The more complex crypto seems, the higher the pyramid schemes can go

https://reallifemag.com/money-for-nothing/

by RuffleGordon • 5 years ago

190 193 5 years ago

The fact that there is so much money, SO much money, being thrown around a technology that is dodgy at best, and a scam at worst, is terrifying. I'm certain this technology will find a place in the future after it has matured, but hoo boy are there gonna be big winners and big losers until it shakes out.

beervirus3• 5 years ago

I'm certain this technology will find a place in the future after it has matured

Why? It doesn’t solve any real problem that anyone has ever had.

radicalbyte• 5 years ago

It solves the problem of: how can I start a pyramid scheme relatively anonymously.

haolez2• 5 years ago

While you wrote this, your country's Central Bank printed a few billions (or trillions, if you are american) in your currency, so that your money now is worth a lot less than before.

Kinrany• 5 years ago

It does solve the problem of being unable to get a bank account. In theory, once the scaling problems are solved and the transactiom fees go down.

nyolfen4• 5 years ago

how about this: https://i.imgur.com/lSfdTfK.jpg

_Microft2• 5 years ago

Crypto technologically solves the social problem of trust.

I‘ll leave the interpretation of this statement up to you ;)

FDSGSG2• 5 years ago

It solved the problem of paying for drugs which you ordered online.

It solved the problem of ransomware payments, before winlockers used to ask for gift cards which didn't scale well.

It solved the liberty reserve problem where the US government shuts down your sketchy no-KYC money transfer platform.

At a very general level cryptocurrency has solved the "anonymous online payments"-problem.

These are all very real problems solved by cryptocurrency.

o_p4• 5 years ago

I hoped HN to have a more informed take but I guess not.

Blockchains solve the problem of having a decentralized public database, currency is just a particular use

SavantIdiot9• 5 years ago

Un-alterable ledgers like blockchain are incredibly useful for legal and economic applications. Unfortunately there are a lot of caveats that need to be worked out, and crypto is finding them at scale.

arcticbull14• 5 years ago

The fact that there is so much money, SO much money, being thrown around a technology that is dodgy at best, and a scam at worst, is terrifying.

We have very little evidence to substantiate the actual quantity of real dollars in this system.

The NYAG settlement with Tether shows that it's backed by bailing wire, chewing gum and hope [1]. USDC has stopped publishing their attestations as of January (which, btw, - and I can't believe I'm going to cite Tether's Saul Goodman but - aren't audits [2]) and since then it's market cap has doubled. USDT and USDC both use similar weasel wording about the nature of what backs them.

An attempted ETF a couple of years ago admitted 95% of all trading volume in the crypto space was fake. [3]

The CFTC smacked Coinbase because literally 99% of all Litecoin trading volume in 2017 was one dude, Charlie Lee - the LTC founder, wash trading internally [4]. Lee then took advantage of the market cap he synthesized, dumped literally all his holdings at the peak and sailed off to an island.

This is just a couple of examples off the top of my head. It's all fraudulent.

[1] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen...

[2] https://twitter.com/bitcoinlawyer/status/1386146486359150597

[3] https://cointelegraph.com/news/bitwise-calls-out-to-sec-95-o...

[4] https://cftc.gov/PressRoom/PressReleases/8369-21

SavantIdiot9• 5 years ago

This is really useful information. I have a cadre of friends who are serious crypto heads and I almost dread hanging out with them because they are so deep into it. I'd be curious to hear their perspective after I understand these links.

Animats2• 5 years ago

We have very little evidence to substantiate the actual quantity of real dollars in this system.

This is especially true of NFTs. With each item unique, there's no meaningful market price. There are just occasional stories about sales.

This is important. With a commodity that has an active market, prices have some meaning. You can usually sell your asset at roughly the current market price. This is not true of unique items. You have to find a buyer who wants your specific thing.

This works just like collectables on eBay. Here's a current collectable.[1] "Rare Tag Error Retired Ty Beanie Baby Claude The Crab 1996 Collector - US $1,235.00 [ 0 bids ]" Note the "0 bids". Now keep scrolling down until something shows up with a bid.[2] "Princess diana beanie baby 1st edition 1997 w/o tag US $0.99 [ 1 bid ]" That's what a willing buyer is prepared to pay. You can scroll through page after page of Beanie Baby asking prices without seeing anything with a bid.

