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Cryptocurrency Is a Giant Ponzi Scheme

jacobinmag.com

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Re: Cryptocurrency Is a Giant Ponzi Scheme

#21

Post by fwip »

This article is largely correct. You can argue that it's "not technically a Ponzi," but rather some other type of scam, but the semantics are not interesting.

The following excerpt is a point that many seem to miss.

> In fact, investors won’t — on average — be able to cash out for even as much as they put in. Much of that money went to cryptocurrency mining. Recent analysis shows that around $25 billion and growing has already gone to Bitcoin miners, who, by best estimates, are now spending $1 billion just on electricity every month, possibly more.

> That money is gone forever, having been converted to carbon and released into the atmosphere — making cryptocurrencies even worse than traditional Ponzi schemes. Most of the money lost in Bernie Madoff’s infamous Ponzi was eventually clawed back and returned to investors. Much of the money put into cryptocurrency, even if courts could trace back tangled webs of semi-anonymous cryptocurrency transactions, can never be recuperated.

Re: Cryptocurrency Is a Giant Ponzi Scheme

#22

Post by N1H1L »

prepend wrote: post #7
robcohen wrote: post #4

Same arguments from both sides, different day. So tired of the self-righteousness of both sides. The reality is that there are use-cases that are useful today with crypto. The reality is also that the vast majority of money in crypto is there for speculative reasons, not fundamental value. That's fine, it's a bet, stop caring about where people put there money. If you don't want to make a speculative bet, then don't.…

I don’t think there are two sides. I don’t think I’m self-righteous when I say that the use cases for crypto just aren’t there yet as they require a non-speculative environment to be viable. I like the idea of smart contracts and general ledger. It’s useful for buying things in theory. But at $10+ for a transaction fee that’s impossible. I’ve been waiting over 10 years. I think this is pragmatic. And I don’t think it…

> “Betting” on crypto is driving up the price and crowding out real use cases.

Additionally, that betting has cascading effects of GPU markets, and uses a small nation's worth of electricity every year. If that bet was contained only to the participants, then it's fine. But it's not.

Re: Cryptocurrency Is a Giant Ponzi Scheme

#24

Post by atoav »

k__ wrote: post #6
robcohen wrote: post #4

Same arguments from both sides, different day. So tired of the self-righteousness of both sides. The reality is that there are use-cases that are useful today with crypto. The reality is also that the vast majority of money in crypto is there for speculative reasons, not fundamental value. That's fine, it's a bet, stop caring about where people put there money. If you don't want to make a speculative bet, then don't.…

Yes, the critique became quite boring in the last year. "You're burning the world!" "We are saving the world!" Both are obviously BS.

Last time I checked (2021) the CO2 emissions of one bitcoin transaction was equivalent to driving over 2000 km in an average middle european car from the same year (see: https://www.forbes.com/sites/philippsandner/2021/11/19/bitco...)

Unless I made an error here, or that study is flawed this seems to me like a ridiculously huge amount?

Re: Cryptocurrency Is a Giant Ponzi Scheme

#25

Post by k__ »

atoav wrote: post #24
k__ wrote: post #6

Earlier quoted context omitted.

Yes, the critique became quite boring in the last year. "You're burning the world!" "We are saving the world!" Both are obviously BS.

Last time I checked (2021) the CO2 emissions of one bitcoin transaction was equivalent to driving over 2000 km in an average middle european car from the same year (see: https://www.forbes.com/sites/philippsandner/2021/11/19/bitco... ) Unless I made an error here, or that study is flawed this seems to me like a ridiculously huge amount?

To be fair, Bitcoin proponents don't even see this as critique, they say it's by design and everything more efficient would jeopardize their goals, lol.

Re: Cryptocurrency Is a Giant Ponzi Scheme

#26

Post by lariati »

I really would love a browser plugin that removes all mention of crypto/web3/etc..

I am just so bored with reading about anything to do with the entire space, pro or con.

An inescapable argument about basically nothing. How do I opt out completely?

Re: Cryptocurrency Is a Giant Ponzi Scheme

#27

Post by rjakobsson »

prepend wrote: post #18
dqpb wrote: post #13

Earlier quoted context omitted.

> But at $10+ for a transaction fee that’s impossible Algorand transaction fees are a fraction of a cent.

That’s great news, but the major projects like BiCoin and Ethereum are super expensive to do transactions. I hope Algorand takes off as micropayments are a really nice use case and I’d like to be able to use it. Just simple stuff like sending $20 worth on a paper wallet to niblings for their birthday. I just want to stop using cash.

I’m sorry, but you are vey misinformed regarding the transaction cost of Bitcoin.

Re: Cryptocurrency Is a Giant Ponzi Scheme

#28

Post by rjakobsson »

atoav wrote: post #24
k__ wrote: post #6

Earlier quoted context omitted.

Yes, the critique became quite boring in the last year. "You're burning the world!" "We are saving the world!" Both are obviously BS.

Last time I checked (2021) the CO2 emissions of one bitcoin transaction was equivalent to driving over 2000 km in an average middle european car from the same year (see: https://www.forbes.com/sites/philippsandner/2021/11/19/bitco... ) Unless I made an error here, or that study is flawed this seems to me like a ridiculously huge amount?

This is a false comparison.

Re: Cryptocurrency Is a Giant Ponzi Scheme

#30

Post by boppo1 »

Mountain_Skies wrote: post #2

Mostly but as long as you're not the one holding the last tulip, you can profit greatly. It does bother me to see how many young people are being taught it's an investment rather than a game of economic chicken. Then again, so much in our modern economy is that way that one can hardly blame them from not seeing the danger.

> young people are being taught it's an investment rather than a game of economic chicken.

I mean, crypto is sorta garbage, but so are all the fiat currencies. Orthodox economics apparently says it's totally cool to print money to support ditch-digging because it makes jobs reports look good. The US Fed itself acknowledges in its own reports that the US is financially unsustainable. Does anyone see how this doesn't just collapse sometime in the next 50 years?

Unless we start a big war with China...

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