The entire crypto ecosystem is a ponzi

https://www.coppolacomment.com/2022/11/the-entire-crypto-ecosystem-is-ponzi.html

by ghuntley • 4 years ago

190 188 4 years ago

coppolacomment.com

cuteboy192• 4 years ago

Crypto recreates everything Bitcoin was supposed to prevent.

1. Tether: infinite money printer central bank

2. Exchanges: banks

3. Binance: too big to fail

4. BSC shitcoins: fully centralized currency

armored99• 4 years ago

this.

tradertef2• 4 years ago

Yes. Also Bitcon =/= Crypto.

cuteboy192• 4 years ago

But tether is propping up btc. Most large btc holders desperately want tether to hold together

jbverschoor• 4 years ago

Good thing we can just convert, and hold our own bitcoins

kybernetikos2• 4 years ago

I'm not sure what else you'd expect. Those things are caused by humans taking advantage of whatever system of value transfer exists, of course people will do the best they can to reinvent these things on top of new value systems.

On the other hand, unlike the actual infinite money printer central bank, nobody forces you to use obvious scams like tether. You don't need to use a centralised exchange because smart contracts make it possible to use decentralised exchanges. Smart contracts allow you to do things on a small scale that would have required enormous institutions in the past. The ability for any individual to create their own tokens obviously allows institutions to do it too.

Since cryptocurrencies are more powerful than previous systems, it shouldn't be surprising that they support a superset of the scams that previously ran.

They also support an unprecedented level of programmability, default to open api access, a new spectrum of choices for trust, the ability to run transactions across financial products from different providers, faster settlement, are based on actually modern methods of cryptography (unlike bank accounts), and have injected a massive amount of energy into some extremely interesting zero knowledge cryptography.

It's actually pretty surprising to me that the majority of 'hackers' on 'hackernews' don't seem more excited about the ability to create programmable tokens of their own.

moistly• 4 years ago

Those things are caused by humans taking advantage of whatever system of value transfer exists, of course people will do the best they can to reinvent these things on top of new value systems.

It would be nice if at least one person would leapfrog all this 1850s US Frontier West banking history, which was dominated by frauds and theft, and offer us a system working under modern reforms: Glass–Steagall Act, Sarbanes–Oxley, similar rules-that-make-it-work from Europe. Best practices.

throwup• 4 years ago

As a bitcoin holder, I have to agree. Much if not all of the crypto ecosystem is a ponzi.

glennvtx• 4 years ago

This is a terrible argument, and clickbait. Obvious enough to anyone who actually understands how bitcoin, or eth work, it does not fit the definition of a ponzi scheme. Most tech stocks fit the definition better. Just because a few centralized banks, (FTX, centralized crypto exchanges are banks) have failed, means nothing, since the original idea of cryptocurrency was to do away with centralized institutions like this.

_uhtu• 4 years ago

If the idea was to do away with the centralized institutions but overwhelmingly people use centralized institutions which frequently act like ponzi schemes, perhaps the "idea" no longer matters and the actual real-world situations matter more.

ohgodplsno2• 4 years ago

Classic crypto-enthusiast denial.

Your dreamt of, decentralized system that was imagined by Satoshi is gone. It will either never exist anymore and be gangrened by said centralized exchanges (which are the only things that are artificially prop up the value of your coins), or it will go back to the days where you can pay 10 000 BTC for a pizza because someone decided it would be fun. ETH would be worthless without exchanges (because its current value is only propped up by "what bullshit can I sell that mimics real world services but without any legal repercussions when I commit fraud and exchange it for cash, disappearing in the Bahamas in the process?"), doge would be worthless, USDT would be worthless, etc.

