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From user experience, I personally don't see a strong benefit of crypto. It always looks like a Ponzi Scheme to me. When early users are people driven by greed

From user experience, I personally don't see a strong benefit of crypto. It always looks like a Ponzi Scheme to me. When early users are people driven by greed than productivity, it is a HUGE problem.

aabhay 5y ago
Exactly. Nassim Taleb calls it an “open ponzi” — a ponzi that is openly known
- seibelj 5y ago
  Taleb has never revealed the details of his investment portfolio. For someone who screams "I don't care - show me the returns!" it's interesting that he cannot prove that his "black swan" strategy has ever been actionable for his own or anyone's portfolio, how to use his theories to make significant money vs. normal strategies, and any proof that his hedge fund made any money during the dot-com crash which you would figure would be the prime time to make money given his public persona. Taleb got profiled in the New Yorker, his Black Swan book became popular, and he has rode that and Twitter ever since. I highly recommend people see him for what he is - a public figure that is a bullshitter like anyone else - at least until he shows proof that he is some sort of investor oracle. He has actively sued people who revealed how much money his prior fund lost, as those documents are floating around but he attacks anyone who publicly reveals them.
  - jeffreyrogers 5y ago
    Someone in the industry has a theory that he made his initial fortune by being unhedged during Black Monday[0] and benefiting from being on the "right" side and he's been coasting on that since then. Obviously hard/impossible to say, but he is definitely hypocritical when it comes to things like "skin in the game". [0]: https://en.wikipedia.org/wiki/Black_Monday_(1987) https://en.wikipedia.org/wiki/Black_Monday_(1987)
  - pdog 5y ago
    > It's interesting that he cannot prove that his "black swan" strategy has ever been actionable for his own or anyone's portfolio, how to use his theories to make significant money vs. normal strategies... Mark Spitznagel, a cofounder of Empirica (Taleb's old fund), went on to start Universa which did pretty well with similar theories (tail-risk strategies and insurance via options against extreme market risk) in both the 2008-2009 period and last year, when they booked a huge return. So there's some evidence that the theories work to produce uncorrelated (or negatively correlated) returns that outperform the market[1]. [1]: Universa's flagship "Black Swan Protection Protocol" fund has produced a mean annual return on invested capital of 76% since the firm was created in 2008. https://www.forbes.com/sites/antoinegara/2020/04/13/how-a-goat-farmer-built-a-doomsday-machine-that-just-booked-a-4144-return/ https://www.forbes.com/sites/antoinegara/2020/04/13/how-a-go...
- sendbitcoins 5y ago
  Nassim could argue that its a "greater fool machine", but its literally not a ponzi.
  - graeme 5y ago
    What’s the distinction, and do you have a source formalizing that? I had always understood a ponzi as being something paid out by later investors, and where you had a plausible reason to believe in increase in value. Here the plausible reason is “bitcoin will take over the financial system and everyone will need it” or “bitcoin will be the new store of value and everyone will want it”. In either event payout necessarily comes from later investors.
    - sendbitcoins 5y ago
      Bitcoin makes no claim of being an income-producing asset. All non-income producing assets { gold, wine, art, baseball cards, air-jordans } are bought as a store-of-value with the hope of selling it at a higher price. Ponzi appears to be an income-producing asset, but the income is paid out from the principal.
hanniabu 5y ago
Starting about a year ago the token distributions have favored users.
chrisco255 5y ago
I do. I can take out a 6 figure loan in 15 seconds and send it to anywhere in the world (https://aave.com/ https://aave.com/). I can deploy capital, I can participate in liquidity pooling on decentralized exchanges in a completely permissionless manner (https://uniswap.org/ https://uniswap.org/) (impossible unless you're a Wall Street insider in the current system), I can lend out currency at higher market rates to day traders participating in leverage trading (https://dydx.exchange/ https://dydx.exchange/) (impossible unless I'm a Wall Street insider today), I can mint a derivative of a Tesla stock that follows the price action of Tesla from anywhere in the world (https://www.synthetix.io/ https://www.synthetix.io/). I can trade 24/7. I can play a game, earn in-game swag and trade that on an open marketplace (https://opensea.io/ https://opensea.io/). I can take out crop insurance backed by a smart contract in an African country that lacks a stable legal system or currency (https://www.arbolmarket.com/ https://www.arbolmarket.com/). I can go on and on...
- vmception 5y ago
  I’m glad you wrote this, my favorite part coming up is when they pretend a MySQL database would be better for cross chain yield farming
- jude- 5y ago
  The unspoken truth here is that defi tokens all worthless until you cash out, and that leaves a paper trail. Hope you paid your taxes on those trades!
  - chrisco255 5y ago
    I'm not cashing out, I'm staying in the Ethereum ecosystem for good. And no they're not worthless. USDC for example, is literally exchangeable for $1. I can literally take out a six figure loan against crypto holdings and buy a house with it. I can also pay off high interest credit card debt and earn yield at the same time. All the other tokens are liquid and exchangeable 24/7.
    - jude- 5y ago
deleted 5y ago
[deleted]