That's what an NFT market looks like when you want to sell.

The NFT market is useful only to those with a fan base they can monetize. If you're the fan, you're the sucker.

[1] https://www.ebay.com/itm/194065105880

[2] https://www.ebay.com/itm/254955747357

rawtxapp5• 5 years ago

This is just a couple of examples off the top of my head. It's all fraudulent.

I'm not sure how you go from a few examples to -> "it's all fraudulent". Does crypto attract gamblers, crooks and manipulators? Yes, 100%. Does the same kind of behavior also happen on the stock market? Yes, 100%[1][2]. Hedge funds on wall street are doing all kinds of manipulations as well, it doesn't make the whole stock market fraudulent.

1: https://www.wsj.com/articles/what-is-archegos-and-how-did-it...

2: https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80...

bonestamp2• 5 years ago

We have very little evidence to substantiate the actual quantity of real dollars in this system.

I assume the SEC at least has some idea of how much has been deposited through SEC regulated exchanges. That might be the most useful place to get a rough low ball number.

singularity2001• 5 years ago

   >>> We have very little evidence to substantiate the actual quantity of real dollars in this system.

This is one question I'm really interested in: How much money did Coinbase, Kraken and Binance receive so far? That's pretty much the whole real worth of the crypto space (IMO). Everything else is just "look I have 1000000 signed pieces of papers, I sold one for 1000 to my friend, so I'm a billionaire now."

ajkdhcb23• 5 years ago

But you are ok with the fractional reserve banking system that has now reached the point there are sometimes literally no legally required reserves?

If you behave anywhere near as absurdly as the traditional financial system then everyone calls you a scam.

erentz• 5 years ago

The CFTC smacked Coinbase because literally 99% of all Litecoin trading volume in 2017 was one dude, Charlie Lee - the LTC founder, wash trading internally [4].

I don’t have any skin in this. But I found it interesting so read it and the timelines don’t seem to match your claim here about Charlie Lee.

“The order also finds that over a six-week period—August through September 2016...”

Note he sold in December 2017. Well over a year after this. So it sounds like maybe that could’ve been him when he was working there. But anything subsequent is on Coinbase. (Sadly not surprising that SV mindset would legitimize securities fraud as a means for growth hacking since they make up numbers everywhere else.)

xiphias2• 5 years ago

All of these are great things happening for regulations getting stronger over time.

But at the same time there's one thing that you can be sure of: when you own Bitcoin, you can go through the whole blockchain with a client even from many years ago, and have cryptographic proof that you own it, and that the blocks were created according to Bitcoin's rules.

rawtxapp5• 5 years ago

Similar to dot-com bubble where people were investing their life savings into companies that just had a domain name with no business plan whatsoever. Lots of them blew up, but the ones that made it through ended up becoming trillion dollar companies.

arcticbull14• 5 years ago

Yes, it's like that, but with the completely unregulated trading environment reminiscent of the Roaring 20s. That's why it's much, much worse. The dot-com bubble was driven by margin, enthusiasm and poor decision making. This one's got all those plus the hallmarks of the 20s: insane leverage (see: DeFi), bonkers leverage (see: BitMEX), and a fictional currency being printed at a rate of billions of dollars per week that's then used to prop up the prices of the assets themselves.

It's basically the dot-com bubble, the roaring 20s and 2008's CDO shell game rolled into one.

grey-area2• 5 years ago

Only if you use a circular definition of made it through which means became a trillion dollar company.

Plenty of companies made it through but never recovered their dotcom market cap or prestige, a few prominent examples: Csco, hpq (only recently passed the 2000 price), yhoo, emc, vrsn, real networks. There were plenty of also-rans who limped through but didn’t justify the hype pricing years later, and the real revolution came to fruition years later with mobile computing and mass-market online stores, but there was definitely underneath it all an obvious and real information revolution which the dotcom bubble was merely irrational euphoria about - everyone knew sonething big was happening, even if they rejected the crazy prices.

I sincerely don’t think this crypto bubble is similar, because there is no there there amd because almost all assets are severely overpriced right now - crypto is full of scams and nobody is actually using it any more as a currency, this means all these joke coins worth 100s of millions are going to zero, no doubt just after joe public buys in. There’s a reason coin base insiders are frantically selling as soon as they can and more and more frauds are coming to light. Even the more legitimate companies in this space are full of fraud.