A system that has no real world value will not exchange anything, unless scammers like Binance and FTX come in to sell get-rich-quick dreams to suckers and artificially bring in money and "volume". When 99% of your volume is just big traders sending money to one another and keeping the price high (because it makes cryptobros feel good when they see their big number go bigger), you don't have an economy, you have at best a really shit game of Monopoly.

rosnd6• 4 years ago

Your dreamt of, decentralized system that was imagined by Satoshi is gone

What do you mean? There are tons of decentralized exchanges I can use to acquire cryptocurrency to buy drugs with.

yieldcrv2• 4 years ago

I don't get the impression that you two are talking about that same thing, like, you didn't really give a rebuttal to what they said, how do you feel what you wrote is related?

the best I can tell is that you are saying that centralized institutions having extremely large influence is necessary? in which case I would disagree

chinathrow• 4 years ago

If regular banks would fail with the same rate Crypto venues fail, then you might have a point.

lrvick4• 4 years ago

Early banks failed all the time. Give it another decade or so for regulation to start mandating accountability.

onethought3• 4 years ago

I mean communism looks pretty cool on paper too, the actual idea. But we seem to have had a real hard time implementing it. Could crypto be like that?

lrvick4• 4 years ago

Except crypto actually works for its intended use cases. I use it constantly.

Maybe it works poorly for traders but those of us actually using cryptoassets for privacy, inflation resistance, and censorship resistance ignore the scams and traders. Scams and traders dominate the conversation of most new technology. Same things happen in traditional markets.

Cults of personality and false promises by corporations inflate stock prices all the time. Takes a while to find the real price sometimes.

hotcoffeebear• 4 years ago

Capitalism looks bad on paper and we are having hellish landscape in it and pretend it’s working.

Cryptocurrencies current landscape is just same as the current financial system indeed. Cypherpunk ideals are long gone.

bawolff2• 4 years ago

Tbf, we dont have that many examples of people trying. Communism sucked in russia, but its not like they are that much better under capitalism.

bb8811• 4 years ago

Proclaiming that your intellectual opponents are ignorant without pointing out where they're wrong is a pretty common response from bitcoin maximalists these days.

rosnd6• 4 years ago

Did you reply to the wrong comment?

Obvious enough to anyone who actually understands how bitcoin, or eth work, it does not fit the definition of a ponzi scheme.

This is indeed obvious to anyone who knows what both of those things are. He very clearly explained where they got it wrong.

sMarsIntruder2• 4 years ago

A part from the fact the he cited eth, that makes him not Bitcoin maximalist: he’s right. Also because the arguments are always the same and in this same thread we have one of the most voted comments saying that the idea behind Bitcoin is “stupid”. Just that. But it’s fine since we’re in HN, isn’t it?

cornholio6• 4 years ago

The burden of proof is on the crypto promoters to demonstrate ability to create wealth. This was not the case up to now, the only thing crypto produced were speculative assets that have very little legitimate uses.

For example, major cryptocurrencies like Bitcoin aim to replace state issued fiat currencies with privately issued currencies that have limited/fixed supply and no connection to the real economy. That's insanely stupid and detrimental. They also aim to preserve privacy when teleporting billions across continents - a dangerous and anti-social feature no society needs.

The vast majority of ICOs and DeFi projects are just a way to do regulatory arbitrage - issue unregulated or lightly regulated securities that are excelent for speculation, but have close to non-existent real world utility. The same for NFTs, completely fictional wealth creation that was powered solely by the speculative search for greater fools.

The field as a whole, despite probably hundreds of billions in real wealth dumped into it by now, produces close to zero value for society, or even negative if we consider the impact of resource burn and facilitation of money laundry. It has spiraled into a pure speculative mania that destroys the lives of many retail investors: https://twitter.com/coinfessions

rosnd6• 4 years ago

This was not the case up to now, the only thing crypto produced were speculative assets that have very little legitimate uses.

You're being straight up dishonest. Darknet Markets have been operating for over a decade now, they obviously have tons of legitimate uses and have created a plenty of wealth.

everfree7• 4 years ago

The burden of proof is on the crypto promoters to demonstrate ability to create wealth.

For crypto to be financially successful, strictly speaking it doesn't need to create wealth, it only needs to attract it.

