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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

#421

Post by arcticbull »

gonehome wrote: post #420
arcticbull wrote: post #418

Earlier quoted context omitted.

> Stored wealth, memorized seed words and regenerated on the other side. Of course its possible for one or two people to benefit but net net the Ukranians either (a) traded amongst themselves in which case the net welfare stayed the exact same or (b) they traded with people abroad in which case they could have chosen literally any asset on earth, many of which outperformed Bitcoin and other cryptos. > There was also…

It’s pointless to continue - you asked for “just one thing” then come up with reasons why the use case I gave doesn’t count. It wasn’t about trading, it was about being able to store value without needing trust in a central authority. It’s hard to get dollars in Venezuela which is why this guy was relying on BTC. I never claimed BTC was superior to the dollar. The iPhone is a product, Bitcoin (really blockchain and p…

You gave me a bad example haha. One Venezuela persons poor substitute for the USD they wish they could have is hardly a killer app. If you could come up with a good one you’d be wealthier than bezos.

Re: The biggest crypto lending company is a ponzi scheme

#422

Post by selestify »

AnIdiotOnTheNet wrote: post #413
selestify wrote: post #408

Earlier quoted context omitted.

> That's a distinction without a difference. That's where you're mistaken. An NFT is distinct from the work that the NFT is tied to, which might not necessarily be digital. You can copy a Picasso, but no matter how good your copy is, you can't copy the "original" quality of a Picasso. That's all an NFT is, representing the "originaL" quality of something. The worth (or lack thereof) of copies is completely irrelevant…

> An NFT is distinct from the work that the NFT is tied to, which might not necessarily be digital. Yep. Which raises the question: what exactly does the NFT provide? Is the work it points to in any way lesser through its absence? If no, then why does the NFT exist? > You can copy a Picasso, but no matter how good your copy is, you can't copy the "original" quality of a Picasso. There's a long philosophical argument…

> if you have two identical paintings, and lack external information as to their origin, can not either one (or both) be said to be the 'true' painting? If so, then what value is there in the information that 'proves' one is the 'original'?

This is the crux of it, really. Why do art buyers care so much about what the “original” is? If the reproduction is so good that you need an external expert to tell you which is the original and which is the reproduction, then that basically means it’s not the aesthetic qualities that you’re paying millions for, but the “original” quality that you’re paying for.

This original quality, as I’ve noted, allows you to signal your wealth/cultural tastes and whatnot. Now, I agree with you in that I hardly find any value myself in that, but it’s apparently worth millions to other people who are not us.

In short, I only claim that NFTs are as ridiculous/non-ridiculous as the traditional art market. If you think the traditional art markets are also bunk, fair enough. What I take issue with is thinking that NFTs are a uniquely stupid phenomenon but expensive traditional art is a respectable one.

Re: The biggest crypto lending company is a ponzi scheme

#423

Post by adam_arthur »

TimJRobinson wrote: post #393
adam_arthur wrote: post #128

Earlier quoted context omitted.

Can you explain some of the ways then? Not the user facing side, but the backend/underlying part that generates the returns necessary to sustain those yields.

Most of the high yields come day traders paying trading fees. For example on sushiswap on Polygon there are pools of ETH/USDC that people trade back and forth with trying to play the market. Every time they do a trade they pay a 0.3% fee. If you provide liquidity to these pools there is so much trading going on that the returns are currently 20% - 30% per year. You can earn even more if you provide liquidity for risk…

But the fees are taken from people speculating in crypto to make money.

Even though these are "fees" or "loans", the purpose is strictly speculation. It's not driven by intrinsic value, but people attempting to make money via speculation.

If I take a loan for a house, I can live in it. That's intrinsic value.

So the system only works to the extent that people are willing to pay for tokens without intrinsic value. Does not seem sustainable to me

Re: The biggest crypto lending company is a ponzi scheme

#424

Post by adam_arthur »

SilasX wrote: post #352
adam_arthur wrote: post #128

Earlier quoted context omitted.

Can you explain some of the ways then? Not the user facing side, but the backend/underlying part that generates the returns necessary to sustain those yields.

I think I can answer your questions. Background/Disclaimer: I'm long crypto and have significant assets in Gemini's Earn program, a regulated variant of crypto lending that pays 8% on their stablecoin, GUSD. I found Celsius and Yearn to be too sketchy/inscrutable to bother with[1], so I'm not going to defend anything about them, only the narrower claim that (some) DeFi liquidity pools are a non-Ponzi, sane way to ear…

Even though these are "fees" or "loans", the purpose is speculation. The whole web of connections in the flow of the money is rooted by people speculating to make money.

These aren't loans that are made to acquire some intrinsic value, like buying a house, investing into growing a business and so on. People use this liquidity or take crypto loans to try to make more money elsewhere in crypto.

Is that right? Is there a tie to the real world in there?

To me, this appears quite unsustainable and prone to failure if a risk off event comes. How would crypto have performed during the GFC? It's fallen 80% before even in times where economy has been perfectly fine. The whole ecosystem is ripe to implode due to 0 intrinsic value to owning the tokens that would otherwise cushion a fall in value.

Even in a severe recession, cashflowing businesses have value, rental properties have value. Crypto has none that I can tell.

