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The entire crypto ecosystem is a ponzi

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Re: The entire crypto ecosystem is a ponzi

#261

Post by IncRnd »

NaturalPhallacy wrote: post #157
jeremyjh wrote: post #85

Earlier quoted context omitted.

It isn't money. Money can be easily exchanged for goods and services. It is a digital "asset" whose only meaningful application is speculative trading...of itself. If something only has value because you think you can sell it to the next sucker for more, it is a ponzi scheme.

>It isn't money. Money can be easily exchanged for goods and services. And people do. There's a bitcoin ATM at my local liquor store. And a strip club downtown that takes bitcoin.

You (but not many other people) can purchase liquor and sex, but you can't go to a grocery store the next morning and buy coffee for your hangover. You can't replace your totaled car that was lost during your escapades, either.

Re: The entire crypto ecosystem is a ponzi

#263

Post by bb88 »

rosnd wrote: post #244
mrkeen wrote: post #145

Earlier quoted context omitted.

Maybe the post was edited? I don't see the clear explanation. Here's an exercise, I'll replace a bunch of words with their opposites, and present it as my counter argument: "This is a great argument, and not clickbait. Obvious enough to anyone who actually understands how bitcoin, or eth work, it fits the definition of a ponzi scheme." Are you convinced? Do you know where you got it wrong?

Cryptocurrency is as much a ponzi as it's a car. Cryptocurrency in general is not an investment promising profits, but a tool for payments (or a smart contract platform, whatever). A Ponzi scheme is a fraud which takes money from investors, pretends to invest it in something profit-generating , but only pays out profits to earlier investors using funds from more recent investors. Cryptocurrencies like bitcoin, ethere…

You're still not convincing me here. But you should be rewarded for making an argument I guess -- your snark aside.

I'll use the wikipedia definition for a ponzi scheme because it's simpler.

> A Ponzi scheme (/ˈpɒnzi/, Italian: [ˈpontsi]) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.

It doesn't say dividends. It just says "pays profits". Those profits in dollars could be realized by the early investors selling their stake. No dividends needed -- though some would say "mining" is a dividend producing activity -- I'm not sure I would though.

Re: The entire crypto ecosystem is a ponzi

#265

Post by rosnd »

bb88 wrote: post #263
rosnd wrote: post #244

Earlier quoted context omitted.

Cryptocurrency is as much a ponzi as it's a car. Cryptocurrency in general is not an investment promising profits, but a tool for payments (or a smart contract platform, whatever). A Ponzi scheme is a fraud which takes money from investors, pretends to invest it in something profit-generating , but only pays out profits to earlier investors using funds from more recent investors. Cryptocurrencies like bitcoin, ethere…

You're still not convincing me here. But you should be rewarded for making an argument I guess -- your snark aside. I'll use the wikipedia definition for a ponzi scheme because it's simpler. > A Ponzi scheme (/ˈpɒnzi/, Italian: [ˈpontsi]) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. It doesn't say dividends. It just says "pays profits". Those pro…

Cryptocurrencies generally don't pay profits. Ethereum sort of does if you're staking, but that's out of reach for "normal people".

You always have exactly the same amount of cryptocurrency, with no serious claim made by the authors as to why you should profit by merely owning some.

(Of course, it's a bit silly of me to use "cryptocurrency" as a general term when there certainly are cryptocurrencies which are ponzis. But I'm referring to the "serious" projects like Bitcoin, Ethereum or Monero)

Also, you forgot a crucial bit from the wikipedia page:

> Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are coming from legitimate business activity (e.g., product sales or successful investments), and they remain unaware that other investors are the source of funds.

> leads victims to believe that profits are coming from legitimate business activity

I don't think this is true of any of the big cryptocurrencies.

> and they remain unaware that other investors are the source of funds

Of course everyone knows this.

Re: The entire crypto ecosystem is a ponzi

#266

Post by tasuki »

stephc_int13 wrote: post #236
tasuki wrote: post #233

Earlier quoted context omitted.

> The scam seems so obvious If it is do obvious that all cryptocurrency is a scam, would you mind explaining why? Do you think national currencies are also a scam?

Yeah, it is pretty easy, crypto value is built either on Ponzi or on the Greater Fool principle. National currencies, issued by states are not a scam.

I agree cryptocurrencies need a greater fool to have value. But how then are national currencies different? The same greater fool principle applies: if no greater fool wants the national currency anymore, it ceases to have value.

Re: The entire crypto ecosystem is a ponzi

#267

Post by sershe »

carewell wrote: post #256
sershe wrote: post #207

Earlier quoted context omitted.

If you generalize from drugs example, crypto (may) help you do things governments do not want you to do. Drugs are just one widespread restriction; and you may view Western governments as generally competent and benevolent (to be clear, I do not), and drug prohibition as necessary evil. But it's hard to claim that most governments around the world and competent and benevolent, and easy to get excited about people bei…

I would love to agree with this argument. And maybe 5 years ago I would have. But so far crypto has not demonstrated that it can really solve the issues you are listing. Yes, it can result in some capital outflow from oppressive countries, but that does not have a big impact on these people or the regimes. The stories that are being written are not of a hard-working farmer who was able to save some monero and move it…

The main difference here precisely "not your keys not your coins". Replacing govt-influenced/controlled banks with some rando pseudo-bank is only a net positive for a really terrible govt...

And because of the complexity, I doubt crypto will succeed in its goal. It might get regulated but then it's probably no better than banks, since it would be restricted from the uses a govt doesn't like similarly to money in a bank.

Re: The entire crypto ecosystem is a ponzi

#268

Post by nikanj »

lrvick wrote: post #246
nikanj wrote: post #90

Earlier quoted context omitted.

Tell me how many BTC a new TV is going to be in two years, I'll tell you how many USD it'll be. As a stable, inflation-resistant currency, the BTC value should be easy to predict

The simple moving average for 1BTC should be around $50,000, so a $500 TV will be about 0.01BTC. Hype or fear may drive the price higher or lower than that, but if you regularly buy and spend bitcoin then the swings average out back to the simple moving average over time, which reliably increases against USD. I get paid a fixed USD amount of Bitcoin every month regardless of price so my exposure to it similarly avera…

Why don’t you get a fixed BTC amount? Why anchor it to USD if BTC is the more stable option?
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