Plenty of profitable businesses are arguably a net negative to society - tobacco, gambling, private prisons, ad agencies, data brokers - but that doesn't make them ponzi schemes.

nikanj• 4 years ago

Most people buy cryptos to become rich. The only way that happens is more fiat entering the crypto space, providing exit liquidity.

Most tech stocks have a plausible explanation for future revenues, other than "the next investor will buy your chips for a higher price"

kordlessagain• 4 years ago

An ecosystem is a centralized entity. Sure, Bitcoin is useful when used in a decentralized manner. However, when it becomes consolidated in an exchange or other controlling entity, the risk associated to those values will move out of line with the common consensus. For example, there are whales that move the crypto markets in wide swings to their advantage, and those centralized controls risk everything (increase risk of loss) that has gone into building the technology and applications for using it.

At the end of the day, crypto is likely only useful for one thing and that is an exchange of value and identity for AI/ML applications. Just like Splunk was search for machine data, crypto is payments for machine entities. Until that becomes a reality, the markets are just speculative and uninteresting. Ethereum especially, given no real thing occurs on that chain other than bad code and hacks that lose "investors" millions.

Lightning has been the best thing that has happened to crypto in a long time and the reason why is because it can scale Bitcoin to the numbers we need for large amounts of transactions between machine entities...

CoinDesk reports: Just over 51%, or 24.6 million addresses of the total 47.9 million, are below purchase price on their investments, according to data provided by blockchain analytics firm IntoTheBlock. About 45% are in the money, which means they are boasting unrealized gains, while the rest are roughly at break-even.

JumpCrisscross6• 4 years ago

an ecosystem is a centralized entity

This is the opposite of the canonical ecosystem [1].

[1] https://en.m.wikipedia.org/wiki/Ecosystem

mym19902• 4 years ago

How convenient that this is obvious enough to only the people who understand how this relatively complex technology works, but not to bystanders. The fact that you think stocks are closer to a ponzi scheme just invalidates the rest of your post even further.

lamontcg2• 4 years ago

Most tech stocks fit the definition better.

The fact that the stock market has almost forgotten about dividends and bubble mechanics have taken over the tech sector isn't a real counter example. That is also bad.

everfree7• 4 years ago

If that is also bad, then why don't we see more news pieces about how tech stocks are a ponzi?

monero-xmr14• 4 years ago

Cryptocurrency in its purest is money not issued or controlled by a government. Instead the supply inflation is controlled by transparent rules that are plain to see. “Protocol-based finance” vs. the existing government-based finance.

Now there are all manner of divergences from the above paragraph. Coins that are totally controlled and issued by a small group or company. Black box rules rather than transparent.

There are also huge trade offs with not having a central entity - lose your private key and lose your money for example.

Does this make the entire industry a Ponzi? No. There are legitimate uses for crypto, and even if I listed a whole bunch here the HN skeptics would disagree, but certainly buying drugs online is a real use case, which crypto excels at. You may say that’s morally wrong but it is still a use case, for better or worse.

JumpCrisscross6• 4 years ago

Does this make the entire industry a Ponzi?

No, the things you mentioned don’t. The argument the article made, that almost all the dollars and euros and yen crypto spits out come from investment, does.

That some people are buying drugs and financing terrorism or Pyongyang dilutes the Ponzi case. Those are examples of utility. But I’m not sure that’s the defence crypto was looking for.

monero-xmr14• 4 years ago

Stablecoins such as USDC and Tether (although despised by many) are used for non-criminal cross border transfers and savings accounts. Here is a recent episode of EconTalk that explains the use case in Argentina https://podcasts.apple.com/us/podcast/econtalk/id135066958?i...

