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