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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

#161

Post by pbhjpbhj »

etskinner wrote: post #3

> It is possible for customers to take out USD stable coin loans from Celsius, under the condition that they provide a Bitcoin or Ethereum collateral of at least twice the value of the loan. How does one provide Bitcoin or Ethereum collateral? Wouldn't you have to give away your private key (maybe in escrow), or transfer coins to them?

So, you can buy Celsius and get double-leverage on moving Btc/Eth. If you know where Celsius buy their coin you don't need to move the whole market just produce a local shortage. Don't know if that's realistically workable, I wonder how rich you'd have to be?

Re: The biggest crypto lending company is a ponzi scheme

#163

Post by giantrobot »

NovemberWhiskey wrote: post #80
daniel-thompson wrote: post #56

Earlier quoted context omitted.

> it will remain very useful as a medium of exchange The only current usecase I'm aware of for crypto as a medium of exchange is for criminals, i.e. ransomware / extortion / etc.

Having raised this point in the past, the other example of where goods are priced in crypto that has come up recently is NFTs.

It's not a Ponzi scheme, it can totally be used for this other Ponzi scheme!

Re: The biggest crypto lending company is a ponzi scheme

#164

Post by Aeolun »

gonehome wrote: post #76
WFHRenaissance wrote: post #19

Earlier quoted context omitted.

I'm not a huge fan of the the current cryptocurrency scene, but I think it will remain very useful as a medium of exchange and store of value in unstable parts of the globe for years to come.

Yep agreed, and other underlying applications (NFTs as evidence of group membership or ownership that can be easily owned and transferred, an auditable historical record) have a lot of value. The ability to hold decentralized state is a resilient way is pretty cool and a lot of the finance applications are better than legacy stuff - try sending large amounts of money around in the legacy system, expect to wait severa…

> try sending large amounts of money around in the legacy system, expect to wait several days for every action

The legacy system (e.g. banks) aren’t sitting still either. In many parts of the world (Europe) a transaction is pretty much instant.

Re: The biggest crypto lending company is a ponzi scheme

#165

Post by tluyben2 »

gruez wrote: post #68
remram wrote: post #18

Earlier quoted context omitted.

So you're selling your coins for half the USD value, but you have to return the USD at some point anyway? Why wouldn't you just sell your coins at full value instead of using this "loan"?

to not realize capital gains. same reason why jeff bezos doesn't sell his amazon stocks and instead takes out loans on them.

I would think this is the main reason. Borrowing is a lot cheaper than cap gains in a lot of countries and it is legal.

Re: The biggest crypto lending company is a ponzi scheme

#166

Post by melenaboija »

Tangokat wrote: post #139

Clickbait title and no proof at all. HN hates all things crypto so much this gets upvotes even though the quality is less than Buzzfeed. Rates like these are absolutely possible to get using Defi, futures and so on. One example of doing it risk free (staying delta neutral) is by selling crypto futures contracts and buying the underlying asset to hedge. With that said, lenders like Celsius, Nexo, Crypto.com etc. shoul…

I trust HN community advices almost as much as my grandma ones.

Re: The biggest crypto lending company is a ponzi scheme

#167

Post by matheusmoreira »

photochemsyn wrote: post #129

Lending cryptocurrency as a business model seems like absolute nonsense to be honest. My entire understanding is that the bitcoin model isn't compatible with investment capitalism, nor is it compatible with high-volume low-value transactions (i.e. buying food at grocery stores). It's only real purpose is as an independent store of value, for example you might convert $US 10K to Bitcoin and then just sit on it, not re…

Lending is a fundamental operation in futures markets. It allows you to establish positions worth many times your collateral.

Re: The biggest crypto lending company is a ponzi scheme

#168

Post by adamduren »

aketchum wrote: post #63

what about blockfi, with similar interest rates but audited by state of new york regularly?

From what I can discern from their website they are not allowed to offer interest bearing accounts in NY [1] which contradicts your claim.

> Unfortunately we're unable to offer the interest account in NY.

> We're hopeful that some of the state rules and regulations surrounding crypto change in the near future so we will be able to offer our interest account in those states. Unfortunately BlockFi's hands are tied until those rules and regulations change as we take our Compliance extremely seriously.

[1] https://help.blockfi.com/hc/en-us/articles/360049344531-Why-...

Re: The biggest crypto lending company is a ponzi scheme

#169

Post by onlyrealcuzzo »

selestify wrote: post #148
onlyrealcuzzo wrote: post #112

Earlier quoted context omitted.

The Picasso is truly scarce. The NFT is artificially scarce.

That is only true at a superficial level. In terms of high-quality art, the Picasso is artificially scarce in the sense that there are reproductions so high-quality that only experts can tell the original apart from the reproduction. Clearly it's no longer the quality of the art that matters, because the reproduction visually looks just as appealing as the originally, but the provenance. There are only so many "origi…

If you're buying a $100M painting like Guernica - you should probably be an expert...

Re: The biggest crypto lending company is a ponzi scheme

#170

Post by boxmonster »

I'm interested in revenue for infrastructure, high speed rail, social obligations and defense so I'm concerned about tax cheats and money laundering. Might the same technology that is used to implement decentralization also be used by tax collection agencies in kind of a DIRS (decentralized IRS) to track the lifetime of every Bitcoin (for example) and insure the appropriate taxes are paid along the way. Maybe a tax on every transfer.
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