I won’t try to judge the original statement, but I do think that people believing cryonics to be a scam is a serious problem—much more serious than I would have believed. I have talked to some friends (very bright friends with computer science backgrounds, in the process of getting college degrees) about the idea, and a shockingly large number of them seemed quite certain that Alcor was a scam. I managed to dissuade maybe one of those, but in the process I think I convinced at least one more that I was a sucker.
Reasoning by perceptual recognition. Cryonics seems weird and involves money, therefore it’s perceptually recognized as a scam. The fact that it would be immensely labor-intensive to develop the suspension tech, isn’t marketed well or at all really, and would have a very poor payoff on invested labor as scams go, will have little impact on this. The lightning-fast perceptual system hath spoken.
I’m surprised that you say your friends are computer programmers. Programmers need to be capable of abstract thought.
It has struck me that if you wanted to set out to create a profitable scam, cryonics looks like quite a good idea. I don’t have any particular reason to think that actual cryonics companies are a scam but it does seem like something of a perfect crime. It’s almost like a perfect Ponzi scheme.
Currently it is set up as a bit of a Ponzi scheme; without new people coming in (and donations) these companies wouldn’t survive very long. But then, with a little tweaking you could apply that analysis to any business with customers to make it look like a Ponzi scheme.
Could you write this up in more detail somewhere? The claim is that the “patient care trust” doesn’t need new customers to be financially viable, and should keep going even if the primary business fails. If this isn’t true it would be worth drawing attention to.
For some value of “running at a loss”, i.e. where you interpret that as “would run at a loss if it weren’t for donations and bequests”.
Given the nature of their business, donations and bequests do not strike me as an anomalous source of revenue. I do plan on asking for more information on the nature of these revenues before signing up.
However, this is an issue quite separate from the viability of the patient care trust, which is set up to keep suspendees as they are even in the case of a failure of the “main business”.
Most businesses deliver a product or service to their customers much sooner after receiving their money than a cryonics company does. Those customers also tend to be alive and so in a position to complain if they are not satisfied with their purchase.
Suppose I choose CI, and pay up now for a lifetime membership. I will pay $1250 once, and in parallel build up $200K insurance policy designating CI as the beneficiary. The only part of the money CI sees now is the $1.2K. No small sum, but neither it is more than a tiny fraction of the salaries and costs CI verifiably pays.
At 40, I can reasonably expect to go 30 to 40 years before I die. At any time during this period, if it becomes apparent that CI is up to anything screwy, I can (so I understand) change my insurance policy back; or at any rate contest their claim to it.
If you want to defraud customers, there are quicker, cheaper, more reliable ways to do it.
This would require cryonics companies to lie about their finances. Otherwise they have no way to extract money from their reserves without alarming customers.
Banks have been lying about their finances for years. Cryonics companies would hardly be unusual in the current economic climate if they were lying about their finances. I have some AAA rated mortgage backed securities for sale if anyone’s interested.
To be clear, I actually don’t think cryonics companies are scams. I just think that if you wanted to set up a scam, cryonics would be a promising avenue.
I think the complexity thing is overblown for banks to be honest. If you believe the MSM you might get that impression, but credit default swaps, collaterized debt obligations, mortgage backed securities and the rest of the TLAs behind the financial crisis are not actually difficult to understand for anyone with a basic grasp of maths. The idea that such instruments are fundamentally complex largely stems from the mathematical ineptitude of most people in the media. If you have trouble understanding the concept of percentages then a credit default swap probably seems quite confusing.
It seems very unpromising indeed to me. Could you explain how you’d pull it off? Would you publish falsified accounts, for example? Bear in mind that you’re competing with existing providers and operating in a community which talks to each other; if existing providers think you’re a scammer, they will say so, and they are polite about each other.
Scam is perhaps a little strong, but it does seem like a perfect Ponzi scheme. The basic idea of a Ponzi scheme is that you can pay off your existing investors with the proceeds from new investors, as long as your existing investors are happy with your annual reports of profits.
Cryonics promises an indefinitely deferred payoff—you pay into the fund now for a chance at a huge payoff sometime after you die. As long as you can sustain a positive cash-flow you never have to pay out from the fund. People won’t get suspicious for quite a while—you can always claim you don’t want to risk damaging your charges by subjecting them to experimental revival procedures. If you don’t believe in what you’re selling you’ll be (permanently) dead before anybody gets suspicious. Meanwhile you will have enthusiastic customers evangelizing you based on their huge ‘paper profits’ - they’ve paid you a paltry $300 a year for the promise of eternal life.
