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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

#231

Post by spottybanana »

therealmarv wrote: post #156

A lot of fundamentals to fully understand any problems are not covered here. It can be the article is right or wrong but it's nevertheless inflammatory. Just to prove my point: Look at the P2P micro credit market (which works in the similar direction and out of the scope of fed regulated money market) where it is no big problem to get 12% APY on established P2P institutions.

Those P2P loans get also lost quite often. If you have transaction logs that show you making consistent 12% for years that would be quite interesting to many.

Due to the nature of p2p lending sites the sites often have incentive to make it look good for the investor, as for them any activity on the platform brings fees in.

I think it is pretty logical that if some place makes consistent 12% to have that lowered along the years as investors will find the good places quite quickly and start competing for the price.

Re: The biggest crypto lending company is a ponzi scheme

#232

Post by twox2 »

ebiester wrote: post #38
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.

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…

With regards to the museum backstop... I think it's coming. The big auction houses are there already and it's a blurred boundary.

Re: The biggest crypto lending company is a ponzi scheme

#234

Post by ajross »

_xnmw wrote: post #202

For those who believe "crypto is too big to fail", or the genie is out of the bottle, or that crypto concepts have become so engrained and popular that it's not possible to stop, I'd like to point out that Bernie Madoff's Ponzi scam lasted for 30+ years. People built entire lives on his very professional-seeming "business". Scams can go on for a very long time, and very large numbers of people can build their whole l…

Crypto is a mix, though. Yes, there's lots of feedback-growth/tulip-bubble nonsense. There's also a very large amount of very real money flight being enabled. The PRC clampdown was fundamentally aimed at that trick: wealthy folks in China with a ton of RMB don't trust the government not to steal their fortune (c.f. Jack Ma). But you can't turn those yuan into anything liquid outside the country without tipping them off that you're running, then you'll end up just like Jack anyway.

But... if you can build a datacenter in China with RMB, and pay chinese workers with RMB, and buy equipment and electricity with RMB, and get *bitcoin* out, then you've evaded the trap and liquified[1] your Chinese holdings.

It's not at all clear to me how much this hole has been closed, honestly. But it's possible this is still going on at a level high enough to explain crypto's continued expansion.

That said: duh, it's a bubble and it's coming down at some point. But there's real economics happening too.

[1] Or laundered, depending on how you swing.

Re: The biggest crypto lending company is a ponzi scheme

#235

Post by serverholic »

mgamache wrote: post #119

I don't really get all the "crypto is a Ponzi scheme" responses. This is about one company probably being shady with their books and claims. It's like saying Bernie Madoff built a Ponzi so USD is a Ponzi. Maybe crypto is a Ponzi, but this article is no evidence at all besides a hot market that provides the chum for sharks. It's very reminiscent of the housing bubble and the insane claims and over leverage (which is w…

I don't get it either. I think these people need to reach out beyond hacker news because they're being fed a narrative and are eating it up.

Re: The biggest crypto lending company is a ponzi scheme

#236

Post by gonehome »

BoorishBears wrote: post #208
gonehome wrote: post #76

Earlier quoted context omitted.

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…

> There are always people dismissing any new thing - the value of that signal is near zero Crypto is too old to play this card. Could you have gotten rich off investing in Enron? Sure, it made some people fantastically rich. That doesn't mean Enron was a sound company. Nothing with the word "currency" can experience 5 digit deflation and call itself anything but a failure in that regard. Nothing cynical about that ta…

> “ That doesn't mean Enron was a sound company.”

You’re right of course, my point was not that cynicism is always false, but that people are cynically dismissive about everything so it holds zero signal.

It’s basically the Sagan quip, “They laughed at Columbus, they laughed at Fulton, they laughed at the Wright brothers. But they also laughed at Bozo the Clown.”

BTC is more like some sort of asset class than a currency imo [0], but there are others that are more suited to currency.

[0]: https://www.matthuang.com/bitcoin_for_the_open_minded_skepti...

Re: The biggest crypto lending company is a ponzi scheme

#237

Post by ericd »

twox2 wrote: post #225
_xnmw wrote: post #202

For those who believe "crypto is too big to fail", or the genie is out of the bottle, or that crypto concepts have become so engrained and popular that it's not possible to stop, I'd like to point out that Bernie Madoff's Ponzi scam lasted for 30+ years. People built entire lives on his very professional-seeming "business". Scams can go on for a very long time, and very large numbers of people can build their whole l…

Sure, let's talk shit about a new system that's largely censorship resistant (or trying to be) and call it the biggest scam in history (without any evidence) while praising the world's most authoritarian government. Hard to take you seriously.

They forgot to mention the widespread vested interest by the large number of speculators to deny/downplay the issues in every discussion ;-)

Re: The biggest crypto lending company is a ponzi scheme

#238

Post by AnIdiotOnTheNet »

rodiger wrote: post #107
marcan_42 wrote: post #89

Earlier quoted context omitted.

It's absurd because if you have a car, someone else doesn't have a car, and the car has intrinsic usefulness. Having the car in your name isn't valuable in and of itself; it's valuable because it allows you to claim the car as your own, and the car is useful and can only be moved, not copied. Having a JPEG as your own isn't valuable, because JPEGs can be infinitely copied at zero cost. The title for the artwork doesn…

It's more about the token than the JPEG. Gated experiences, communities, in-game items, in-game art, etc is the driving force. And for digitally-native art, there's never been a better way to sell/trade it while preserving provenance. People are betting on the fact that we'll spend more and more of our time in digital spaces, and I don't think that's necessarily a bad bet.

> Gated experiences, communities, in-game items, in-game art, etc is the driving force.

It is incredibly sad that anyone is working towards a future where a post-scarcity space is fully subdued by artificial scarcity.

Re: The biggest crypto lending company is a ponzi scheme

#239

Post by randomhodler84 »

LunaSea wrote: post #32
remram wrote: post #18

Earlier quoted context omitted.

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"?

Because the coins might have been obtained in an illegal way.

If they are flagged by chain analytics you ain’t getting the coin back. And you probably get a visit from the authorities. No, the centralized loan provider market is not useful for this.

Re: The biggest crypto lending company is a ponzi scheme

#240

Post by roywiggins »

adam_arthur wrote: post #222
roywiggins wrote: post #151

Earlier quoted context omitted.

If the yields are actually coming from speculation, it's not a Ponzi. Ponzis don't generate real yields, they just shuffle money from new investors to old investors. If it's actually making risky bets and winning them it's more like a hedge fund or something. Of course hedge funds don't have steady 10% yields, they lose money when their risky bets don't pan out.

That's essentially exactly what a Ponzi scheme is. You have an asset with 0 intrinsic value that only goes up in value due to new investors buying in. You will only ever make more money if somebody buys in after you. Unlike stocks where owning a share entitles you to profit stream of the company (intrinsic value)

If they are actually lending the money out to people who aren't investors, earning interest on it and returning that to investors, then Celcius is not a Ponzi scheme, it's probably speculating on weird, opaque and shitty assets, but it's not a Ponzi.

Like, if I set up a business "investing" in worthless penny stocks and somehow manage to generate returns, I'm not running a Ponzi. Maybe I'm pumping and dumping those penny stocks. It's still a scheme, it's just not a Ponzi- I am actually earning money for my investors! I'm defrauding other people, but I'm not defrauding my investors.

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