Re: The biggest crypto lending company is a ponzi scheme

#425

Post by not2b »

delabay wrote: post #396
not2b wrote: post #392

Earlier quoted context omitted.

Someone who is not comfortable should stay far away from cryptocurrencies, because they may not survive the loss of all their money to a hack.

Someone who's not comfortable is probably facing the decimation of their native currency already, as what's happening in several "modern" countries at the moment. What would you pick? Sketchy native currency with a near guaranteed loss of 80%+ or a volatile crypto asset?

People in countries that had inflation problems had ways to cope: back in the 80s when inflation was high there were money market funds that paid interest that kept up with inflation, for example. The baby boomers got rich because they could pay back their loans with cheap money. Inflation helps debtors. On the other hand, deflation destroys economies as it gets people with money hoarding it. If you look at times in history when national currencies we're going up in value those are exactly the times when the economy was collapsing.

Re: The biggest crypto lending company is a ponzi scheme

#426

Post by SilasX »

adam_arthur wrote: post #424
SilasX wrote: post #352

Earlier quoted context omitted.

I think I can answer your questions. Background/Disclaimer: I'm long crypto and have significant assets in Gemini's Earn program, a regulated variant of crypto lending that pays 8% on their stablecoin, GUSD. I found Celsius and Yearn to be too sketchy/inscrutable to bother with[1], so I'm not going to defend anything about them, only the narrower claim that (some) DeFi liquidity pools are a non-Ponzi, sane way to ear…

Even though these are "fees" or "loans", the purpose is speculation. The whole web of connections in the flow of the money is rooted by people speculating to make money. These aren't loans that are made to acquire some intrinsic value, like buying a house, investing into growing a business and so on. People use this liquidity or take crypto loans to try to make more money elsewhere in crypto. Is that right? Is there…

Wait, what? The entire purpose of my previous comment was to clarify the role of liquidity pools, part of something in another reply that you asked about, and you are asking about wholly unrelated things I have no expertise about. Can you at least comment on whether that (IMHO honest and thorough) attempt to explain LPs addressed anything you asked about?

>Even though these are "fees" or "loans", the purpose is speculation. The whole web of connections in the flow of the money is rooted by people speculating to make money.

LPs don't have "fees", they just have regular fees, no need for scare quotes.

>These aren't loans that are made to acquire some intrinsic value, like buying a house, investing into growing a business and so on. People use this liquidity or take crypto loans to try to make more money elsewhere in crypto.

I don't have an special expertise on what the crypto loans on Gemini/Celsius are for, beyond what their literature says. However, everything you've said there applies just as well to (secured) margin loans that brokerages make. Do you have the same objections to those?

Re: The biggest crypto lending company is a ponzi scheme

#427

Post by SZJX »

ajross wrote: post #234
_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 o…

First, there were already various capital transfer methods for the Chinese rich before crypto exploded (also, Jack Ma wasn’t really targeted to give up his wealth or whatsoever. Legally speaking any Chinese person can only transfer up to 50K USD abroad per year, and that’s the reason for the search after capital flight mechanisms, but that’s a separate point). Second, this could not be a particular reason why the crypto market would suddenly balloon 10 times in less than a year (why would Bitcoin’s value go up if it’s only bought/mined and sold constantly in exchange for fiat anyways, in the first place?). So yeah, capital flight has always been a use case of crypto, but it far from explains the market exuberance we’re seeing right now.

Re: The biggest crypto lending company is a ponzi scheme

#428

Post by TimJRobinson »

adam_arthur wrote: post #423
TimJRobinson wrote: post #393

Earlier quoted context omitted.

Most of the high yields come day traders paying trading fees. For example on sushiswap on Polygon there are pools of ETH/USDC that people trade back and forth with trying to play the market. Every time they do a trade they pay a 0.3% fee. If you provide liquidity to these pools there is so much trading going on that the returns are currently 20% - 30% per year. You can earn even more if you provide liquidity for risk…

But the fees are taken from people speculating in crypto to make money. Even though these are "fees" or "loans", the purpose is strictly speculation. It's not driven by intrinsic value, but people attempting to make money via speculation. If I take a loan for a house, I can live in it. That's intrinsic value. So the system only works to the extent that people are willing to pay for tokens without intrinsic value. Doe…

I don't particularly care why they're trying to trade the markets, or if they're providing intrinsic value, but I'm happy to invest money and collect 20-30% dividends from them.

If everyone suddenly decides they don't want to trade any more, then I'll find somewhere else to invest my money.

Re: The biggest crypto lending company is a ponzi scheme

#429

Post by NicoJuicy »

TimJRobinson wrote: post #395
_xnmw wrote: post #349

Earlier quoted context omitted.

> Crypto is an open protocol for financial services/transactions running on decentralised hardware. Except it's not. "Open" and "decentralized" are the false promises of crypto. The entire crypto market is dominated by centralized exchanges, criminal enterprises like Tether and Binance.

"Open" and "decentralized" are the false promises of computing. The entire market is dominated by centralized companies like Microsoft and Apple. Sound stupid? That's how your statement looks to people who understand the space. Linux and open source software started slow but every year run more of the world because they are a better way of building things Crypto and decentralized finance is doing the same for the fin…

There should be % fraud/hacked in there, if you really want to compare "a better way of building things" with actual KPI's
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