The fact that a large pension fund is invested in this, presumably because of a personal connection, is pretty disgusting.
The biggest crypto lending company is a ponzi scheme
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Re: The biggest crypto lending company is a ponzi scheme
#62It's a money laundering engine long before it is a Ponzi scheme.
Re: The biggest crypto lending company is a ponzi scheme
#63what about blockfi, with similar interest rates but audited by state of new york regularly?
Re: The biggest crypto lending company is a ponzi scheme
#64Personally, I still feel that cryptocurrency in general is a net negative for the human race.
Net negative for most, net positive for a few, good learning experience for all.
> good learning experience for all
I wonder how productive that is. People fall for the same things all the time, i’m not sure a learning experience is getting us anything positive generally.
Re: The biggest crypto lending company is a ponzi scheme
#65We keep expecting crypto to die but then again, we still have antivirus software that is spyware (avast), a scammy vpn industry, and a thriving anti vax movement. No matter how absurd it is, it might stick around for a long time now
I look at it like the lottery or casinos. I'm not a gambler exceptthe occasionalpoker game with friends, and I abhor casinos, but they make billions(?) Of dollars. Everyone has got Crypto figured out! They've read all the reports, and keep up with the graphs and this time! This time! The funny thing is, I clicked on a few articles about NFT's and the metaverse because I was interested in the programming behind it and…
I sometimes liken cryptocurrency coins and tokens to casino chips. They have no intrinsic value, but they do serve a purpose for some people, and drive a multi-billion industry. There are even some people who collect casino chips (exonumismatists). This analogy also suggests that they might not ever completely go away.
Re: The biggest crypto lending company is a ponzi scheme
#66We keep expecting crypto to die but then again, we still have antivirus software that is spyware (avast), a scammy vpn industry, and a thriving anti vax movement. No matter how absurd it is, it might stick around for a long time now
I'm not a huge fan of the the current cryptocurrency scene, but I think it will remain very useful as a medium of exchange and store of value in unstable parts of the globe for years to come.
Except every time there's any instability in the actual crypto we see an immediate attempt by everyone try to flee to sovereign currencies, typically USD. And if you're relying on it for a medium of exchange you'll be dead from scurvy in a month or two.
Re: The biggest crypto lending company is a ponzi scheme
#67I think a few posts here are conflating crypto currencies, NFTs and crypto lending in stablecoin for "too good to be true" interest.
The article focuses on the last point, which rings absolutely true to me. Offering huge yields (> 8%) while removing the crypto volatility (dealing in stablecoin, effectively making all transactions and amounts look, to an external user, as if made with regular bank in dollars) cannot exist for a long time.
Either something fishy is going on, or there is a large risk that people using this schema are not aware of (e.g., "stablecoin yields if bitcoin stays in this band, otherwise you lose some money"), or both. My 2c.
Re: The biggest crypto lending company is a ponzi scheme
#68Earlier quoted context omitted.
Also in a legal sense. The Celsius user agreement explicitly states that you are giving your coins to Celsius: you have no legal claim to them, you’re relying on the goodwill of Celsius to return them… meaning if Celsius goes under, your collateral is gone.
So you're selling your coins for half the USD value, but you have to return the USD at some point anyway? Why wouldn't you just sell your coins at full value instead of using this "loan"?
to not realize capital gains. same reason why jeff bezos doesn't sell his amazon stocks and instead takes out loans on them.
Re: The biggest crypto lending company is a ponzi scheme
#69Lending money (with interest obviously) is a ponzi scheme. It's not surprising to be honest, and this shouldn't be news. We've known this for literally thousands of years now. It has nothing to do with crypto currencies per se.
Re: The biggest crypto lending company is a ponzi scheme
#70Earlier quoted context omitted.
Also in a legal sense. The Celsius user agreement explicitly states that you are giving your coins to Celsius: you have no legal claim to them, you’re relying on the goodwill of Celsius to return them… meaning if Celsius goes under, your collateral is gone.
So you're selling your coins for half the USD value, but you have to return the USD at some point anyway? Why wouldn't you just sell your coins at full value instead of using this "loan"?
Several reasons:
- People hope that the value of the underlying coins will rise in the meantime. (It may, of course, also fall but crypto enthusiasts usually don't worry too much about that)
- Quite often the volume available is not that high for many coins, so if it hovers around (say) USD 100 per coin but you want to sell 10 million coins, you would not be able to get 100*10 million is 1 billion USD for them. The market simply can't absorb that much, but if you use the coins as collateral you won't "sell" them and thus won't impact the market price.
- Selling things of value can have tax implications in certain jurisdictions, which you can avoid by lending against those things instead.