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Is crypto just one big Ponzi scheme?

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Re: Is crypto just one big Ponzi scheme?

#51

Post by nathias »

jqpabc123 wrote: post #21

Technically not a Ponzi scheme but still a scam and/or a con. The fact that some people profit from a con doesn't negate the fundamental nature of this zero sum game. Everyone can't win. For every winner, there must be losers of an equal or greater amount. Finding more/bigger fools can be fun and profitable but it is not building or creating any sort of substantial real world *value*. The only *value* in this game is…

Ah yes, the 'substantial real world value'. Nothing better for HN upovte crowd than the self-sure idiot calling a whole industry scam, because it isn't something that he personally wants.

Re: Is crypto just one big Ponzi scheme?

#52

Post by jfk13 »

eimrine wrote: post #32
marginalia_nu wrote: post #25

Earlier quoted context omitted.

So money laundering, tax evasion, funding terrorism, child porn and gambling? Feels like all that's missing here is a cackling Skeletor.

Try different angles to see at these cases. Tax evasion is good if your government happened to be terrorist regiment (maybe not a case for citizen of first-world). Money laundering is not from my list, I don't know is it possible to convert crypto to cash enough safely. Gambling is not any bad, to be honest, and instead of child porn case you may consider something less controversial like buying a vpn if your govt re…

> most beautiful part ...

> ... any enough popular blockchain ought run forever

Really? And how do you decide which of all the thousands of blockchains to store your bits on? Just because one chain seems popular today doesn't guarantee it'll be popular next year or next century; most likely some other shinier blockchain-successor will eventually supplant it, and it'll fade away.

So to preserve your data "forever", you'll need to constantly monitor the blockchain ecosystem, and make sure you copy your data to another blockchain if the one you picked first shows signs of decline.

Or just use a few copies of normal storage media, copying them to fresh media at intervals. This is a solved problem. Blockchain offers nothing here.

Re: Is crypto just one big Ponzi scheme?

#53

Post by bko »

jqpabc123 wrote: post #42
bko wrote: post #37

Earlier quoted context omitted.

I think Bankman-Fried is a realist. He understands that a lot of token economics don't make sense. Having a non-yielding asset pay some kind of yield is the crypto equivalent of a perpetual motion machine. It can work short term but long term its impossible unless the token has some other means of creating wealth (e.g. fee for some gambling scheme) But I think what he is doing is still valuable. He's creating financi…

I think Bankman-Fried is a realist. Sure --- and a profiteer. I appreciate his candor. He obviously understands full well that the game makes no sense --- but he is perfectly willing to profit from those who don't.

I think he's providing a valuable service by creating products that exert a downward pressure on some coins. I don't see whats wrong with this. The default state allows for number to only go up until a rug pull.

Re: Is crypto just one big Ponzi scheme?

#54

Post by aww_dang »

dTal wrote: post #13
kungito wrote: post #8

Earlier quoted context omitted.

Well now you can argue that crypto also has actual industrial and other uses, they just shadow the most of the trading volume which is all about speculation and money laundering

You can argue that, fallaciously. What's a bitcoin good for? You can't make it into anything else. Cryptography is useful, yes, as an abstract framework. That's not what's under discussion. Buying bitcoin is not the same as investing in cryptography research.

>What's a bitcoin good for?

Transacting, for those who choose to. There are other means of transacting and arguably better blockchains for doing so. The point remains. We all have our preferences and subjective personal valuations. Another individual might not see that value for himself, but the value remains for other parties. Claiming it is useless is a reaching generalization.

Re: Is crypto just one big Ponzi scheme?

#55

Post by me_me_me »

mensetmanusman wrote: post #38

Not necessarily, but it has attracted the best schemers and con artists in the world in one big party over the last couple years. I’m very interested to see what happens with these nations that have adopted bitcoin as a currency, as it seems like they are destined to relearn the pain that having a deflationary currency brings.

> I’m very interested to see what happens with these nations that have adopted bitcoin as a currency

I know relatively little about economy at large scale, but crypto use as nation's currency is a disaster at many levels. Country not being able to control (and manipulate) its money is a recipe for a disaster as you cannot steer your ship. Devaluing or strengthening currency allows you to affect import/export ratios.

Deflationary nature of BTC means that future generations will be progressively more and more at disadvantage. Because wealth accumulation favors the early winners, making entry barrier harder and harder. It de-incentivizes spending - ie the thing that makes economy go.

I am not sure if those two thing could be upsided with anything that crypto provides.

Re: Is crypto just one big Ponzi scheme?

#56

Post by eimrine »

marginalia_nu wrote: post #40
eimrine wrote: post #39

Earlier quoted context omitted.