Trasmatta3• 4 years ago

Crypto doesn't even excel at buying drugs online. The fact that it's a permanent ledger of transactions means the purchase could be trivially linked to you by law enforcement, unless you jumped through all the necessary hoops to also anonymize it. Which most people don't.

monero-xmr14• 4 years ago

Have you looked into monero? https://getmonero.org/

jeremyjh6• 4 years ago

This is why I invested in Monero years ago, when it was under a dollar. I concluded that since the only actual application of crypto up to that time was selling illegal goods and services on black markets like silk road, that it was really the only coin that made sense at the time (I'm sure others replicated it). AFAIK it is still considered untraceable, but the value peeked years ago around $400 IIRC. I made some decent money on it though and still HODL some.

everfree7• 4 years ago

unless you jumped through all the necessary hoops to also anonymize it

There's a single hoop, and it's Monero.

It always confuses me when people say that crypto doesn't excel at buying drugs online. Out of all the things crypto does and does not do well, that one shouldn't be in dispute.

jeremyjh6• 4 years ago

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.

bbbbb5• 4 years ago

Cryptocurrency can easily be exchanged for a whole lot of goods and services.

monero-xmr14• 4 years ago

If your definition of money = using something for goods and services, the crypto has certainly exceeded that definition.

TrianguloY• 4 years ago

If something only has value because you think you can sell it to the next sucker for more, it is a ponzi scheme.

Careful with that sentence. It is applicable to paintings, stamps, and collecting in general. True that on those other cases you have a physical object, so it has a value (as opposed to nft) but usually it's far less. A Pokemon card costs almost nothing, but some people are willing to pay millions for it, so it "costs" millions.

Disclaimer: I still agree with your comment, I just think that the reason is more complex than that sentence.

koonsolo7• 4 years ago

Here is a valid use-case for crypto (Monero): https://news.ycombinator.com/item?id=31996612

NaturalPhallacy• 4 years ago

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.

everfree7• 4 years ago

If something only has value because you think you can sell it to the next sucker for more, it is a ponzi scheme.

That's not what a ponzi scheme is.

In a ponzi scheme, there is a fictitious business model that's purported to be turning a profit, and its lack of profit is hidden by secretly using new inflows to pay off old investors.

In crypto, none of that is hidden. It's widely known that dollars cashed out by earlier investors come from the coffers of later investors. Since e.g. Bitcoin doesn't deceive people about being a profitable company, it's by definition not a ponzi scheme.

Edit: This is a discussion section. If you disagree with my comment, let's respectfully discuss it. I see a lot of voting and no replying.

safetybox• 4 years ago

Since clearly you can buy things for Bitcoin, it is money.

You can speculate on the value of any currency. I’ve earned thousands extra this year by invoicing foreign currencies at the right time, at no loss of my customers.

Bitcoin only has value for me because of the things I can buy with Bitcoin. (Privacy preserving technology, online services, drugs, helping friends of friends get out of Ukraine.)

rvz• 4 years ago

It isn't money.

And it is somehow 'money' only when it suits projects and places like HN. [0] I'm sure any of you would immediately rush to sell 299 Ethereum right now, even if it ran through a Tornado.cash mixer, otherwise you would leave it alone if you believe that it isn't money or worth anything.

If something only has value because you think you can sell it to the next sucker for more, it is a ponzi scheme.

That is not what a ponzi scheme is.

[0] https://news.ycombinator.com/item?id=32923693

atoav• 4 years ago

Your username makes you wanna add a disclaimer here? Your judgment might be coloured by your own involvement in crypto.

If anything a bigger part of the chaos in the cryptocurrency-space comes from people who want to believe.

dandanua• 4 years ago

buying drugs online is a real use case

It's a use case that doesn't solve the problem with trust. Parties have to trust each other or use escrow. So, it solves only the "government control" problem.

But I agree, crypto is not just a Ponzi scheme. It's an enormous investment into the world of criminals - individuals and organizations.

carewell4• 4 years ago

Splitting hairs could be a reasonable expectation but at this point right after the FTX debacle it's not warranted.