Zamicol• 5 years ago

being thrown around a technology that is dodgy at best

I have yet to meet someone that says this who has foreseen the implications of defi. In my mind, as an early bitcoiner, that was the original promise of bitcoin.

A list of coins by market cap is full of absolute junk: https://www.coingecko.com/en

A list of tokens by locked in value is full of systems that are revolutionizing finance: https://defipulse.com/ Defi protocols are providing useful services and are making money. I doubt I could overstate their enormity.

There's a huge difference between the two worlds. Don't confuse dogecoin's "I like the stonk" hype with Maker's muscle. The "blockchain" isn't the point. The systems made possible on top were always the point, and that's what makes "blockchain" so valuable.

gpvos• 5 years ago

defi = decentralized finance, https://en.wikipedia.org/wiki/Decentralized_finance

monkeydust2• 5 years ago

I have to agree aside from the nonsense coins there is something going on about Defi that makes me think it could rewrite a lot of capital markets.

The beauty of it is that it's all software, no middle, back office teams running reports and reconciliation processes.

TechBro8615• 5 years ago

FYI, but this is HN, so you might like to know that "enormity" has a specific meaning with negative connotation, it's not just a way to describe something as "really big," (enormous) but rather "really evil."

teh_infallible• 5 years ago

^^ You would think a group of engineers and founders would see that, and yet HN remains stubbornly, irrationally anti-crypto.

gonehome• 5 years ago

Agreed - the DeFi tech is really interesting: https://medium.com/dragonfly-research/what-explains-the-rise...

There's a lot of snake oil speculative no knowledge spam from people that easily give off a bullshit vibe. So I get that a lot on HN that haven't closely looked at it would be turned off by that and just dismiss it entirely out of hand.

There's some real stuff going on here too and it's worth a deeper look - I think the knee-jerk dismissal is a mistake. At this point over ten years in, it's worth at least taking a deeper look at even if (I'd argue especially if) you're a skeptic.

I also suspect there's some pseudo-intellectual skepticism cynicism as signaling going on like there always is.

Specifically on BTC: https://www.matthuang.com/bitcoin_for_the_open_minded_skepti...

ignoramous• 5 years ago

"I like the stonk" hype with Maker's muscle.

Some of the tech in the web3 space is so genuinely interesting [0]. And defi's evolution has been nothing short of rapid. It is kind of sad that crypto-currency related topics don't invite as much positive attention and technical discussion on HN.

[0] Especially, XaaS apps on top of Ethereum v2, Cosmos, and Polkadot.

eMGm4D0zgUAVXc72• 5 years ago

I'm pro-crypto-currency but I don't understand this, explanation follows:

A list of tokens by locked in value is full of systems that are revolutionizing finance: https://defipulse.com/ Defi protocols are providing useful services and are making money. I doubt I could overstate their enormity.

The top ones are all lending and exchanges.

Lending money to someone isn't revolutionary, it's been possible for centuries - and given how easy crypto is to steal and never return, I wouldn't WANT to lend it to anyone anyway!

And decentralized exchanges are cool for sure, but they are self-serving in terms of only needing to exist because cryptocurrencies exist. So they can't really be used as a pro-crypto argument like you're doing because then the solution you're arguing for would only need to exist to solve a problem which it has created itself.

So what is so revolutionary about these?

graeme7• 5 years ago

I have yet to meet someone that says this who has foreseen the implications of defi.

Can you give a use case that isn’t intra crypto speculation? That seems to be what Defi consists of at present.

Ultimately finance serves to help with capital allocation and production in the real economy. So: is Defi helping the real economy do things it couldn’t do before? Or, is there a plausible use case for this in formation?

Please be specific. A lot of people seem enthused by this, but no one has been able to explain it in a way that shows the use.

norswap2• 5 years ago

The top 7 on Defi Pulse (1) are currency exchanges ("liquidity pools") and overcollateralized loans, which are mostly used by speculators to get leverage. Useful, I guess. But enormous — only in monetary terms.

I believe crypto & blockchain technologies have a future. But we ain't there yet.

(1) and I suspect more than that, those are just those I'm familiar with.

jrochkind1• 5 years ago

Yes. And I think the OP correctly suggests that this... not unique, it's increasing parts of the economy.