> The blockchain requires the energy consumption of a small country. This is a lie, so the question of yours just does not exist.

https://digiconomist.net/bitcoin-energy-consumption/ This site puts Bitcoin about on par with Thailand. https://digiconomist.net/ethereum-energy-consumption Ethereum is about a Khazakstan.

That data you have mentioned is not about requirements.

For example, world military spendings for 2021 is $2113 billion (just googled it, if you need a source of data). But that number is not a requirement, it is kind of a measure of world's imperfection. Crypto's energy consuming might be reduced drastically as well as the number I have mentioned.

I can tell some more of scary stories: if that military spendings will not be reduced, the meaning of "forever" word may be not as much time as you expect. In another words, the digits I have mentioned are killing us way faster then the digits you have mentioned. So I don't see any problem for using "forever" word in that case.

Re: Is crypto just one big Ponzi scheme?

#57

Post by aww_dang »

me_me_me wrote: post #55
mensetmanusman wrote: post #38

Not necessarily, but it has attracted the best schemers and con artists in the world in one big party over the last couple years. I’m very interested to see what happens with these nations that have adopted bitcoin as a currency, as it seems like they are destined to relearn the pain that having a deflationary currency brings.

> I’m very interested to see what happens with these nations that have adopted bitcoin as a currency I know relatively little about economy at large scale, but crypto use as nation's currency is a disaster at many levels. Country not being able to control (and manipulate) its money is a recipe for a disaster as you cannot steer your ship. Devaluing or strengthening currency allows you to affect import/export ratios.…

Is there no value to incentivizing saving?

This is ironic from my perspective.

If we believe that crypto is a bubble, then it is worth asking what are the forces driving this? Could it be an atmosphere of negative real interest rates, driven by artificially cheap credit? Isn't this the way central bankers have been steering the economy? Yet in your comment, you suggest that this same central planning is virtuous. It appears as a contradiction in logic from where I stand.

Re: Is crypto just one big Ponzi scheme?

#58

Post by jqpabc123 »

nathias wrote: post #51
jqpabc123 wrote: post #21

Technically not a Ponzi scheme but still a scam and/or a con. The fact that some people profit from a con doesn't negate the fundamental nature of this zero sum game. Everyone can't win. For every winner, there must be losers of an equal or greater amount. Finding more/bigger fools can be fun and profitable but it is not building or creating any sort of substantial real world *value*. The only *value* in this game is…

Ah yes, the 'substantial real world value'. Nothing better for HN upovte crowd than the self-sure idiot calling a whole industry scam, because it isn't something that he personally wants.

Nothing better for HN than name calling when you can't logically refute an argument.

Re: Is crypto just one big Ponzi scheme?

#59

Post by McLaren_Ferrari »

nathias wrote: post #51
jqpabc123 wrote: post #21

Technically not a Ponzi scheme but still a scam and/or a con. The fact that some people profit from a con doesn't negate the fundamental nature of this zero sum game. Everyone can't win. For every winner, there must be losers of an equal or greater amount. Finding more/bigger fools can be fun and profitable but it is not building or creating any sort of substantial real world *value*. The only *value* in this game is…

Ah yes, the 'substantial real world value'. Nothing better for HN upovte crowd than the self-sure idiot calling a whole industry scam, because it isn't something that he personally wants.

I bet you know the famous phrase : "Nobody ever got fired for buying IBM"

One thing I also bet you don't know is that it doesn't refer to IBM stock, it refers to the mainframes.

Crypto people should stop looking at marketcap as a confirmation that what they are building or are excited about is something of value. Xiaomi is a company incorporated 3 years after BTC whitepaper and it's ubiquitous in millions of people's lives.

At the end of the day people want a tangible product or a service, the model which has people trying to build a sociopolitical movement (and use marketcap as a gauge of its health instead of votes) is flawed because Power Law in a sociopolitical movement is even more skewed than wealth distribution in a company.

Just look at the US: only a handful of political roles really matter:

1) POTUS

2) Speaker of the House

3) Majority leader

4) Supreme Court Justices

5) Chair of the Fed

6) Secretary of Treasury

7) Secretary of Defense

8) Secretary of State

9) Joint Chiefs

10) Mayor of NYC

In crypto it's even worse. You have Satoshi, Buterin and Musk

Re: Is crypto just one big Ponzi scheme?

#60

Post by aww_dang »

jqpabc123 wrote: post #58
nathias wrote: post #51

Earlier quoted context omitted.

Ah yes, the 'substantial real world value'. Nothing better for HN upovte crowd than the self-sure idiot calling a whole industry scam, because it isn't something that he personally wants.

Nothing better for HN than name calling when you can't logically refute an argument.

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

>The subjective theory of value is an economic theory which advances the idea that the value of a good is not determined by any inherent property, nor by the amount of labor necessary to produce it, but instead is determined by the importance an acting individual places on a good for the achievement of his desired ends.

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