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?”