It is understandable enough to want to participate in such collective delusions. It’s much more fun to be awed by not getting a movie than to realize that you do get it and it’s just boring. This same idea also helps explain speculative bubbles. It’s more fun to believe in magic than to recognize how much of financialized capitalism is just scams and pyramid schemes. Nonetheless, if the popular press is full of explainers “clarifying” what a “very complicated” investment phenomenon is all about, hide your wallet: You are being shilled into a game of Three-Card Monte.

danaris• 5 years ago

The fact that there is so much money, SO much money, being thrown around

This is the kind of thing that happens when the wealthiest people have so much more than everyone else: there are enough people with vast amounts of money that they have no idea what to do with that they can easily fund a bubble like this, especially when they are promised by smart-sounding geeks that this is The Next Big Thing that will a) let them get in on the ground floor of a whole new currency, and b) give them a way to leverage their wealth to retain and increase their power as we gradually move more and more toward a post-scarcity society.

wickoff4• 5 years ago

It's understandable why people consider 100% of crypto to be a scam.

But several projects have an actual P/E ratio now. You can't deny a P/E ratio. Value is being created here.

In 2013 bubble everything was bitcoin clone but "better". No cash flow. In 2017 it was unregulated securities - illegal, no cash flow. In 2021 with Defi you don't need to struggle to explain anything.

People get paid for providing capital at a higher rates than in traditional finance because smart contracts are removing friction. Stakeholders get paid dividends for governance, just like a normal company.

meltedcapacitor• 5 years ago

LOL defi is a neat idea but the current reality is order of magnitude slower and orders of magnitude more expensive than "legacy". It adds a lots of friction. Players "get paid" because folks can't read smart contracts and see that behind the cover story it's just flows from new players to exiting players, which looks good as long as inflows are larger than outflows, which of course will last forever.

Daishiman• 5 years ago

now. You can't deny a P/E ratio. Value is being created here.

Which ones?

Nasrudith3• 5 years ago

Madoff had a price to earning ratio too. I don't think that variable doesn't say what you think it does. Higher rates implies more risk which certainly applies to cryptocurrencies.

SavantIdiot9• 5 years ago

You can't deny a P/E ratio. Value is being created here.

Oh yes, yes you can. You're talking about a currency exchange, not a commodity. I guess you weren't around for the last two bubbles.

There literally is no value being created. Coinbase earnings are based on people paying to use its service, and that service is trading imaginary currency with no intrinsic value. Unlike a semiconductor, oil, or even industrial labor.

graeme7• 5 years ago

Can you please give specific examples which are enabling things that aren’t intra crypto speculation?

The only examples I’ve seen tend to be services that make money off crypto investing, which is obviously circular: those revenues ultimately depend on there actually being value in crypto.

But perhaps there are cases I’ve missed.

legulere2• 5 years ago

A lot of people that invest simply lack better alternatives. On the other hand the people that could invest reasonably like homeowners in energy efficiency do not have the money to do so, with the current monetary policy. Even if they had, they would gain more from investing in overvalued assets that have a growth in value detached from reality, driven by loose money supply for investors.

dehrmann4• 5 years ago

A lot of people that invest simply lack better alternatives

Yeah, stocks haven't had a good year in over a decade /s

SavantIdiot9• 5 years ago

lack better alternatives

What?!

Wow, this is a painfully misinformed statement. Like, so misinformed I want to hug you.

Index funds have consistently beaten inflation by double digits and have practically nil management fees. They are vastly more secure alternative to imaginary crypto exchanges.

one2three4• 5 years ago

That. Combined with the fact that so many productive people and healthy business have limited or no access to it.

api3• 5 years ago

The last part is why so much money is in it. Everyone remembers how everyone said dot.com was over in 2002 when the biggest dot.coms were yet to come. Everyone remembers when everyone laughed at Tesla and SpaceX. Everyone remembers Bitcoin at $1.

There is a hell of a lot of FOMO around.

There are also record low interest rates not just in the USA but globally, and that is inflating every asset at once.

If there is a crash I don’t think it will just be cryptocurrency. It will be broad and deep.

berryjerry• 5 years ago

I see this too. Almost every asset class is moving together. When interest rates can't be dropped further then the real problems will begin. Banks have built floors into their loans so that variable rates can't drop below zero already. At the point when interest rates drop below zero, lower interest rates will actually harm the economy rather than help it and then we'll see everything come crashing down.

gofreddygo• 5 years ago

Crypto space feels like a decentralized slot machine spiraling out of control with shiny lights, loud sounds and exponential payouts.

