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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

#331

Post by delabay »

Daishiman wrote: post #309
delabay wrote: post #284

Earlier quoted context omitted.

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 t…

But you're not being a skeptic here, you're just gambling. Skepticism considers the ways in which you assumptions could have plausible positive or negative outcomes. I see the entirety of the DeFi "industry" being regulated to death considering how many of these protocols and DAOs behave exactly like securities or replicate existing legal structures; I see no reason that governments will not seek to regulate them the…

Regulation will come - folks on both sides are clamoring for it. Crypto industry folks are begging the SEC to do its job, but US Gov departments need to wrap up their infighting and territory division first.

Stephen Diehl is the most eloquent skeptic I've found (stephendiehl.com/blog.html). Much of the complaints point to unregistered securities fleecing retail (absolutely happening) or just overall complaints that humans are irrational (man yells at clouds). In light of his arguments, I still side on the perspective that this is genuinely new technology capable of giving the entire globe digital property rights. It's going to be a rocky road.

Re: The biggest crypto lending company is a ponzi scheme

#332

Post by roywiggins »

kangnkodos wrote: post #322
max48 wrote: post #278

Earlier quoted context omitted.

The problem is also that people are using the word "ponzi" to describe every investment they think is bad and/or don't understand. offering high rates doesn't automatically means it's a ponzi. With the definition that some of you are using here, literally every single bank, currency, edge fund and all publicly traded companies would be a ponzi.

I think it's a good rule of thumb to assume that anyone who guarantees returns greater than the historical return of the S&P 500 is a ponzi scheme. I don't know of a single reputable bank, hedge fund or publicly traded company that does that. A huge number of places do have high returns from time to time. But any reputable firm points out that past returns do not guarantee future results. No reputable firm guarantees…

Celsius does say "While Celsius strives to maintain stable reward rates over time, any change in circumstances may bring about changes to such rates, and in some events the rates may drop to 0%" deep in their Risk Disclosure.

https://celsius.network/static/risk-disclosure.pdf

Which is a bit odd- there's no chance you might lose money? How are they making money without risking that the return might drop below 0?

Re: The biggest crypto lending company is a ponzi scheme

#333

Post by throwaway405769 »

monopoledance wrote: post #317
delabay wrote: post #284

Earlier quoted context omitted.

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 t…

> You also can't deny that there are ideas which threaten state control, monetary policy, nationalistic ideals, religion its self. Phew. Yeah, we all felt that. In 2010. Now while we're reminiscing the past, I know another one! Lets provocatively ask: Isn't the colossal energy wasting worth freedom and all? - So exciting, wasn't it? And don't get me started on Wikileaks donations! Reality has moved on, and nothing sc…

Is this sarcasm, or are you actually saying that freedom is not worth the spent energy?

Bitcoin is now used by El Salvador to avoid borrowing money from IMF. Is that also a ponzi scheme?

Re: The biggest crypto lending company is a ponzi scheme

#334

Post by notahacker »

hackingforfun wrote: post #319
notahacker wrote: post #312

Earlier quoted context omitted.

Crypto doesn't claim to be a telecoms network, it claims to be an asset. If you double the number of people owning stocks, or bond or oil, it doesn't make the stock, bond or oil four times as valuable as before. It simply updates the market value of stock, bond or oil to whatever the new users paid for it - which might even be less than before (whilst the use value of collecting the dividends or coupon payments or bu…

Aren't social media networks like Facebook/Meta and Twitter valued higher as an increasing number of users join the network? Or new startups trying to get more users? Do you consider those ponzi schemes? Also, I'm just wondering, do you like tech stocks? And do you think high P/E ratios would be possible if new investors weren't buying those stocks? Also, if there's not enough Bitcoin ever going to be created for eve…

> Anyway aren't social media networks like Facebook/Meta and Twitter valued higher as an increasing number of users join the network? Or new startups trying to get more users? Do you consider those ponzi schemes?

Facebook/Meta and Twitter getting more MAUs means that they sell more ads. Zuck would still be rich if nobody was willing or able to buy FB at all.

But if their only product was FB and TWTR stock, the only thing that stock did was allow you to hold, give or sell it, and the only argument for buying it was an entirely recursive argument that it was a store of value because people will value more in future because more of them will want to buy it because its a store of value and an appeal to Metcalfe's law for the valuation because stock markets are a bit like telecoms networks then yes, they would definitely be Ponzi schemes.

Question makes more sense flipped on his head: if you think everything that looks a little bit like a telecoms network in terms of having lots of participants obeys Metcalfe's law, then why aren't actual Ponzi schemes actually extremely valuable to participate in?

Re: The biggest crypto lending company is a ponzi scheme

#335

Post by delabay »

jcranmer wrote: post #307
delabay wrote: post #284

Earlier quoted context omitted.

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 t…

The basic issue with cryptocurrency is that very little of it is actually new. You talk about ideas which threaten monetary policy--except those 'ideas' were actually the typical monetary policy not a hundred years ago. So it's worth asking yourself why monetary policy was changed from your favored position before trying to convince everybody else that it should be changed back. You know, a decade ago, I actually tho…

Ah, I see you fall into the no-coiner camp which dismissed this 10 years ago and uses bitterness as fuel.

Re: The biggest crypto lending company is a ponzi scheme

#337

Post by throwaway405769 »

rglullis wrote: post #321
monopoledance wrote: post #317

Earlier quoted context omitted.

