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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

#191

Post by pjc50 »

arcticbull wrote: post #176
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.

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.

CBDCs aren't really cryptocurrency though, for good and ill, they're just a database with extra steps.

Re: The biggest crypto lending company is a ponzi scheme

#192

Post by arcticbull »

gonehome wrote: post #76
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.

Yep agreed, and other underlying applications (NFTs as evidence of group membership or ownership that can be easily owned and transferred, an auditable historical record) have a lot of value. The ability to hold decentralized state is a resilient way is pretty cool and a lot of the finance applications are better than legacy stuff - try sending large amounts of money around in the legacy system, expect to wait severa…

> try sending large amounts of money around in the legacy system

Well, cryptos aren't really money so actually sending money via crypto requires transferring crypto from a bank to an exchange, making a purchase, withdrawing it to a destination wallet at an exchange, selling it, and transferring the proceeds to another account. That takes days, requires multiple transactions and costs boatloads of fees. By constraining it to transfer of an intermediate representation you're not making a good faith representation of the process.

Second, the only thing you can do better with crypto than a centralized exchange is crime, grift and regulatory arbitrage. What you're describing is the third. Sending money in any classic fintech system takes milliseconds. What takes longer sometimes is AML/KYC and security. Crypto pretends those don't exist. Like any other regulatory arbitrage you can certainly make things faster or cheaper, for instance by dumping chemical waste into lakes. Once again comparing a car to a little buggy with a 2-stroke engine and no catalytic converter on the basis of fuel efficiency is disingenuous too.

Anyways, sending "large amounts of money" isn't a problem most people have by definition. And if you actually do have large amounts of money, sending it around isn't an issue. I've had six-figure domestic wire transfers clear instantly with no questions asked from my brokerage account, free of charge, same day. The first time they called to check. I didn't mind.

Most of the world has free or nearly free instant transfers. Europe has SEPA, the UK has FPS, Canada has Interac e-transfers, Australia has NPP. The US is getting RTP and FedNow in 2023.

[edit] In fact, the cheapest way to move USDC from FTX to Coinbase is actually to request a free wire transfer from FTX to your bank account, and then either a free wire or ACH from your bank account to Coinbase. Saves $25.

Re: The biggest crypto lending company is a ponzi scheme

#193

Post by micromacrofoot »

gonehome wrote: post #87
ebiester wrote: post #38

Earlier quoted context omitted.

Art is a really weird market in general. The problem with NFT is that people are buying it as an investment rather than a work of art with its own merit of which appreciation might be one benefit. There's likely no museum backstop for most NFTs. (By which I mean that rich people buy art, sell it amongst themselves/have inflated art appraisals to raise the price, and donate to museums and claim as a tax writeoff.) See…

I think the art is the wrong thing to focus on. The more novel piece is a ticket to community membership and a way to align incentives within that community. It can take the form of art, but doesn't really have to. That said, yeah regular art markets don't really make sense wrt value either.

art serves a similar purpose and the community is "being rich"

Re: The biggest crypto lending company is a ponzi scheme

#194

Post by piaste »

usehackernews wrote: post #75
obayesshelton wrote: post #15

Crypto and NFT is one big ponzi scheme. Who on earth is spending $000,000s on a virtual ship? I sense it is a case of somebody close to the NFT or virtual world buying the asset and making out it is a great thing and then selling it on quickly. Many a scam involves somebody from the group buying something so the unwilling feel like it safe. As always, don't be left holding the baby.

Why do people on HN assume that if they don’t find something valuable, others shouldn’t either. I think of NFTs like car titles. Having the car title in your name is the only way to prove you own a car. Someone can burrow your car, and have it in their possession but that doesn’t make them the owner - the title does. When you buy a car, what you’re really buying is a little paper that says you’re the owner - without…

Owning a car vs. renting one allows me to keep it in my garage indefinitely.

If I try to keep in my garage without the ownership title, the police will come, take the car, give it to the owner, and put me in jail.