Always worth reiterating: the house always wins.

jdgoesmarching• 5 years ago

This is a really fantastic article above and beyond what the headline suggests. I recommend giving it a full read.

gervwyk• 5 years ago

Agreed. Writing of this quality is very rare, such a talented author.

pierrebai• 5 years ago

I disagree, but to each its own. I thought it was full of condescending takes.

For example:

    - "getting" Memento does not make it boring.
    - Finding the art world being often vacuous does not mean you are an acculturated ignoramus.
    - Electricity does not make blockchain valuable, it's both the social and proof-of-work, the electricity cost is incidental and unrelated. (Bitcoins and NFT works even if you are ignorant of its inner workings.)

tfang17• 5 years ago

Every technology comes with good and bad. Better and more rewarding to be an optimist!

kabdib• 5 years ago

Comparing tulip bulbs and NFTs: With one of them you can grow a flower, while the other isn't even good fertilizer.

In the past weeks I've seen a ton of ads (on Youtube, Twitter, etc.) that look an awful lot like elements of pump-and-dump schemes. Even to this financial idiot, the scam factor looks very high.

RichardHeart• 5 years ago

People overpaying for serial numbers loosely related to jpgs is terrible in my opinion. There's truly intelligent and useful things going on in cryptocurrency. Don't like the bubbles? There's billions in stable coins tied to the dollar, like the $11 billion in US based USDC. There's scams galore, just like in all other markets, but this one actually makes technical progress day by day.

dehrmann4• 5 years ago

Don't like the bubbles? There's billions in stable coins tied to the dollar, like the $11 billion in US based USDC.

Unless I'm trying to avoid high transaction fees when exchanging currency with an undeveloped banking system with dollars, what's the point? My dollars already work fine, and for large amounts, international wire transfers work well.

timbit42• 5 years ago

My dollars already work fine

Only if you don't mind the deflation.

dmitriid2• 5 years ago

like the $11 billion in US based USDC.

"USDC is issued by regulated financial institutions, backed by fully reserved assets, redeemable on a 1:1 basis for US dollars"

$11 billion dollars in reserved assets? Instantly redeemable? Why does this remind me of another scam with similarly "backed by assets" USDTs

0tt049• 5 years ago

Try to cash $11B out of a bank then

diego2• 5 years ago

The author of the article may have some valid points, but she doesn't understand crypto so she completely discounts any mechanisms of value creation that might come from it. Near the end of the article it gets really bad. She attempts to make the case that paper menus are more efficient than apps, without doing any math whatsoever:

For example, delivery apps make it feel “easy” to order food, when in fact we are spending much more in buying the phone, keeping it charged, paying our data plan, paying our subscriptions, and so on, for every order — in other words, we are using more hours of our labor to do so. Before smartphones, we could call the restaurant with a landline, but we also had to have previous knowledge of the restaurant as well as potentially a menu or at least a phone book’s yellow pages. The app replaces the drawerful of menus with a commensurate amount of electricity, which we pay for when we buy and charge our phone and pay our phone bill, which the restaurant pays for on their end in keeping their computers up, and which the app skims a huge percentage of to pay back venture-capitalist investors and keep the servers running.

If you look at only a single transaction, the app is much more efficient: Instead of requiring the restaurant to hire a printer and someone to deliver menus to you, you just press a button. But with a paper menu, restaurants have to do that only once, whereas you need to marshal the same amount of energy each time you use the app. By the third or fourth time you order takeout from a particular place, suddenly the paper menu is looking like an ecological marvel.

scandox• 5 years ago

I thought you were going to provide the math(s)? A little disappointed.

diego2• 5 years ago

I'm just quoting her. My point is that she provides no math.

fsociety• 5 years ago

To your point paper production is a wasteful process, I’ve heard figures of 10-20L of freshwater are used per one piece of A4 paper in addition to transportation costs and running a pulp mill. Pulp mills produce waste as well.

The phone has a lot of waste on metals but in a less consumerist world - read don’t upgrade your phone every year - it has the property of reuse for every restaurant and durability compared to a restaurant menu.

