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The biggest crypto lending company is a ponzi scheme

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Re: The biggest crypto lending company is a ponzi scheme

#171

Post by pcthrowaway »

ptero wrote: post #67

I 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 e…

In a sense I think the yields on stable coins are a reflection onto the user of value which would otherwise be captured by the banking industry. There are some assurances lost at the same time, and most would consider stablecoins less safe than a bank, but these are tradeoffs one makes when using stablecoins.

Re: The biggest crypto lending company is a ponzi scheme

#172

Post by time_to_smile »

gentleman11 wrote: post #10

We 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

> it might stick around for a long time now

This is the most important financial lesson of the pandemic for me.

There is something deeply wrong with many parts of our economy and financial system, any one who is an expert in any specific area will tell you that things seem weird and don't make sense.

A great example of this is ad tech. I've worked in ad tech for many years and strongly agree with Tim Hwang's Subprime Attention Crisis. Everything is a house of cards, fraud (intentional or not) is wide spread.

However one thing that Hwang (or anyone pointing out that our systems are houses of cards, scams, or otherwise unsound) fails to answer is the question "what makes it fall apart?"

I'm a huge fan of at least the film version of the Big Short, which does a great job exploring the 2008 financial crisis and how unstable our financial system can be. But it's important to recognize that a key part of everyone's discovery isn't just realizing "this is all bullshit" it's realizing precisely when and why reality will come crashing in. There's even a great scene where Michael Burry calls the major banks and realizes that they essentially won't let the market collapse until they get their piece, that they can essentially push back reality a bit until they get theirs.

So crypto may be unquestionably a ponzi scheme, but what will make that scheme fall apart? ad tech might be mostly bs, but what will make everyone stop paying into it? stock prices maybe completely out of line with reality (with inflation and cash injections who even knows) but what will force them to face reality?

We may all be living in la la land, a wild fever dream, but pointing out you're in a dream doesn't always make you wake up. The question is "what precisely will wake us up". And for all the things that seem very wrong with our current world, I have yet to hear anyone give a concise answer or even guess as to what this is. If the pandemic didn't knock over our house of cards, I'm not entirely sure what will or when it will happen. If Wile E. Coyote never looks down after running of a cliff, will he still fall?

Re: The biggest crypto lending company is a ponzi scheme

#173

Post by tata71 »

mbesto wrote: post #84
criddell wrote: post #29

Earlier quoted context omitted.

It will remain a very useful medium of exchange? Are you saying that today it is a very useful medium of exchange? Are you using it that way?

Yes: (1) Drugs and (2) certain countries where fiat is unstable.

Like El Salvador!

.....who uses the USD.

Re: The biggest crypto lending company is a ponzi scheme

#174

Post by moron4hire »

selestify wrote: post #134
moron4hire wrote: post #85

Earlier quoted context omitted.

NFTs only prove the first derivative of ownership. There is no mechanism within the blockchain that can prove that the person who minted the NFT owned the media associated with the NFT, e.g. there's nothing stopping you from minting an NFT claiming ownership of an actual Picasso. Which means that we have to fall back to the traditional system of legal contracts and physical possession to prove the ownership, at which…

All of what you mentioned was never meant to be the value-add of NFTs, which is namely that there's a trustless, verifiable record of transfer from the original creator (which yes, you have to verify is actually the person you think it is) to the current holder. When tied to physical possessions, it's one additional piece of evidence that the thing before you is likely genuine. When tied to digital entities, it's an…

So what I hear you saying is that NFT concept only works if everything becomes an NFT, immediately upon creation. Any hold-outs or delays gives room for fraudulent minting, which means you don't have a trustless system.

You can't say that NFTs are a trustless system when the origin of the NFT requires trust. You might as well assume the "+ C" term in all integrals equals zero. It's just factually incorrect.