Any sufficiently complex system can have minor benefits while overall be considered extremely harmful. Cancer can make you lose weight. Nazi Germany built great highways.

cm2773• 4 years ago

I used to agree with you; but I think this line of thinking takes a (core) feature of money (trust in its value) and reduces the whole thing down to just it. Fiat money has another core feature in its definition: that you can pay taxes to a government using that currency. Similarly, equity in a company comes with dividends: a core cashflow that you can predict based on P&L. Trust in their current (and most importantly future) value, is a (big) aspect of it, but not the only one: there's actually a predictable "base" value that you can use to calculate a floor to that value. The future value is just the ceiling to that prediction.

Crypto is only trust. Without that social trust, there's no minimum value. That doesn't mean there is no value, just that the floor can go away, that the entire thing is much more volatile. So basically, gambling. This is not a value judgement btw, gambling and volatile assets can be fun and profitable; they are just not currencies.

monero-xmr14• 4 years ago

The counterpoint to the “fiat mindset” (not to criticize you, but how I categorize it) is gold. There is no reason why gold is valued so highly other than historical and traditional reasons - its industrial utility is far lower than its monetized value.

IMO Bitcoin is superior to gold in nearly every single aspect. The only thing it doesn’t have is 5000 years of human belief in its worth.

If you understand logically why gold in 2022 has a monetary premium above its industrial value, then you can logically reason about Bitcoin and its value.

If you accept that Bitcoin has long term utility and value, then it isn’t a stretch to start analyzing other coins on similar valuation heuristics.

newbieuser• 4 years ago

This is of course far too good to be true. But no doubt some suckers will believe it and hand over their dollar stablecoins. And that is exactly what the platform wants.

summary of all crypto exchanges

cryptoole• 4 years ago

As a lay person who hasn't followed cryptocurrencies since Bitcoin was invented, could someone help correct my understanding of how modern ones work?

It seems like owning a crypto token in a blockchain is conceptually the same as owning a share in a company. You purchase or mine a voting stake in that blockchain, correct? And the process by which new tokens can be minted is laid out ahead of time, like a gradual continuous stock split.

Are there fundamental differences that I'm missing, or has the genius of crypto been to put enough window dressing around the idea to avoid being regulated as a stock market or traditional corporate entity?

kristianpaul• 4 years ago

I need to stop using my ssh crypto then

Taniwha• 4 years ago

So long as you don't take any more bits out of it than you put in you'll be OK

natas• 4 years ago

There were times when people believed the earth was flat, and astronomers were called heretics.

boole1854• 4 years ago

For anyone familiar with actual rates of returns of real businesses, the fact that "Binance offers yields in excess of 65%" is enormously damning.

orangussyy• 4 years ago

This reads as written from someone who doesn’t understand the technologies they are trying to describe. Poor journalist.

carewell4• 4 years ago

Ah! Did they forget to mention that blockchain is a glorified linked list?

civilized• 4 years ago

More of a massively multiplayer online pump-and-dump if you ask me.

The widespread deception about FDIC insurance is really horrifying.

jtchang• 4 years ago

For stable funding, what you really need is retail deposits

I would disagree. For stable funding what you need is the belief that the underlying currency will continue to have value. The fact that BTC hasn't gone to zero means there are some people who still believe it has value.

stephc_int134• 4 years ago

The success of crypto is very strange/alien to me.

The scam seems so obvious, and yet it "works".

I guess that I tend to underestimate how many people love gambling with money and/or are attracted to get-rich-quick schemes.

There is seemingly also a small fraction of true believers, idealists and evangelists who seem convinced that all of this could replace both states and banks without ending up much worse.

bb8811• 4 years ago

Madoff is the ultimate example of a ponzi scheme done well.

1. The "mark" trades his dollars for something he/she thinks is of value, in Madoff's case it was a balance in the Madoff fund.

2. The fund increases the "balance" for the marks, making them think their money is actually increasing in value. This discourages people from wanting their money back. Meanwhile the actual dollars is squirrelled away to some series of numbered accounts.