Even better you can power your phone with the rays from the sun.

antpls• 5 years ago

How one does explain that the price of Ethereum follows the price of Bitcoin, while both networks are separated, and follow a different roadmap?

georgyo• 5 years ago

Arbitrage.

Many exchanges deal only in crypto currencies, where exchange rates are relative to other coins. Price differences between both coins and exchanges create an ability for someone to make money while equalizing the market.

It also means that all coins are inevitably linked together in some way. And why obvious scam coins also follow same curves.

fighterpilot2• 5 years ago

Arbitrage isn't the fundamental explanation. There's no pure arb relationship between ETH and BTC.

The real reason they're linked is for macro reasons. Hype for ETH is correlated with hype for BTC. Regulatory environment for ETH is correlated to that for BTC.

Statistical arbitraguers then front run the resulting macro flows, but the core reason they're linked is the macro flows, not the arbitrageurs.

shepardrtc• 5 years ago

Market makers. They have to determine a price, but ETH hasn't yet evolved to a point where it operates in its own world, so they lazily (but understandably) follow the price fluctuations of BTC while allowing people to buy or sell within a certain range. Obviously if a huge buy comes in, or a lot of people are buying, they'll let it go up (or down if its the opposite), but once that dies down they'll again follow BTC price swings. However, I expect this to change as cryptocurrencies mature.

fighterpilot2• 5 years ago

Market makers can't force a correlation to exist. They're neither a sufficient or necessary condition for it. They only front run an already existing correlation.

The correlation exists because of non market makers.

vghhfvg• 5 years ago

ETHBTC is up 40% this month. The chart is totally chaotic. ETHUSD (sometimes) goes up after Bitcoin does because people hear about ETH after they hear about bitcoin - most price movements in either pair are due to new money. The prices of all cryptocurrencies also respond together to any regulatory threat.

The weak correlation between ETHUSD and BTCUSD has many obvious explanations.

Most things crypto are suspicious. I don't think there is anything suspicious about the ETHBTC chart.

Edit - This may be informative:

https://en.wikipedia.org/wiki/Beta_(finance)

dehrmann4• 5 years ago

Not sure if this is a nit or not, but NFTs rarely represent ownership of anything other than the NFT. You're not really buying the art, you're buying association with the art. At least if I buy a Jackson Pollock, but the world realizes he's a one-gimmick artist, I can still enjoy the painting. If the world stops caring about NFTs, you're left with "cool story, bro."

saurik2• 5 years ago

Buying these NFTs is more like buying your name on some dedication plaque no one will read unless directed to do so; people do this, sometimes with millions of dollars, because it is, in fact, a "cool story" vs. merely sending an anonymous envelope of cash to the owners of the building (maybe a University or local government).

kibwen2• 5 years ago

It's quite a bit different, since your donation doesn't imply ownership of the plaque (or even of anything built by the donation). The non-fungibility of the plaque is irrelevant because you don't own it, and therefore can't resell it, and therefore can't expect it to appreciate in value, and therefore nothing approaching a pyramid scheme is possible.

Yizahi3• 5 years ago

More like you are buying a unique business card with an address of building where dedication plaque is located. (a .json file with a hyperlink)

Not only it's mostly useless since anyone can print the same address anywhere they want, but also it WILL become literally useless when that address changes.

loup-vaillant2• 5 years ago

Okay, I use NoScript. It's a hassle, but it's an eye opener, so I keep using it. Here, I needed yet again to enable JavaScript to read what ought to be a static, text heavy article.

Nothing new so far. What's interesting however is that instead of the article, I didn't get the usual blank page. Instead, I could read the following quote:

"Appropriate technology" was a movement beginning in the late 1960s that aimed to shift the emphasis from mass technology to smaller-scale, affordable technologies, informed and targeted to local needs and customs. Many of its ideas are as relevant today. So is one of its major shortcomings: why would we rely on technology to mitigate the harm technology does?

Turns out I got redirected to https://reallifemag.com/appropriate-measures/

How ironic. When trying to disable a technology that's quite useless as displaying text (and more often than not is more about tracking me than serving me), I got a lecture on appropriate technology. And a fairly good one at that, which should probably be reflected on by proponents of crypto currencies.

unnouinceput• 5 years ago

I have NoScript too. I, too, had nothing on the screen but instead of enabling the JS for the site I switched to reader mode and boom! the static text heavy article was before my eyes. ¯\_(ツ)_/¯

loup-vaillant2• 5 years ago

Go figure. Personally I'm able to reproduce the issue: with JavaScript on, no problem. Disable it, I'm not redirected yet, but I see the appropriate measure quote. Re-enable it, and I'm redirected to the appropriate measure article.