What does owning a NFT of a JPEG allow me to do that I cannot do with just a saved copy of the JPEG on my hard disk? (Selling the NFT itself doesn't count, for obvious reasons.)

Re: The biggest crypto lending company is a ponzi scheme

#195

Post by sakopov »

Another interesting thing of note is that Tether made loans worth billions to Celsius with bitcoin as collateral. [1] Now, whether that's good or bad depends on whether you think Tether itself is a ponzi but it definitely has an colorful history.

[1] https://www.bloomberg.com/news/features/2021-10-07/crypto-my...

Re: The biggest crypto lending company is a ponzi scheme

#196

Post by reginold »

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…

I would be interested in seeing other articles on this topic.

As someone new to DeFi, I found the article sparked new questions, even though as you said it wasn't deeply researched.

If Celcius is basically reinvesting into a bunch of other assets, it's possible, or even likely, that the high yield assets are too good to be true. That's where my concern would be. Is BadgerDAO rock solid? Compound? I would be curious to see expert analysis of these. Celcius is simply built on top.

Re: The biggest crypto lending company is a ponzi scheme

#197

Post by onlyrealcuzzo »

selestify wrote: post #186
onlyrealcuzzo wrote: post #169

Earlier quoted context omitted.

If you're buying a $100M painting like Guernica - you should probably be an expert...

No, because you're rich as hell and will hire an actual expert to validate the origin of the painting. Come on, you think art history experts are the ones actually buying these paintings, as opposed to rich folk with too much money?

You think just because you're rich you can't have any taste in art?

Look - MBS bought that fake Da Vinci for $450M or whatever. I don't think the majority of people buying $50M+ paintings are complete morons. Maybe they are.

Re: The biggest crypto lending company is a ponzi scheme

#198

Post by FanaHOVA »

gzer0 wrote: post #127
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…

> Where do these high APYs come from? Well a lot of it is coming from incentives of these protocols and speculation in those native assets. But the author doesn't even know that, so I won't bother steelmanning his argument Is this not the very definition of a ponzi scheme? The returns coming from "incentives" of these protocols and "speculation" in those native assets sounds very ponzi-like to me.

Yields for nascent crypto projects are basically marketing budgets and user acquisition costs passed on to the user as profits instead of going to Google Ads or being a coupon for free fries with your order. They want to incentivize people to bring liquidity to them, and pay them for it. The real question is whether or not this actually leads to retention or of it's wasted capital, but that's beyond the point of the article.

Re: The biggest crypto lending company is a ponzi scheme

#199

Post by tata71 »

pjc50 wrote: post #123
hackingforfun wrote: post #73

Earlier quoted context omitted.

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…

> store of value is a strong use case The "change my mind" criterion for this would be actual price stability. That is, a significant market for goods and services which can be bought at a fixed crypto price over a period of a year or more with zero price variation. People getting paid salary in fixed crypto denominations. People taking out 10-year mortgages in fixed crypto denominations at interest rates comparable…

> The "change my mind" criterion for this would be actual price stability.

See you in 5 years when Ethereum has flipped Bitcoin, then.

You may even have to wait until Ethereum forks again, honestly.

Re: The biggest crypto lending company is a ponzi scheme

#200

Post by bhouston »

gentleman11 wrote: post #126
marginalia_nu wrote: post #45

Earlier quoted context omitted.

Crypto sure has a vested intrerest in making it seem that way: https://www.investopedia.com/news/are-cryptos-high-trading-v...

> But there's a problem here: Some cryptocurrency exchanges have been faking their volume numbers in order to raise the visibility of their businesses and bring in more customers. That's easy to do in the less-than-transparent world of global crypto trading. > Now, an effort is underway to force the exchanges to report real numbers. I can’t believe this isn’t fraud of some sort already

It is fraud, it is called wash trading: https://en.wikipedia.org/wiki/Wash_trade
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