There is no end game. You use it in your daily life to obtain or achieve things then you die.
On the one hand, I can understand this. On the other: as a US citizen, I use it in my daily life, then I file an 8949 every year listing every single purchase I made that year, along with tracking of cost bases? I realize that this is a legal, rather than fundamental, aspect of cryptocurrency, but it does make the idea of using cryptocurrency as a quotidian currency rather frustrating compared to essentially any othe…
No need to. Luckily every transaction has been recorded for you on a public blockchain that is easily traceable to your RL identity! Makes life a lot easier for the IRS and also means your employer can check whethee you've developed a penchant for donkey porn!
“Ponzi scheme” is a specific type of financial fraud and isn’t a synonym for overexposure, excessive leverage, poor management, or even fraud in general. I do not think labeling things as Ponzi schemes which are not Ponzi schemes is helpful. Nor do I understand how that would help with effecting “real consequences.” The consequences faced by company personnel should be consequent to any wrongdoing.
Eh. Words are going to word. People conflate ponzi schemes and pyramid schemes as well. However, I'm having trouble finding where it is not. Money paid out must come from new investors. If I buy crypto for $1, I need someone willing to buy it for $2 to make money. My returns come not from any utility, but from more people investing in it.
If I buy a baseball card for $1, I need someone to buy it for $2 to make money. If I trade lumber on a commodities market, I need someone to buy it at a higher price to make money.
The new entrants condition does not qualify anything as ponzi scheme. Words should have meaning, or else what are we even talking about?
A ponzi is a specific form of fraud where the promoter misrepresents where the profits are coming from. Instead of managing a profitable enterprise, the promoter pays out current investors with the money of new investors.
Bitcoiners have been saying this whole time not to keep your crypto with a 3rd party and this is exactly why. Satoshis original message about Bitcoin mentions explicitly you don't need any trusted third party. A whole lot of people think they can make money outsmarting the original concepts of Bitcoin and they get scammed in new ways each cycle. https://nakamotoinstitute.org/trusted-third-parties/
Do you think self-custody is simple enough for mass adoption by non-technical users?
If you can write down 12 or 24 words on a piece of paper thats all you need for a backup. Hardware wallets make this easier but I agree it needs to be simplified for the masses.
Given the amount of handwringing we've seen over the past couple of weeks in re: Twitter's headcount, it astonishes me that we haven't seen anything close to that for these cryptocurrency firms. Twitter ran one of the world's largest social media networks with around 7000 people; what in the world is Kraken doing with ~3400[1]? [1]: https://www.linkedin.com/company/krakenfx
Kraken actually handles money so it needs customer service and Twitter is just a bunch of already written code for posting stuff and sometimes (although much less now!) getting ad dollars. What do (did) 7000 people do at Twitter? I hate to ask the question because it aligns me with Elon whom I despise right now. But what do all the employees do at tech companies? I thought the beauty of tech and why the valuations we…
> Kraken actually handles money so it needs customer service and Twitter is just a bunch of already written code for posting stuff and sometimes (although much less now!) getting ad dollars.
If you view Twitter as a 'service for posting 140 characters', they don't need 7000 employees.
If you view it as a 'service for supporting five billion dollars worth of ad spend across the entire world', with all the proprietary software, ads front-ends, ads back-ends and reporting services, weird one-off partner integrations, ads account management, sales, advertiser support, moderation and compliance, legal compliance... Well, all that quickly adds up to a lot of headcount.
it's fascinating how nobody learned from history. Banks and bankers have been heavily regulated as you said, "over centuries". Still today, we get lured by the same businesses (because all these lenders were just banks/financial operators) but without any of the safety nets we have in place when we work with "old school" banks.
Learning from history typically requires opening a book…
Ah, but reading a book requires taking time away from “changing the world”.
Somehow these guys peaked at about 900 employees, according to linkedin ( https://www.linkedin.com/company/blockfi ) They've raised about a billion dollars of VC - https://www.crunchbase.com/organization/blockfi-inc/investor... (note, CB lists $1.4b, of which 400M is debt from FTX, which I imagine they never got) Unbelievable the amount of destruction of value here... it's just total carnage.
I’m not convinced there’s any destruction of value when the entire value proposition is a lie. When I tell you my lemonade stand is worth a billion, and you believe it for a while, and then you realize it isn’t really, no value was destroyed.
Where do you start? You start with company that builds a lemonade stand, and they dress it up like a life changing lemonade that's going to replace all other drinks in 38 days or whatever. So let's ignore what it does, let's pretent is does literally nothing, it's just a stand. So what's next. This lemonade stand has some market price, it's probably not zero, right? Let's say it's 20 million dollars market price. Maybe in your world if you create a lemonade stand it's worth 180$. But in my world, when people create lemonade stand and twit about it, people are like "ooh, a Lemonade Stand! Noice!" and it's worth 20 millions. And all these sophisticated games go like "ohh, if there are 100 million dollars in the lemonade stand, then it's going to get 16 million dollars of profits this year. That's pretty good, let's put a little bit more into it.". And maybe that happens with the other 200 million dollars in the stand. So you know, sophisticated traders and cryptards or other similar parties decide to put 200 million dollars in the stand. And other people go like, "oh, this is a pretty cool lemonade stand, it's valuable stand, and who a re we to say it's wrong?". Lemonade stands can be great. I love lemonade as much as the next guy, right? And then people are recalibrating, "20 million dollars for this stand? that's it? it's probably valued at 1.5 billions at least!".
“Ponzi scheme” is a specific type of financial fraud and isn’t a synonym for overexposure, excessive leverage, poor management, or even fraud in general. I do not think labeling things as Ponzi schemes which are not Ponzi schemes is helpful. Nor do I understand how that would help with effecting “real consequences.” The consequences faced by company personnel should be consequent to any wrongdoing.
Labeling them as Ponzi schemes affords people in the US who lost money special tax benefits. It’s treated more similarly to theft than a bad investment. I am not sure about other countries, but in the US the label has real consequences. https://www.irs.gov/newsroom/help-for-victims-of-ponzi-inves...
I did not know this. Very interesting thank you. So is there some group responsible for officially determining if something is a Ponzi scheme or not? Perhaps in court?