Re: The biggest crypto lending company is a ponzi scheme

#175

Post by dustintrex »

marcinjachymiak wrote: post #77

I'm not a fan or user of Celsius, but this is an incredibly inflammatory title with very little evidence to back it up. Claims like that demand greater proof. This is an incredibly lazy article The author pretty much failed to do any research on DeFi investments (point 3 in the OP). Compound and Aave are just 2 of many places investors place their assets, and are definitely near the lower end of APYs. Badger, which C…

> Well a lot of it is coming from incentives of these protocols

I keep seeing this for DeFi.

- So you put 1 fiat into the magic box, and 2 fiat comes out. Where did the 1 fiat profit come from?

- DeFi collateralized staking algorithms hash protocol incentives!

- Yeah whatever but no really, it's a closed system so all inputs and outputs need to sum up, where did the new fiat come from?

- YoU dOnT uNdErStAnD cRYpTo!!1!!

Re: The biggest crypto lending company is a ponzi scheme

#176

Post by arcticbull »

WFHRenaissance wrote: post #19
gentleman11 wrote: post #10

We 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.

Stablecoins will turn into CBDCs and CBDCs will serve that purpose. Bitcoin is down from 68K to 48K in the last what 3 weeks? Stores of value don't flail wildly and incoherently at the whims of a few whales, and given it supports 2-3 tx/sec using the energy of an entire country, it's a crap medium of exchange too.

The future of crypto for anyone other than an anacap libertarian is CBDCs.

Re: The biggest crypto lending company is a ponzi scheme

#177

Post by Aeolun »

hackingforfun wrote: post #73
daniel-thompson wrote: post #56

Earlier quoted context omitted.

> it will remain very useful as a medium of exchange The only current usecase I'm aware of for crypto as a medium of exchange is for criminals, i.e. ransomware / extortion / etc.

I see this point rehashed on HN over and over. I'd love if there was a more productive discussion of cryptocurrencies. I don't think they are going away anytime soon. Too many technologists and others are thinking about them now. I personally think store of value is a strong use case, at least for those of us who consider them to have value. Just wondering, what would it take for you (and others who share similar vie…

> at least for those of us who consider them to have value

That’s the rub isn’t it? They have absolutely zero intrinsic value, and any energy expended to mine them and give them value is a literal waste.

> what would it take for you (and others who share similar views) to change your mind about crypto

It would help if we could go a month without another DAO breaking.

Ultimately I have enough faith in the system that I want my money to be centralized.

Re: The biggest crypto lending company is a ponzi scheme

#178

Post by [deleted] »

lostmsu wrote: post #101
vadansky wrote: post #51

Earlier quoted context omitted.

That's the takeaway from "Betting on Zero". I kept watching to see the moment when the Ponzi scheme falls apart and Bill Ackman comes out vindicated, and it never came. It really is the case that "The market can stay irrational longer then you can stay solvent". There might be an escape velocity of irrationality where a Ponzi schemes can become legitimate.

The funny thing is that you assume crypto enthusiasts are the irrational ones.

[deleted]

Re: The biggest crypto lending company is a ponzi scheme

#179

Post by [deleted] »

Tangokat wrote: post #139

Clickbait title and no proof at all. HN hates all things crypto so much this gets upvotes even though the quality is less than Buzzfeed. Rates like these are absolutely possible to get using Defi, futures and so on. One example of doing it risk free (staying delta neutral) is by selling crypto futures contracts and buying the underlying asset to hedge. With that said, lenders like Celsius, Nexo, Crypto.com etc. shoul…

[deleted]

Re: The biggest crypto lending company is a ponzi scheme

#180

Post by tata71 »

skeeter2020 wrote: post #66
WFHRenaissance wrote: post #19

Earlier quoted context omitted.

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.

You're out of date. We run to our stablecoins now — the horses are hungry!

Also: Bitrefill.com, and that's without even running a search.

You may be impressed with both the offerings, and the currencies accepted. I know I was.

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