https://unherd.com/thepost/is-crypto-just-one-big-ponzi-scheme/
This article ignores other potential benefits to crypto (that is, beyond a possible rise in price) and also ignores precious metals, which like crypto offer no interest payments or dividends but have other benefits. The article also ignores some of the possible RISKS of crypto (e.g., that the alleged security and privacy might be illusions, outright theft by an exchange, loss of a wallet or a password, etc). Metals also have risks (theft of physical metal for instance, including government confiscation, plus the added risk if one uses a third party to hold the metal).
There is nothing in life without risk; assessing risk and choosing which ones to take on are among the more important life skills.
Defining whether or not something is — or has become — a Ponzi scheme has been long forgotten; it involves working out if an investment’s underlying structure creates a negative-sum game. With regulated securities, such as stocks and bonds, investors receive a combination of interest payments, dividends, and cash flows, making these, at the very least, a zero-sum endeavour. With crypto, however, investors receive none of these, only benefiting from a potential rise in price — the so-called greater fool theory.
This disparity, among other things, has led many financial commentators to describe even the number one crypto, Bitcoin, as a negative-sum Ponzi scheme (one FT story suggested it was even ‘worse’ than that). If Bitcoin’s ecosystem collapses, funds can’t be returned to holders because its price going to zero means there’s nothing to recover. But with a Ponzi scheme, funds can be recovered and returned to investors. Following the collapse of the infamous Madoff Ponzi scheme, 14 out of 20 billion dollars initially invested have been recovered from offshore accounts.
For now, Bitcoin’s Ponzi status is irrelevant. Bankman-Fried has simply joined the increasing list of crypto’s nobility who’ve accidentally gloated about profiting from dubious financial structures. Mike Novogratz, CEO of Galaxy Investment Partners, infamously likened Bitcoin to a pyramid scheme, despite how his company’s primary function is cryptocurrency investments. Meanwhile, outlets in the crypto media have also embraced Ponzinomics, like CoinDesk publishing an article with a lede reading: “Yes, it’s a Ponzi scheme. But who cares?”
I'd like to know how bitcoin is a ponzi scheme. That Satoshi Nakamoto must be the most patient rug puller in all of human history. You guys can't generalize crypto because not all are created equal. Doge bullshit is just that, bullshit.
I don't understand where this ponzi scheme sentiment comes from. Why has Satoshi not sold anyrhing? Why has he not stolen anything? Why has he not suddenly just stopped everything? It makes no sense.
How is something like loopring a ponzi scheme? Being able to create a stock market where you actually own the shares instead of an IOU is not a bad thing. It takes power away from the hedge funds, SEC, and the power players on Wall Street. How about ownership of licenses, permits, certificates, and other official documents? They can no longer be faked or stolen because the real one is locked and owned by you. Where's the possibility scheme?
Do not look at crypto as a whole like this article talks about and look at individual projects. There are ponzi schemes in the car industry, so should we not buy cars?
Just look at the replies in this thread. As usual the naysayers have no real arguments and are not able to analyze decentralized crypto in depth. They have no real understanding of this new and powerful technology.
Just the fact that the the ENTIRE financial industry blocked donations to Wikileaks years ago and Wikileaks was able to survive thanks to Bitcoin donations, should tell people how amazing Bitcoin is. It's decentralized and unstoppable. Big power players can only spread FUD to negatively affect Bitcoin. And still people believe this cRypTo is a PoNzi ScHemE nonsense.
Most of these people don't even understand that there's billions of people in the world that don't have access to banking services or that have limited access to banking services. This is why a large portion of the Kenyan economy is now run on the Mpesa CALLING MINUTE exchange system. People pay eachother with mobile payments by exchaning the calling minutes they have on their mobile phone plan.
It's very obvious to anyone who has done some research into crypto that it absolutely is here to stay and holds great promise. With crypto anyone in the world can have access to banking services on their phone. But some spoiled Westerners just keep yelling it's a ponzi....
Munger types
You guys get all worked up over "decentralized" and forget that 900 people own over half of all the bitcoin in existence. It might be the most centralized currency out there.
You get all worked up over safe and anonymous. It is neither. Every transaction is traced and recorded. Hacks for billions happen regularly. Basically when ever they want to.
And its digital. If the internet goes down your money doesnt exist. If the power goes down, your money doesnt exist.
Crypto is none of the things it was hailed and propped up for.
How many people own all the gold?
Every country owns a large portion. Its actually distributed pretty well among all civilized countries. Gold is the most decentralized of any form of currency.
What's this argument that if the power goes out, you lose your money? Where the hell did you hear that? The whole point of a decentralized blockchain is to preserve data forever, since you would have to delete every copy in existence and good luck doing that when there are tens of thousands of computers all over the world all simultaneously working to prevent it.
At most, you would temporarily lose connectivity, but your funds will always exist and be accessible as long as you have your private key.
Please stop with the power outage FUD.
How are you going to use your digital phony money when the power is out? Or when the internet is out? Or both?
Say the power is out for several days, youre in line for your ration of gas at the local gas station. Its your turn and you ask the attendant if they'll take an IOU on your digital money? You'll get laughed out of every store in existence.
Want to trade or barter for goods? Imagine trying to trade a bitcoin during a crisis for some food. Lmao, they'll tell you to beat it.
Patient? How many hundreds of billions did the chinese make from bitcoin and from the sale of bitcoin mining equipment?
What does that ha e to do with Nakamoto and what does that have to do with rug pulling?
Why would they pull the rug when they are still making billions upon billions? When the scam is near the end they'll dump their coins and probably have made several trillion start to finish.
Cracks me up when people downvote but dont respond.Just take the L with dignity.
The only way he could "pull the rug" would be to sell his whole stash. That's about 5% of the total supply. So let's find out what would happen if he did, obviously that would create a temporary massive dip in the fiat exchange rate, if he sold everything.
But the rate would not go below $0, heck not even below $10 as there are always people waiting down there to scope up very cheap in the even a whale would sell. Also, after such a massive dip people would instantly rush to buy in, despite limited supply.
It's only 1M BTC, if sold for a few dollars that's just a few million dollars, which ain't much profit for him.
Then there's the question, what would he sell to, any fiat currency would expose him to the government who is looking for him, it would also allow the government to seize all his fiat currency, and the tax would be insane. Why anyone would wanna do that is beyond mystery.
Fine if he takes out small portions every now and then to buy himself nice things without attracting too much attention, that wouldn't affect the exchange rate and wouldn't harm anyone. I guess that's the closest thing to a rug pull we're ever gonna see.
The whole world would be alerted the second any of Satoshi's coins move, even if its just a little bit. His addresses are public and there are whalebots on twitter that monitor that sort of thing.
A lot of people believe he's dead, so any of his coins getting sent would be huge.