> You also can't deny that there are ideas which threaten state control, monetary policy, nationalistic ideals, religion its self. Phew. Yeah, we all felt that. In 2010. Now while we're reminiscing the past, I know another one! Lets provocatively ask: Isn't the colossal energy wasting worth freedom and all? - So exciting, wasn't it? And don't get me started on Wikileaks donations! Reality has moved on, and nothing sc…

Crypto is not just Bitcoin, and crypto is not just Proof-Of-Work. Other blockchains who can be just as decentralized and censorship-resistant exist. (In the spirit of DRY, I think it is time we collectively write all an adversarial collaboration about crypto on some wiki page. Then I can at least just respond with a link to the rebuttal of the same tired and lazy arguments that crypto-skeptics make)

This is wrong, all PoS cryptocurrencies are extremely centralized. Try running a validator on Avalanche, see how it goes.

Re: The biggest crypto lending company is a ponzi scheme

#338

Post by monopoledance »

rglullis wrote: post #321
monopoledance wrote: post #317

Earlier quoted context omitted.

> You also can't deny that there are ideas which threaten state control, monetary policy, nationalistic ideals, religion its self. Phew. Yeah, we all felt that. In 2010. Now while we're reminiscing the past, I know another one! Lets provocatively ask: Isn't the colossal energy wasting worth freedom and all? - So exciting, wasn't it? And don't get me started on Wikileaks donations! Reality has moved on, and nothing sc…

Crypto is not just Bitcoin, and crypto is not just Proof-Of-Work. Other blockchains who can be just as decentralized and censorship-resistant exist. (In the spirit of DRY, I think it is time we collectively write all an adversarial collaboration about crypto on some wiki page. Then I can at least just respond with a link to the rebuttal of the same tired and lazy arguments that crypto-skeptics make)

> Crypto is not just Bitcoin, and crypto is not just Proof-Of-Work.

Sure. Theoretically. Are you suggesting "crypto" isn't almost entirely proof-of-work - de facto? You think those invested care for proof-of-stake? Lol.

> same tired and lazy arguments that crypto-skeptics make

HyDrOpOweR!1! (Deprecated in 2021)

But hey, I am all for the wiki. Actually, I wonder why that hasn't happened yet...

Anyway, I don't want to make the impression all innovation in crypto fanfiction in the last decade has been lost on me! For example, I do recognize, that Bitcoin isn't promoted as currency anymore - because it utterly sucks for transactions. It's "like Gold!" now, or something. Very progressive.

Re: The biggest crypto lending company is a ponzi scheme

#339

Post by ___q »

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…

> Explain how pump and dumping penny stocks doesn't apply?

That's just market manipulation. Going on Twitter and saying "BTC to the moon!" isn't a Ponzi. It requires an actor (like Charles Ponzi) to take new investors' money and pay it to old. Bitconnect was Ponzi scheme, not in some abstract sense.

> You get in early, you win, you get in late, you lose.

So vague it applies to everything that pays interest...

Re: The biggest crypto lending company is a ponzi scheme

#340

Post by hackingforfun »

notahacker wrote: post #334
hackingforfun wrote: post #319

Earlier quoted context omitted.

Aren't social media networks like Facebook/Meta and Twitter valued higher as an increasing number of users join the network? Or new startups trying to get more users? Do you consider those ponzi schemes? Also, I'm just wondering, do you like tech stocks? And do you think high P/E ratios would be possible if new investors weren't buying those stocks? Also, if there's not enough Bitcoin ever going to be created for eve…

> Anyway aren't social media networks like Facebook/Meta and Twitter valued higher as an increasing number of users join the network? Or new startups trying to get more users? Do you consider those ponzi schemes? Facebook/Meta and Twitter getting more MAUs means that they sell more ads. Zuck would still be rich if nobody was willing or able to buy FB at all. But if their only product was FB and TWTR stock, the only t…

> Question makes more sense flipped on his head: if you think everything that looks a little bit like a telecoms network in terms of having lots of participants obeys Metcalfe's law, then why aren't actual Ponzi schemes actually extremely valuable to participate in?

Yeah, good point there. I think the thing with a Ponzi scheme, the way I see it, is that I can't transfer a share of that Ponzi scheme across the world, 24/7. I could only hold it, and if it is a Ponzi scheme, it would eventually collapse. I do see value in the monetary transfer aspect to crypto as well, so that's part of it, and I personally don't think crypto will collapse, at least not Bitcoin, Ethereum, and probably several of the other major ones. The rest, I have no idea, and maybe some of those other altcoins could be considered Ponzi schemes. Definitely some of the altcoins are pump and dump schemes, if not Ponzis, and definitely some altcoins will collapse. I just don't think applying Ponzi scheme to the entire crypto ecosystem is fair.

Also, sorry, I edited the comment you responded to, so it changed a bit. I do wonder what you think about the ceiling I mentioned, in regards to that there's only 21 million Bitcoin ever going to be created, and that's not enough for everyone in the world to have even one full Bitcoin. If interest grows, and population continues to grow, then how would a ceiling ever be hit? I don't see that as a Ponzi scheme, I see that as interest in a scarce asset, that you can't make more of, while we are in an inflationary period, with governments printing money all around the world. Just wondering if you have any thoughts on that.

The way I'm thinking about it is that some people may want to hold Bitcoin forever, and just loan it out, to put it to use, while also having a deflationary asset in their portfolio.

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