As capitalism is
The entire crypto ecosystem is a ponzi
221–230 of 268 posts
Re: The entire crypto ecosystem is a ponzi
#222Cryptocurrency in its purest is money not issued or controlled by a government. Instead the supply inflation is controlled by transparent rules that are plain to see. “Protocol-based finance” vs. the existing government-based finance. Now there are all manner of divergences from the above paragraph. Coins that are totally controlled and issued by a small group or company. Black box rules rather than transparent. Ther…
I used to agree with you; but I think this line of thinking takes a (core) feature of money (trust in its value) and reduces the whole thing down to just it. Fiat money has another core feature in its definition: that you can pay taxes to a government using that currency. Similarly, equity in a company comes with dividends: a core cashflow that you can predict based on P&L. Trust in their current (and most importantl…
The counterpoint to the “fiat mindset” (not to criticize you, but how I categorize it) is gold. There is no reason why gold is valued so highly other than historical and traditional reasons - its industrial utility is far lower than its monetized value.
IMO Bitcoin is superior to gold in nearly every single aspect. The only thing it doesn’t have is 5000 years of human belief in its worth.
If you understand logically why gold in 2022 has a monetary premium above its industrial value, then you can logically reason about Bitcoin and its value.
If you accept that Bitcoin has long term utility and value, then it isn’t a stretch to start analyzing other coins on similar valuation heuristics.
Re: The entire crypto ecosystem is a ponzi
#223Earlier quoted context omitted.
The problem is HN is an exhausting circular firing squad when it comes to crypto. I could extol the benefits of private currency on philosophical and moral grounds but this won’t convince a lot of people. So I try to put it in more concrete terms and then it’s either criticized or brushed off. If you believe as I do that government control of money is a mistake for many different reasons, then crypto is a revolutiona…
No, that's not the issue. The problem with crypto is the grift -- and the inability to see what's a grift and what's not. I believe the term "rug pull" is the vernacular in the crypto community you may be familiar with.
Nikola (US public company) was a grift and thousands of retail traders lost money despite all the protections of the SEC and other regulators. The CEO is going to jail but most people will get very little in compensation, if anything.
If the current system is so flawless, why does this keep happening? Clearly the system is not flawless.
I myself am extremely technical and able to understand the crypto industry. I can separate scams from not-scams.
Similarly, the Machine Learning / AI industry is chock full of charlatans and scammers who have stolen billions from investors. For example, Watson from IBM is a hyped technology and product that has now been shuttered.
The unique element of crypto is a retail investor can put their life savings into a scam. This is unfortunate but not a reason to ban the tech.
Nothing stops a lower-class person from entering a casino or using a sports betting app and losing their house. The pearl clutching on HN is legendary.
Re: The entire crypto ecosystem is a ponzi
#224Earlier quoted context omitted.
I used to agree with you; but I think this line of thinking takes a (core) feature of money (trust in its value) and reduces the whole thing down to just it. Fiat money has another core feature in its definition: that you can pay taxes to a government using that currency. Similarly, equity in a company comes with dividends: a core cashflow that you can predict based on P&L. Trust in their current (and most importantl…
The counterpoint to the “fiat mindset” (not to criticize you, but how I categorize it) is gold. There is no reason why gold is valued so highly other than historical and traditional reasons - its industrial utility is far lower than its monetized value. IMO Bitcoin is superior to gold in nearly every single aspect. The only thing it doesn’t have is 5000 years of human belief in its worth. If you understand logically…
That's a good counter; but gold does have a minimum value separate from trust in its future value: it can be used for jewelry / metallurgical applications, etc. and it won't rust / oxidize. And gold is a lousy currency: risky, expensive to store, tied to natural resources, etc.; I guess just like BC :-)
Re: The entire crypto ecosystem is a ponzi
#225Earlier quoted context omitted.
The counterpoint to the “fiat mindset” (not to criticize you, but how I categorize it) is gold. There is no reason why gold is valued so highly other than historical and traditional reasons - its industrial utility is far lower than its monetized value. IMO Bitcoin is superior to gold in nearly every single aspect. The only thing it doesn’t have is 5000 years of human belief in its worth. If you understand logically…
That's a good counter; but gold does have a minimum value separate from trust in its future value: it can be used for jewelry / metallurgical applications, etc. and it won't rust / oxidize. And gold is a lousy currency: risky, expensive to store, tied to natural resources, etc.; I guess just like BC :-)
It has a minimal value but it’s far less than its monetary premium. If you are investing in gold (as many mainstream wealth managers and central banks do) then you aren’t assessing “what is the minimum my investment can fall to based on fundamental industrial utility?” The investment thesis for gold completely ignores any potential for demonetization or else the investment is suicidal.
Re: The entire crypto ecosystem is a ponzi
#226Earlier quoted context omitted.
