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I think this is an example of the SV/startup mentality that regulations don't matter and just do it, it'll be fine. And in a lot of cases it is. But not in so
by filmgirlcw 8y ago
I think this is an example of the SV/startup mentality that regulations don't matter and just do it, it'll be fine.
And in a lot of cases it is.
But not in something as tightly regulated as banking -- and not when as the Bloomberg piece astutely points out, the "innovation" in question was already done in the 20s before regulation.
It's like crypto Ponzi schemes. People who start them think they are doing something innovative, when really, it's the same "robbing Peter to pay Paul" trick that existed long before Charles Ponzi and his postal reply coupons scam made it a household name. And yet, investors still willingly invest in clear Ponzis, because they are convinced the math will work! The math never works. (To be clear, I think there is a difference between someone like Charles Ponzi and the BitConnect scamsters and the people who invested with Madoff. Madoff was successful for so long, in part because he didn't promise ridiculously outrageous returns. He was running a Ponzi, but what made him so much worse was that it looked legit to investors, whereas most Ponzis offer returns that are never sustainable and look weird to a more savvy investor.)
I'm not implying Robinhood is a Ponzi, btw, but I think what it did here by actively misleading the public is really gross and I've lost all respect for the startup and will never give them a cent -- "free" trades or not.
- Semaphor 8y agoI mean there were a bunch of people in cryptocurrencies running clearly labeled ponzis. I remember one person getting scared after hundreds of people actually bought into their ponzi smart contract (that clearly explained what it was).
- Slippery_John 8y agoI believe that was PonziCoin
- filmgirlcw 8y agoLOL. Yes -- I forgot about that! Oh man, the alt-boom the last half of 2017 was really fun -- provided you didn't put any money into anything!
- LowLevelHacker 8y agoYeah, all that money I made and the new car I bought, what a waste, lol right.
- fossuser 8y agoA small amount of people do make a lot of money in a Ponzi scheme though (not just the creators of the scheme). I suspect this is why some people bought the ponzi coins - they figured if they threw some money in early enough they'd get a decent multiple back. If not and they lost it - probably not a huge deal if you're playing and know the game.
- samstave 8y agoBanking is only tightly regulated for the little fish. See GS, 1MDB, AIG, etc.
- pizza 8y agowhosoever that goes from finance executive to lawmaker (admittedly, necessarily a successful lawmaker, at that,) can end up making the rules arbitrarily complex and thus arbitrarily beneficial, too. can't find the source atm but nassim taleb talks about this in an interesting way.