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Ponzi schemes also only harm those who inflict it on themselves.

by treve 9y ago

ebbv 9y ago
Unless they get so big they affect the economy as a whole.
ceejayoz 9y ago
https://en.wikipedia.org/wiki/Albanian_Civil_War https://en.wikipedia.org/wiki/Albanian_Civil_War > The Albanian Civil War, also known as the Albanian rebellion, Albanian unrest or the Pyramid crisis, was a period of civil disorder in Albania in 1997, sparked by Ponzi scheme failures. The government was toppled and more than 2,000 people were killed. It is considered to be either a rebellion, a civil war, or a rebellion that escalated into a civil war.
- dullgiulio 9y ago
  Until now, Bitcoin is not considered a systemic risk[1], which simply means that /when/ it will crash it won't drag the whole world economy down with it. Lots of people will get burned pretty badly though. Like the saying goes, freezing feet and burning head makes for a good average temperature. [1] https://www.economist.com/news/leaders/21732526-there-investment-case-cryptocurrency-bitcoin-speculative-asset-not-yet https://www.economist.com/news/leaders/21732526-there-invest...
JumpCrisscross 9y ago
> Ponzi schemes also only harm those who inflict it on themselves Ponzi schemers lie to their investors. (Madoff purported to run a reputable shop.) It’s harder to argue, to the broader public, that someone buying Tether with Bitcoin could reasonably think they made a legitimate investment.
- jonknee 9y ago
  A lot of exchanges don't give you the choice and just give you Tether when you sell Bitcoin. What are the odds that a lot of people don't know the difference between USDT and USD?
  - mancerayder 9y ago
    When I first started some time last year, I wasn't sure what "USDT" was but I didn't care terribly because a) it's easier to calculate things mentally versus the BTC worth of a coin which looks like .000003456 which is a nightmare to picture; b) I trusted the exchange. So yeah, I'd absolutely smack the exchanges for passively perpetuating a fraud which has been talked about for months now.
- dragonwriter 9y ago
  > Ponzi schemers lie to their investors If USDT is not 1:1 backed by USD, so does Tether. If Tether and Bitfinex are different faces of the same group, and Bitfinex treats USDT and USD equivalently on their exchange relying on Tether’s backing claim as justification, so does Bitfinex.
- gruez 9y ago
  >Ponzi schemers lie to their investors. is that all of them, or most of them? because there are ponzi schemes that openly state what they are.
- treve 9y ago
  There are plenty of examples of cryptocurrency related scams that present themselves as a legitimate investment. Aside from that, I think an argument could be made that bitcoin itself is a form of pyramid scheme. I'm not sure if I 100% agree with that, but I understand the line of reasoning. I'm glad regulators are looking into this and asking these questions.
- notahacker 9y ago
  Think it's probably easier to argue to the public that this thing which the company said was a convenient digital way of converting other digital assets to dollars but lied about the dollars suckered innocent people than most bog-standard "we've found a totally legitimate way of earning 100% weekly returns but we're really struggling to get the finance for it so we'll even pay your referral bonuses on top for promoting it" Ponzi scams.
Asparagirl 9y ago
No. Go do some reading on all the charities and hospitals that were hit very hard by the Madoff ponzi scheme imploding. They had to give up millions that their invested-with-Madoff-and-Madoff-feeder-funds rich donors had promised them, donations they had been relying on and been planning their budgets around. Worse still, in a ponzi scheme there can be clawbacks of money you “made” before and already spent, not just loss of the existing money that goes poof. EDIT: Or, if you’re a sports fan, consider the impact on the New York Mets and their budget over the last decade.

Ponzi schemes also only harm those who inflict it on themselves.

by treve 9y ago

Ponzi schemes also only harm those who inflict it on themselves.

ebbv 9y ago

Unless they get so big they affect the economy as a whole.

ceejayoz 9y ago

https://en.wikipedia.org/wiki/Albanian_Civil_War https://en.wikipedia.org/wiki/Albanian_Civil_War > The Albanian Civil War, also known as the Albanian rebellion, Albanian unrest or the Pyramid crisis, was a period of civil disorder in Albania in 1997, sparked by Ponzi scheme failures. The government was toppled and more than 2,000 people were killed. It is considered to be either a rebellion, a civil war, or a rebellion that escalated into a civil war.

dullgiulio 9y ago
Until now, Bitcoin is not considered a systemic risk[1], which simply means that /when/ it will crash it won't drag the whole world economy down with it. Lots of people will get burned pretty badly though. Like the saying goes, freezing feet and burning head makes for a good average temperature. [1] https://www.economist.com/news/leaders/21732526-there-investment-case-cryptocurrency-bitcoin-speculative-asset-not-yet https://www.economist.com/news/leaders/21732526-there-invest...

JumpCrisscross 9y ago

> Ponzi schemes also only harm those who inflict it on themselves Ponzi schemers lie to their investors. (Madoff purported to run a reputable shop.) It’s harder to argue, to the broader public, that someone buying Tether with Bitcoin could reasonably think they made a legitimate investment.

jonknee 9y ago
A lot of exchanges don't give you the choice and just give you Tether when you sell Bitcoin. What are the odds that a lot of people don't know the difference between USDT and USD?
- mancerayder 9y ago
  When I first started some time last year, I wasn't sure what "USDT" was but I didn't care terribly because a) it's easier to calculate things mentally versus the BTC worth of a coin which looks like .000003456 which is a nightmare to picture; b) I trusted the exchange. So yeah, I'd absolutely smack the exchanges for passively perpetuating a fraud which has been talked about for months now.
dragonwriter 9y ago
> Ponzi schemers lie to their investors If USDT is not 1:1 backed by USD, so does Tether. If Tether and Bitfinex are different faces of the same group, and Bitfinex treats USDT and USD equivalently on their exchange relying on Tether’s backing claim as justification, so does Bitfinex.
gruez 9y ago
>Ponzi schemers lie to their investors. is that all of them, or most of them? because there are ponzi schemes that openly state what they are.
treve 9y ago
There are plenty of examples of cryptocurrency related scams that present themselves as a legitimate investment. Aside from that, I think an argument could be made that bitcoin itself is a form of pyramid scheme. I'm not sure if I 100% agree with that, but I understand the line of reasoning. I'm glad regulators are looking into this and asking these questions.
notahacker 9y ago
Think it's probably easier to argue to the public that this thing which the company said was a convenient digital way of converting other digital assets to dollars but lied about the dollars suckered innocent people than most bog-standard "we've found a totally legitimate way of earning 100% weekly returns but we're really struggling to get the finance for it so we'll even pay your referral bonuses on top for promoting it" Ponzi scams.

Asparagirl 9y ago

No. Go do some reading on all the charities and hospitals that were hit very hard by the Madoff ponzi scheme imploding. They had to give up millions that their invested-with-Madoff-and-Madoff-feeder-funds rich donors had promised them, donations they had been relying on and been planning their budgets around. Worse still, in a ponzi scheme there can be clawbacks of money you “made” before and already spent, not just loss of the existing money that goes poof. EDIT: Or, if you’re a sports fan, consider the impact on the New York Mets and their budget over the last decade.