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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

#281

Post by BoorishBears »

gonehome wrote: post #236
BoorishBears wrote: post #208

Earlier quoted context omitted.

> 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 curre…

You're missing the most important part of the quip...

But the fact that some geniuses were laughed at does not imply that all who are laughed at are geniuses

The dismissiveness is often a signal, that was his point.

BTC has grown too far to be compared to Columbus setting out anyways, it's reached widespread access and accessibility, there are public companies devoted to it's access, BTC ETFs, etc.

We've reached the point where the cynicism is backed by reality. I think the fact we're now abandoning the currency pipedream for the most well known cryptocurrency says it all.

Re: The biggest crypto lending company is a ponzi scheme

#282

Post by lostmsu »

Ensorceled wrote: post #189
lostmsu wrote: post #101

Earlier quoted context omitted.

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

They are spending $$$ for pictures of anthropomorphic monkies and pizzas that are small variants of similar pictures; that's pretty irrational.

That is no different from expensive picture collectors. That's a minority of participants.

Re: The biggest crypto lending company is a ponzi scheme

#283

Post by bglusman »

dustintrex wrote: post #175
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…

I think you may have just also described fractional reserve banking? that is literally where much of the money supply comes from.

https://en.wikipedia.org/wiki/Fractional-reserve_banking

Re: The biggest crypto lending company is a ponzi scheme

#284

Post by delabay »

_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 speaks to aspects of humanity which people hold near and dear.

Crypto no doubt harbors shady characters, ponzi schemes, scams. You also can't deny that there are ideas which threaten state control, monetary policy, nationalistic ideals, religion its self. Just look at the magnitude of the conversation.

Its easy to dismiss me as the ramblings of somebody caught up in the scam. But when has it been a good idea to completely dismiss ideas which can shake the bedrock of society? I'm sure dinosaurs never thought an asteroid would cause them to go extinct either.

I ask the skeptics to take a Bayesian approach to skepticism. If you think in absolutes you can never accept new information. Move your skept-o-meter from 100% to 99% and allow yourself a fraction of a sliver of consideration. It might just be one of the most important things you have done.

Re: The biggest crypto lending company is a ponzi scheme

#285

Post by kapp_in_life »

initialized wrote: post #113
moron4hire wrote: post #86

Earlier quoted context omitted.

And they do it without NFTs. So what does the blockchain add here?

composability, security, persistence, liquidity

>composability

Not sure what you mean by this.

>security

The opposite in fact. If a hacker takes over your second life account and transfers your property you can bug customer support to get it back. If they compromise your secret key and transfer it over the blockchain you have no recourse. Unless the true source of ownership lives somewhere off blockchain and they invalidate and reissue it to the original owner, but then what purpose does blockchain/nft serve again?

>persistence

Already handled, obviously.

>liquidity

If second life wanted to offer liquidity they could(do?) without using an NFT. And if they don't want to offer liquidity than trading the digital asset as an NFT doesn't do you any good since there's no way to transfer ownership in second life.

Re: The biggest crypto lending company is a ponzi scheme

#286

Post by makomk »

adam_arthur wrote: post #258
roywiggins wrote: post #255

Earlier quoted context omitted.

Not every financial fraud is a Ponzi scheme, and it's silly to call everything a Ponzi. It sounds like Celsius probably is one, though.

"A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors" Explain how pump and dumping penny stocks doesn't apply? I agree that it's a bit different in nature than most Ponzi Schemes due to lack of central entity orchestrating it, but the net effect is the same in the end. You get in early, you win, you get in late, you lose. Even if we call it something else, it's c…

I've seen that definition of Ponzi schemes a lot and it doesn't really explain how they work - you could say the same about, say, most of the stock market where the only way to exit your position is through funds from new investors. The defining feature of Ponzi schemes is that they pay out interest using the funds of new investors. It's important to understand this carefully because it's the reason Ponzis have to fail - the actual paper amount investors have in their acounts and can withdraw is backed by a pool of money that's slowly eaten away by the fraudulent interest payments, until one day the scheme can't meet withdrawals and the whole thing implodes. Ordinary cryptocurrencies like Bitcoin and Ethereum don't have this underlying mechanism and so it doesn't make sense to call them a Ponzi scheme. That doesn't mean that they're a good investment, but they don't work anything like a Ponzi. This lending scheme, on the other hand, has most of the usual Ponzi warning signs.

Re: The biggest crypto lending company is a ponzi scheme

#287

Post by nprz »

namdnay wrote: post #275
_xnmw wrote: post #261

Earlier quoted context omitted.

Even Bernie Madoff had highly respectable people working with him. edit: removed my comment about Schmidt not really joining, I see it announced on his Twitter.

If I understand correctly, Chainlink are selling "blockchain magic" to enterprise customers. Not exactly the same thing as the ponzi lending stuff

ChainLink is an Oracle that provides real-world data to the blockchain. They're used by smart contracts like AAVE and Compound, things a hn reader might describe as "ponzi lending stuff".

Re: The biggest crypto lending company is a ponzi scheme

#288

Post by meteorstorm »

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.

Visa?

https://www.cnbc.com/2021/08/23/visa-buys-cryptopunk-nft-for...

Re: The biggest crypto lending company is a ponzi scheme

#289

Post by giantrobot »

twox2 wrote: post #242
micromacrofoot wrote: post #212

Earlier quoted context omitted.

if the company that serves the image your NFT links to goes away you can completely lose access to it

The NFT is the token, not the metadata. Of course there are projects with on chain metadata, and projects with on chain art as well. Also, many folks use IPFS pinning, so that does add some level of resilience as well, but yes not all NFTs are created equal.

IPFS pinning is only meaningful so long as a node keeps the item pinned. IPFS is basically a CDN, it's not magic online storage forever. Once the last node pinning an NFT goes offline the NFT goes offline and the token is more worthless than before.

Re: The biggest crypto lending company is a ponzi scheme

#290

Post by floor2 »

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…

The car title is analogous to owning the copyright or trademark on an image - something that actually confers meaningful legal power over it.

The NFT is more like a car enthusiast club issuing stickers or badges to its members.

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