system so that most activity is honest and/or productive. It's a constant Red Queen's Race against both intentional fraud and systemic failures.

This is too good for a simple comment. I would love to see these ideas expanded - do you write about this somewhere?

Agree, this is a fantastic comment.

> Does Ethereum has any immunity from pump-and-dump and other market manipulation schemes compared to Bitcoin

No.

When BTC crashes, so will ETH. Get out entirely.

what is in your opinion the reason why bitcoin is failing? For the way I see it, it's because it lacks real world applications and value. I know Ethereum has it's own contracts etc... but I don't see how it really solves the base problem. Who's going to use this currency and why? Are the contracts enough to keep it afloat forever? From what i've heard they are not without issues.

I don't think Ethereum contracts are much better compared to what we already have - make a mistake in a contract you will end up arguing with humans in a conference room anyway.

Neither solve real world problems for folks in developed countries. In developing countries maybe there's a utility play but that's been getting undercut by the crazy fees and speculation.

What mechanisms in Ethereum protect it from this sort of market manipulation?

None whatsoever.