If Bernie Madoff could get away with cooking the books for 20 years in one of the most heavily regulated industries in the US with the relative handicap (compared to cryonics) of actually having to pay out on occasion then it is at least plausible that a cryonics company could be a profitable enterprise for someone who did not believe in cryonics. Of course, if it is easy to verify that they are storing brains in liquid nitrogen it doesn’t necessarily matter if it’s a scam.
I’d publish legal accounts. If I get to play by the same accounting rules as a ‘too big to fail’ bank then I wouldn’t call them honest accounts.
You actually don’t need to do anything illegal or even that morally questionable to make good money from an insurance business. People pay you to hold their money. It’s why Warren Buffet loves insurance companies:
The Power of Float
The source of our insurance funds is “float,” which is money that doesn’t belong to us but that we temporarily hold. Most of our float arises because (1) premiums are paid upfront though the service we provide—insurance protection—is delivered over a period that usually covers a year and; (2) loss events that occur today do not always result in our immediately paying claims, because it sometimes takes many years for losses to be reported (asbestos losses would be an example), negotiated and settled. The $20 million of float that came with our 1967 purchase (National Indemnity- NICO) has now increased—both by way of internal growth and acquisitions—to $46.1 billion.
Float is wonderful—if it doesn’t come at a high price. Its cost is determined by underwriting results, meaning how the expenses and losses we will ultimately pay compare with the premiums we have received. When an underwriting profit is achieved—as has been the case at Berkshire in about half of the 38 years we have been in the insurance business—float is better than free. In such years, we are actually paid for holding other people’s money.
(emphasis mine)
Cryonics seems like a pretty great source of ‘float’.
Yes, I encountered this too from several of my friends. One was almost mockingly certain that I was considering giving money to a group of scamsters, though they had no specific comments on Alcor or CI’s published financial information.
(For the record for when people I know find this post—I have not actually overcome the inertia and signed up. This is largely due to the fact that my living relatives are likely to have control over the disposition of my remains, so there is little point in signing up for cryonics unless I can get up the nerve to talk to them about it.)
I won’t try to judge the original statement, but I do think that people believing cryonics to be a scam is a serious problem—much more serious than I would have believed. I have talked to some friends (very bright friends with computer science backgrounds, in the process of getting college degrees) about the idea, and a shockingly large number of them seemed quite certain that Alcor was a scam. I managed to dissuade maybe one of those, but in the process I think I convinced at least one more that I was a sucker.
Reasoning by perceptual recognition. Cryonics seems weird and involves money, therefore it’s perceptually recognized as a scam. The fact that it would be immensely labor-intensive to develop the suspension tech, isn’t marketed well or at all really, and would have a very poor payoff on invested labor as scams go, will have little impact on this. The lightning-fast perceptual system hath spoken.
I’m surprised that you say your friends are computer programmers. Programmers need to be capable of abstract thought.
It has struck me that if you wanted to set out to create a profitable scam, cryonics looks like quite a good idea. I don’t have any particular reason to think that actual cryonics companies are a scam but it does seem like something of a perfect crime. It’s almost like a perfect Ponzi scheme.
Currently it is set up as a bit of a Ponzi scheme; without new people coming in (and donations) these companies wouldn’t survive very long. But then, with a little tweaking you could apply that analysis to any business with customers to make it look like a Ponzi scheme.
Could you write this up in more detail somewhere? The claim is that the “patient care trust” doesn’t need new customers to be financially viable, and should keep going even if the primary business fails. If this isn’t true it would be worth drawing attention to.
Alcor is running at a loss
I do believe they would be capable of running within their means if they had to.
For some value of “running at a loss”, i.e. where you interpret that as “would run at a loss if it weren’t for donations and bequests”.
Given the nature of their business, donations and bequests do not strike me as an anomalous source of revenue. I do plan on asking for more information on the nature of these revenues before signing up.
However, this is an issue quite separate from the viability of the patient care trust, which is set up to keep suspendees as they are even in the case of a failure of the “main business”.