3. The ponzi scheme is only exposed when there's a run, which happened to Madoff in 2008 during the financial crisis.

bmitc• 4 years ago

I think it's similar to the CDOs used in the housing crisis. You take something of little to no value, wrap it up with all sorts of complexity but then present it as this simple thing you can buy and trade that supposedly has value. People lap it up without understanding the underlying value, which is effectively none. Bitcoin takes up energy to be born. Thus, a bitcoin starts life with negative value. It only attains "value" by someone willing to exchange normal currencies for it. Then it increases in value when someone else pays more. But there is no backing value. Yes, fiat currencies no longer have a gold standard, but there is a ton of value backing the fiat currencies. The dollar is backed in value by the U.S. economy. Bitcoin and other cryptocurrencies are entirely ephemeral. I think I saw someone relate them to the Beanie Baby crazy. At least at the end of that craze, you had a Beanie Baby left, as opposed to ones and zeroes on a hard drive with cryptocurrencies.

There is seemingly also a small fraction of true believers, idealists and evangelists who seem convinced that all of this could replace both states and banks without ending up much worse.

I think a lot of that culture comes from staunch libertarian ideals and also the "free software" crowds, such as GPL enthusiasts. It just is not how human society works and will never work. I saw it in a thread in regarding a commonly used software library that has a GPL license. The author of the package said they would never consider any other license, even while the other thread posters were requesting a license that would allow them to use it in proprietary code but actually pay for that use. People were essentially stating that no one, other than hobbyists, will ever use the package because they can't in their jobs and companies but that they would be willing to pay for a non-GPL license, and the authors staunchly stood behind their ideals. Thus, no one uses it.

I feel cryptocurrencies are very similar. Taking a hardline approach to the decentralization means it will never be incorporated into anything other than hobbyist and enthusiast use.

koonsolo7• 4 years ago

It always surprises me how a tech/startup oriented forum like HN is so negative towards crypto.

I think it's insane that someone invented an algorithm to transfer value over the internet, without the involvement of a central party. Basically as soon as it has a tiny bit of value, you can transfer it, and so it has value.

It goes so far that you could store the private key in your head, and therefore use your head as basically a bank account, only accessible to you.

Plus, if you're living in Hong Kong and want to get paid for something the government thinks is illegal, you can always get paid in Monero, like this guy: https://news.ycombinator.com/item?id=31996612

Ok, you want to focus on all the scams and get-rich-quick schemes. It's more than that you know.

stephc_int134• 4 years ago

Is it though?

I am pretty sure that building an anonymous payment system for illegal trades is possible without crypto.

I have not seen a legitimate use of crypto yet. Not even once.

XajniN• 4 years ago

It always surprises me how a tech/startup oriented forum like HN is so negative towards crypto.

Maybe because people here are more likely to understand it?

Edit: added a missing quote

tasuki2• 4 years ago

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?

stephc_int134• 4 years ago

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.

cedivad• 4 years ago

This 50 minutes-old post with 145 points has been nuked from the first page. And the second, and the third. lol.

yesimahuman• 4 years ago

I noticed that. What do you think the reason is for that? Protecting YC-invested crypto companies? It’s very unfortunate because it was a well written recap of recent events.

shagie2• 4 years ago

What do you think the reason is for that?
> This 50 minutes-old post with 145 points has been nuked from the first page.

---

https://news.ycombinator.com/item?id=16020089

dang on Dec 28, 2017
...
We tend to call it the 'overheated discussion detector' these days, since it detects more than flamewars. However, that phrase is more awkward to say than 'flamewar detector'. If anyone can come up with a better name I'd love to hear it.
Turning that software off is not an option, because HN would be overwhelmingly more dominated by flamewars if we did so. It's not primarily the individual threads that I fear, it's the systemic effects of having them be more dominant. HN exists most of all for the quieter, deeper, more out-of-the-way finds that would be the first to get excluded under such a regime. That would really be an existential risk to HN.

---

This post got too much attention, too quickly, with too many votes and comments. Just look at all of the flagged, dead, green name, comments that have gotten significant downvotes too.

