The biggest crypto lending company is a ponzi scheme

Ponzi's scheme was that early investors got paid with the buy-in from the later investors, out to infinity, and the early investors crowing about how much money they made generated the hype for the later investors to buy in, and overall no value was added to the world to support any of this, it was exclusively a money-funnel from lots of late people to a few early people. It makes no sense to talk about USD being a Ponzi scheme because you can't exchange your $100 USD for someone else's $2000 USD, and later they exchange it for $4000 USD from people excited to pay $4000 USD for $100 USD in the hope they can sell $100 USD for $8000 USD in future. It's clearly madness. Anyone would pay approximately $100 USD for your $100 USD, all other things being equal (no money laundering, no additional services wink wink, and not thinking about century timescales where historic value or inflation comes into it, etc).

While "wealth begets wealth" in many ways such as compound interest, simply holding $100 USD from years ago doesn't by itself give you any advantage over people in the present day. Holding BitCoin from 2012 does give you advantage over people in the present day, and that advantage comes not from any value BitCoin itself generates, but from the present day buyers seeing the increase in money the 2012 buyers got for no effort, and wanting part of it, so throwing more money at it than the 2012 buyers did. Quantitative Easing isn't a Ponzi scheme because you don't buy Quantitative Easing hoping you can sell your Quantititative Easing for more to new people interested in the hype of Quantitative Easing.

Exchanging USD for steel, fashioning it into a steel bolt, and exchanging the bolt for more USD, is not a Ponzi scheme. Buying shares in a company, the company making steel bolts and becoming more valueable, and your share of it becoming more valuable, is not a Ponzi scheme. Exchanging USD for one BitCoin, then exchanging one BitCoin for significantly more USD, where that extra USD comes from the other person, who doesn't value the BitCoin but only hopes the BitCoin will increase in value in future, makes it very much like a Ponzi scheme.

You can grow flowers in your garden, you can find someone to exchange their company shares for your flowers, that doesn't make flowers a currency. You can declare that USD is a currency with an army behind it, that doesn't make it a Ponzi scheme.

The open question is whether BitCoin can get enough buy-in from people wanting to cash out for free money to generate a secondary market of people exchanging BitCoin for goods and services, large enough that when no more people want to buy in for the free-money aspect, people still want to buy-in for the practical use cases. Since most of the practical and legal use cases are well served by USD, the faff of exchanging USD for BitCoin to buy bolts and lose consumer protections instead of exchanging the USD for bolts seems value removing, not value adding.

> Is this true? I thought there was a complex system of clearing houses, record updates, etc. a lot of which is done manually? Am I wrong?

Blockchain is a database. Records at a bank are a database. There's no reason you can't just execute a SQL transaction to deduct from one and increment the other haha. That's not the slow part.

That's why every one of the systems I mentioned supports real-time 24/7 transfers: SEPA, FPS, NPP, Interac, RTP, FedNow, ISO20022. Not a blockchain in sight. Amazing right?

> It’s possible to build a lot of stuff to handle things like KYC in a way that’s better because of crypto tech.

It does not address KYC at all. KYC is built on top at the CEX level. If you have some concrete non-speculative way you think this is true, please share.

> I guess we’ll see how it shakes out, but for better or worse I’m betting against you.

I seriously doubt you're betting against me haha.

[edit] Any the reason settlement hasnt been addressed sooner is because thanks to the magic optimization of centralization and trust, you can just borrow the capital until settlement happens. I mean think about it, equity settlement is T+2 but yet somehow HFTs exist?

Remember the golden rule of blockchain: except in the case of regulatory arbitrage, grift and crime, if you think a blockchain is a better solution to a problem than any classical solution - you either don't know enough about crypto or you don't know enough about the problem.

Except that they aren't banks, and so there's no lender of last resort to backstop them. [1] There can't be any assurance that depositors would get all of their money back in the event of a bank run if the money isn't backed by actual dollars or a lender of last resort.

https://en.wikipedia.org/wiki/Lender_of_last_resort

Very similar to the retro video game scam recently covered by Karl Jobst. (In that case, in short, the auction house and the game grading company are owned by associated people, who have seemingly organized a few sham sales for advertisement and then profited off of speculation).

Fiat can be used pretty widely, whereas casino tokens can only be used in casinos and cryptocurrency can only be used within the cryptocurrency ecosystem (noting that casinos and the cryptocurrency ecosystem both need fiat on and off ramps to function).