Most businesses deliver a product or service to their customers much sooner after receiving their money than a cryonics company does. Those customers also tend to be alive and so in a position to complain if they are not satisfied with their purchase.
Let’s try to make this concrete.
Suppose I choose CI, and pay up now for a lifetime membership. I will pay $1250 once, and in parallel build up $200K insurance policy designating CI as the beneficiary. The only part of the money CI sees now is the $1.2K. No small sum, but neither it is more than a tiny fraction of the salaries and costs CI verifiably pays.
At 40, I can reasonably expect to go 30 to 40 years before I die. At any time during this period, if it becomes apparent that CI is up to anything screwy, I can (so I understand) change my insurance policy back; or at any rate contest their claim to it.
If you want to defraud customers, there are quicker, cheaper, more reliable ways to do it.
There are people currently being stored are there not?
Indeed there are.
As the reasoning above suggests, they tend to be people who have known and watched the cryonics organizations for a long time, up close and personal.
This would require cryonics companies to lie about their finances. Otherwise they have no way to extract money from their reserves without alarming customers.
Banks have been lying about their finances for years. Cryonics companies would hardly be unusual in the current economic climate if they were lying about their finances. I have some AAA rated mortgage backed securities for sale if anyone’s interested.
Banks hide their deception not only in actual secrecy but also in overwhelming complexity.
To be clear, I actually don’t think cryonics companies are scams. I just think that if you wanted to set up a scam, cryonics would be a promising avenue.
I think the complexity thing is overblown for banks to be honest. If you believe the MSM you might get that impression, but credit default swaps, collaterized debt obligations, mortgage backed securities and the rest of the TLAs behind the financial crisis are not actually difficult to understand for anyone with a basic grasp of maths. The idea that such instruments are fundamentally complex largely stems from the mathematical ineptitude of most people in the media. If you have trouble understanding the concept of percentages then a credit default swap probably seems quite confusing.
It seems very unpromising indeed to me. Could you explain how you’d pull it off? Would you publish falsified accounts, for example? Bear in mind that you’re competing with existing providers and operating in a community which talks to each other; if existing providers think you’re a scammer, they will say so, and they are polite about each other.
Scam is perhaps a little strong, but it does seem like a perfect Ponzi scheme. The basic idea of a Ponzi scheme is that you can pay off your existing investors with the proceeds from new investors, as long as your existing investors are happy with your annual reports of profits.
Cryonics promises an indefinitely deferred payoff—you pay into the fund now for a chance at a huge payoff sometime after you die. As long as you can sustain a positive cash-flow you never have to pay out from the fund. People won’t get suspicious for quite a while—you can always claim you don’t want to risk damaging your charges by subjecting them to experimental revival procedures. If you don’t believe in what you’re selling you’ll be (permanently) dead before anybody gets suspicious. Meanwhile you will have enthusiastic customers evangelizing you based on their huge ‘paper profits’ - they’ve paid you a paltry $300 a year for the promise of eternal life.
If Bernie Madoff could get away with cooking the books for 20 years in one of the most heavily regulated industries in the US with the relative handicap (compared to cryonics) of actually having to pay out on occasion then it is at least plausible that a cryonics company could be a profitable enterprise for someone who did not believe in cryonics. Of course, if it is easy to verify that they are storing brains in liquid nitrogen it doesn’t necessarily matter if it’s a scam.
So you’d publish honest, or at least non-fraudulent, accounts?
I’d publish legal accounts. If I get to play by the same accounting rules as a ‘too big to fail’ bank then I wouldn’t call them honest accounts.
You actually don’t need to do anything illegal or even that morally questionable to make good money from an insurance business. People pay you to hold their money. It’s why Warren Buffet loves insurance companies:
(emphasis mine)
Cryonics seems like a pretty great source of ‘float’.
You’ve said so once. This second instance is thus an attempt at proof by repeated assertion. Actual reasoning would be preferred.
Yes, I encountered this too from several of my friends. One was almost mockingly certain that I was considering giving money to a group of scamsters, though they had no specific comments on Alcor or CI’s published financial information.
(For the record for when people I know find this post—I have not actually overcome the inertia and signed up. This is largely due to the fact that my living relatives are likely to have control over the disposition of my remains, so there is little point in signing up for cryonics unless I can get up the nerve to talk to them about it.)