aabhay 5y ago

Exactly. Nassim Taleb calls it an “open ponzi” — a ponzi that is openly known

seibelj 5y ago
Taleb has never revealed the details of his investment portfolio. For someone who screams "I don't care - show me the returns!" it's interesting that he cannot prove that his "black swan" strategy has ever been actionable for his own or anyone's portfolio, how to use his theories to make significant money vs. normal strategies, and any proof that his hedge fund made any money during the dot-com crash which you would figure would be the prime time to make money given his public persona. Taleb got profiled in the New Yorker, his Black Swan book became popular, and he has rode that and Twitter ever since. I highly recommend people see him for what he is - a public figure that is a bullshitter like anyone else - at least until he shows proof that he is some sort of investor oracle. He has actively sued people who revealed how much money his prior fund lost, as those documents are floating around but he attacks anyone who publicly reveals them.
- jeffreyrogers 5y ago
  Someone in the industry has a theory that he made his initial fortune by being unhedged during Black Monday[0] and benefiting from being on the "right" side and he's been coasting on that since then. Obviously hard/impossible to say, but he is definitely hypocritical when it comes to things like "skin in the game". [0]: https://en.wikipedia.org/wiki/Black_Monday_(1987) https://en.wikipedia.org/wiki/Black_Monday_(1987)
- pdog 5y ago
  > It's interesting that he cannot prove that his "black swan" strategy has ever been actionable for his own or anyone's portfolio, how to use his theories to make significant money vs. normal strategies... Mark Spitznagel, a cofounder of Empirica (Taleb's old fund), went on to start Universa which did pretty well with similar theories (tail-risk strategies and insurance via options against extreme market risk) in both the 2008-2009 period and last year, when they booked a huge return. So there's some evidence that the theories work to produce uncorrelated (or negatively correlated) returns that outperform the market[1]. [1]: Universa's flagship "Black Swan Protection Protocol" fund has produced a mean annual return on invested capital of 76% since the firm was created in 2008. https://www.forbes.com/sites/antoinegara/2020/04/13/how-a-goat-farmer-built-a-doomsday-machine-that-just-booked-a-4144-return/ https://www.forbes.com/sites/antoinegara/2020/04/13/how-a-go...
sendbitcoins 5y ago
Nassim could argue that its a "greater fool machine", but its literally not a ponzi.
- graeme 5y ago
  What’s the distinction, and do you have a source formalizing that? I had always understood a ponzi as being something paid out by later investors, and where you had a plausible reason to believe in increase in value. Here the plausible reason is “bitcoin will take over the financial system and everyone will need it” or “bitcoin will be the new store of value and everyone will want it”. In either event payout necessarily comes from later investors.
  - sendbitcoins 5y ago
    Bitcoin makes no claim of being an income-producing asset. All non-income producing assets { gold, wine, art, baseball cards, air-jordans } are bought as a store-of-value with the hope of selling it at a higher price. Ponzi appears to be an income-producing asset, but the income is paid out from the principal.

hanniabu 5y ago

Starting about a year ago the token distributions have favored users.

chrisco255 5y ago

I do. I can take out a 6 figure loan in 15 seconds and send it to anywhere in the world (https://aave.com/ https://aave.com/). I can deploy capital, I can participate in liquidity pooling on decentralized exchanges in a completely permissionless manner (https://uniswap.org/ https://uniswap.org/) (impossible unless you're a Wall Street insider in the current system), I can lend out currency at higher market rates to day traders participating in leverage trading (https://dydx.exchange/ https://dydx.exchange/) (impossible unless I'm a Wall Street insider today), I can mint a derivative of a Tesla stock that follows the price action of Tesla from anywhere in the world (https://www.synthetix.io/ https://www.synthetix.io/). I can trade 24/7. I can play a game, earn in-game swag and trade that on an open marketplace (https://opensea.io/ https://opensea.io/). I can take out crop insurance backed by a smart contract in an African country that lacks a stable legal system or currency (https://www.arbolmarket.com/ https://www.arbolmarket.com/). I can go on and on...

vmception 5y ago
I’m glad you wrote this, my favorite part coming up is when they pretend a MySQL database would be better for cross chain yield farming
jude- 5y ago
The unspoken truth here is that defi tokens all worthless until you cash out, and that leaves a paper trail. Hope you paid your taxes on those trades!
- chrisco255 5y ago
  I'm not cashing out, I'm staying in the Ethereum ecosystem for good. And no they're not worthless. USDC for example, is literally exchangeable for $1. I can literally take out a six figure loan against crypto holdings and buy a house with it. I can also pay off high interest credit card debt and earn yield at the same time. All the other tokens are liquid and exchangeable 24/7.
  - jude- 5y ago

deleted 5y ago

[deleted]