The moderation work needed to maintain the site if this isn't down ranked is in excess of the amount of value that the post brings to the site.

pelasaco• 4 years ago

The dream is over. How we came from Satoshi to here is just one more example of how our civilization is weird. In one hand we create great technologies and at the same time, we have already people working to complete destroy it.

dj_mc_merlin• 4 years ago

Excuse my financial ignorance but.. shouldn't it be immediately illegal to claim "46% risk-free return"? That is impossible. Asking people to give you money to do something that is clearly impossible (make a shitton of money sustainably from.. nothing?) is just fraud. Why can't they just get sued as soon as they put a website up that is inciting people to send them money under false pretenses?

tarkin2• 4 years ago

There is, at least, some demand for crypto that relates to real-world economics.

It's an excellent intermediary currency. People use it successfully in hyper-inflationary countries and people use it to bypass currency transfer difficulties. These are definite and real use-cases.

The rest of the demand looks like pure and simple speculation based on faith that the other various claimed uses will come good, i.e. a ponzi.

It's not a complete ponzi, but I'd say about 80% of it is.

TacticalCoder• 4 years ago

The entire crypto ecosystem is a ponzi

That remains to be seen (for example I'm crossing fingers Brian Armstrong, the CEO of Coinbase, which is an HN unicorn, ain't at the head of a ponzi) but meanwhile something is certain: SBF was running a Ponzi (guaranteeing insane returns using previous investors and people's money: yup, that's a plain ponzi).

And he was lying in nearly every single of his tweet, up to a few days before the downfall when he was tweeting that everything was fine. Or when he was saying the money was FDIC insured. Deleted the tweets? Too bad, people have copies of that.

To me it seems like quite some people are pushing this "every crypto is a ponzi" now that their poster ponzi boy got caught with the hand in the cookie jar.

But I'm not sure they'll succeed.

I think there could be a future where, just as energy and commodities are still a thing after the Enron ponzi, Bitcoin may still exist after FTX/Alameda ponzi.

bb8811• 4 years ago

Coinbase's stock value is down 86% in the past year.

BTC lost more money this year than people did by just holding cash even at 7% inflation.

Tether was banned by NY State from operating there, and also may be actually insolvent.

FTX went belly up due to a ponzi. QuadrigaCX did the same thing before it.

Rug pulls are common in the NFT world.

Smart contracts are written to be too smart for normal investor people to follow them. Or not smart enough to keep hackers from manipulating them.

kevmo• 4 years ago

How many crypto startups has y ombinator funded?

tim333• 4 years ago

...crypto are every bit as dependent on a constant supply of greater fools.

But it isn't really. The crypto market goes in approx four year cycles and the number of greater fools goes up and down but things like bitcoin don't cease to exist, they just go up and down in price.

unabomber• 4 years ago

As capitalism is

tempera• 4 years ago

Well this is the Matrix level attack on Bitcoin. Conflate it with all the crypto Ponzi out there.

Rendering the mind of the regular normie incapacitated, unable to ascertain what is true and what is false.

rvalue• 4 years ago

But the entire banking system based on fractional reserve banking is a ponzi scheme. No?

imachine1980_• 4 years ago

short answer not. banks in fractional reserves make money for the commission of lending,if your account get more interest this year this means they also lend to more interest. yes isn't 100 but chase bank and citi bank is here for 200 YEARS. short answer no it isn't, i don't like the banking system but that doesn't mean is pyramid scheme.

does crypto is inescapable pyramid scheme, no. even when the landscape is full of scam it doesn't mean that stripe or bitwage or usdt who pay you in crypto to easy international transfer process, they make small cut in the transaction like any other transfers company, for the contrast the number of companies whose only proposition ins the pump and dump the value of their virtual games from shinucrypto to literal ponzi scheme like bitconect. i wish you understand what i say, i will clarify what i say if you need, English inst my first langues

The entire crypto ecosystem is a ponzi

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