The burden of proof is on the crypto promoters to demonstrate ability to create wealth. This was not the case up to now, the only thing crypto produced were speculative assets that have very little legitimate uses. For example, major cryptocurrencies like Bitcoin aim to replace state issued fiat currencies with privately issued currencies that have limited/fixed supply and no connection to the real economy. That's in…
> The burden of proof is on the crypto promoters to demonstrate ability to create wealth. For crypto to be financially successful, strictly speaking it doesn't need to create wealth, it only needs to attract it. Plenty of profitable businesses are arguably a net negative to society - tobacco, gambling, private prisons, ad agencies, data brokers - but that doesn't make them ponzi schemes.
The tobacco industry produces net wealth: products people are willing to buy and enjoy. You might morally disagree with the premise of that need, addiction, but nonetheless, in our current society tobacco products are intrinsically valuable.
Speculative crypto assets are not intrinsically valuable, they have no desirable properties other than the ability to make you rich in the future by selling them to someone else. If investors would be guaranteed their crypto assets will not appreciate, the vast majority would dump them immediately. (so called stable coins are the exception, but they only make sense as a component of the crypto ecosystem, people need them as enablers of speculation).
You might argue that the need to hope for quick financial success is a basic human need, which crypto fulfills, so it does indeed provide value for its users; but by then it's indistinguishable from classic Ponzi schemes or gambling. It's in fact even more toxic than gambling, since it disguises as a form of wealth creation and legitimate investment, as opposed to a game of poker which every investor can recognize as zero sum.
Re: The entire crypto ecosystem is a ponzi
#227Earlier quoted context omitted.
When one says bitcoin is not inflationary, they mean that the supply does not inflate. You are accurate that bitcoin's purchasing power can wane aka deflate. In my opinion and many others it is moot because everything deflates. As far as we know, there is not a single thing in existence that is void of inflation by your usage of the term. Therefore, we move beyond that version of the definition to the practical and u…
> When one says bitcoin is not inflationary, they mean that the supply does not inflate This is wrong. Not matter of opinion wrong, factually wrong. > bitcoin's purchasing power can wane aka deflate This is also wrong. Waning purchasing power is the definition of inflation. Bitcoin was marketed as an inflation hedge. It hyperinflated. Solving that by redefining inflation is dishonest. > the practical and useful defin…
> a small group of miners can amend the protocol
You mean a large group of miners, right? And please don't negate what someone says with just "that's wrong". How is that helpful? I clearly said the literal definition of inflation is not useful because every single thing in existence is inflationary meaning bitcoin is as inflationary as every other thing. We use the term in regards to money as meaning the supply doesn't increase and I believe you are fully aware of that.
Re: The entire crypto ecosystem is a ponzi
#228Crypto recreates everything Bitcoin was supposed to prevent. 1. Tether: infinite money printer central bank 2. Exchanges: banks 3. Binance: too big to fail 4. BSC shitcoins: fully centralized currency
Yes. Also Bitcon =/= Crypto.
But tether is propping up btc. Most large btc holders desperately want tether to hold together
Re: The entire crypto ecosystem is a ponzi
#229Earlier quoted context omitted.
That's a good counter; but gold does have a minimum value separate from trust in its future value: it can be used for jewelry / metallurgical applications, etc. and it won't rust / oxidize. And gold is a lousy currency: risky, expensive to store, tied to natural resources, etc.; I guess just like BC :-)
It has a minimal value but it’s far less than its monetary premium. If you are investing in gold (as many mainstream wealth managers and central banks do) then you aren’t assessing “what is the minimum my investment can fall to based on fundamental industrial utility?” The investment thesis for gold completely ignores any potential for demonetization or else the investment is suicidal.
That's fair. But then your investment thesis is based on the value given to gold by large institutions that can/will create a price floor. Which yes, is absolutely based on trust-in-future-value, but in the case of gold that trust is widespread and tied to large, centralized financial institutions and thus regulations and eventually fiat (because in the end you will have to convert to fiat).
I can see that getting replicated for BC, but other crypto, not so much. A better, digital, asset than gold makes sense, but distributed, slow, state machines? Still don't get those...
Re: The entire crypto ecosystem is a ponzi
#230Earlier quoted context omitted.
> It always surprises me how a tech/startup oriented forum like HN is so negative towards crypto. Maybe because people here are more likely to understand it? Edit: added a missing quote
So your claim is that all the developers working on Bitcoin, Ethereum and Monero are not able to understand it? I have a master's degree in CS, and I'm not able to understand it?
No, the claim is that technical people which do not have a conflict of interest are more likely to share their real understanding.
Of course Solidity developers of the latest rugpull DeFi know very well what they are doing, but they are unlikely to come out in the open and confess it. Some do anonymously though, go read some Coinfessions horror stories.