I still argue that JavaScript is no an appropriate technology to display static text (at least not if we care about screen readers).

cannabis_sam• 5 years ago

Sure, but so is the world economy apparently:

https://www.forbes.com/sites/jeffmcmahon/2019/04/05/the-worl...

jb775• 5 years ago

My Occam's Razor: NFTs are tax avoidance and/or bribe money vehicles that happen to be attracting useful idiots.

They are perfect because:

1) an unlimited number of them can be created quickly and easily

2) "artwork" value is subjective and therefore the value and short term appreciation/depreciation can't be easily questioned

akomtu• 5 years ago

NFTs compete with sketchy charities in this case. Donating to a politician's charity works just as well, except that the charity's funds are difficult to spend later. NFTs solve this problem.

Balgair• 5 years ago

Forgive my ignorance, but NFTs use the same algos as bitcoin, correct? And are the blockchains public, so that you may know who owns the NFT for the physical item? If that is all true, then trying to launder money via an NFT means that law enforcement can access the blockchain and see the whole chain of custody too, right?

I feel that I am missing something key though.

Veen• 5 years ago

Blockchains are public, and everyone can see transactions, but they are tied to an address and not to a person. The person who controls the address can make transactions without revealing who they are. That’s how we know Satoshi owns billions of dollars worth of bitcoins but we don’t know who Satoshi is.

However, if the address is revealed to belong to a person in the real word, they are no longer anonymous and you can see all of their transactions.

cevered• 5 years ago

The more complex our global monetary system seems, the higher the pyramid scheme can go.

astoor• 5 years ago

A successful pyramid scheme has a couple of valuable attributes: "plausible deniability", i.e. the ability to disguise the pyramid scheme to convince as many people as possible that it isn't actually a pyramid scheme, and "self-sustainability", i.e. the ability to keep the scheme going for as long as possible without collapsing.

The article's headline suggests the article is about "plausible deniability". This has indeed been improving over time as the schemes have become more sophisticated. With Bitcoin for example, articipants could say "it's not a pyramid scheme because you can buy a pizza with it", although that was about the extent of it in practical terms (excluding more nebulous claims like "it is going to change the world", "it is the internet of money" etc.). However, with more sophisticated schemes like Ethereum, participants used to say things like "it's not a pyramid scheme because you can run DApps on it", now say things like "it's not a pyramid scheme because you can do DeFi with it", and may in future have something else with which to deny it is a pyramid scheme.

However, the article itself talks specifically about NFTs. These aren't so much about "plausible deniability", but about "self-sustainability". People need to buy Ethereum to buy the NFTs. It is like the ICOs - people needed to buy Ethereum to participate in the ICOs. When the ICOs dried up and the ICO companies started cashing out their Ethereum the prices collapsed, but now we have NFTs to take their place. If NFT sales dry up and NFT sellers cash out the prices may collapse again, but by then there may be something else to take their place and keep the scheme self-sustaining.

mgamache• 5 years ago

NFTs are dodgy as all hell, I will not defend them. But she is politically motivated and her arguments against Bitcoin don't really hold up. A key giveaway is when people attack crypto for it's 'libertarian' nature. Like other far left people she knows crypto is a threat to state currencies. Without state control of the money it makes redistribution of wealth more difficult. These people often believe in MMT (Modern Monetary Theory). They hand-wave away inflation. This text is rife with Russell Conjugations and should not be taken seriously as a critique of Bitcoin. There are legitimate critiques of BTC of course, but not here.

Yes, this is the author who wrote 'In Defense Of Looting'.

noxer2• 5 years ago

Miss leading title. This is about NFTs and not about crypto or a pyramid scheme thereof.

noah89• 5 years ago

It is not that complex actually, you just have to learn more about it and read a lot of information on the internet. Right now cryptocurrencies might not be that popular but in the future I am sure that they will replace regular currencies, but for now people don't really trust the technology. Many years ago when credit cards came out, the majority of people didn't trust the technology and preferred using cash, I still know some people who are like that. So invest in it now before it's too late.

The more complex crypto seems, the higher the pyramid schemes can go

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