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Doge Branded as Ponzi by Federal Reserve Bank of Minneapolis President

JohnJamesRambo 5y ago
“The reason that the dollar has value is because the US government has a legal monopoly on producing the dollar.” Does he not see the audacity of the hubris and irony in his statement? “Like my Ponzi but not their Ponzi” is what it reads like to me. Is Doge good money? No, because it has uncapped supply. But real crypto like Bitcoin, despite all its flaws will never have more than 21 million of them created out of thin air by some necktie, and I find that very comforting.
- daenz 5y ago
  How is the US dollar a Ponzi scheme? I have no incentive to get other people to use the dollar.
  - reedjosh 5y ago
    > I have no incentive to get other people to use the dollar. Ponzi != Pyramid
    - daenz 5y ago
      Thanks, TIL. So the basic difference is it seems like the pyramid nature is concealed in a ponzi scheme.
  - rafale 5y ago
    You do. You just don't have enough dollars to realize it.
  - andybak 5y ago
    > I have no incentive to get other people to use the dollar. I live in a country that doesn't use the dollar. I have a large incentive to persuade the world to use my currency in favour of the dollar. (It's only the enormity of the task that prevents me taking immediate action)
  - nszceta 5y ago
    It's similar but more guns are involved. As David Graeber wrote in “Debt,” “Nixon floated the dollar in order to pay for the cost of a war in which he ordered more than four million tons of explosives and incendiaries dropped on cities and villages across Indochina… the debt crisis was a direct result of the need to pay for the bombs, or, to be more precise, the vast military infrastructure needed to deliver them. This was what was causing such an enormous strain on U.S. gold reserves.” For the first time in history, the world was in a pure fiat standard. The dollars held by central banks across the globe lost their backing, and there was a geopolitical moment where U.S. dominance was called into question and where a multipolar financial world was a distinct possibility. Adding even more pressure, in 1973 the Arab petroleum exporters of OPEC decided to quadruple the price of world oil and embargo the U.S. in response to its support for Israel during the Yom Kippur War. In just a few years, a barrel of oil rose from less than $2 to nearly $12. Faced with double-digit inflation and declining global faith in the dollar, Nixon and his Secretary of State and National Security Advisor Henry Kissinger came up with an idea that would allow them to keep “guns and butter” going in the post-gold standard era and alter the fate of the world. In 1974, they sent new Treasury Secretary William Simon to Saudi Arabia “to find a way to persuade a hostile kingdom to finance America’s widening deficit with its newfound petrodollar wealth.” Simply put, a petrodollar is a U.S. dollar paid to a petroleum exporter in exchange for oil. As a Bloomberg report says, the basic framework was “strikingly simple.” The U.S. would “buy oil from Saudi Arabia and provide the kingdom military aid and equipment. In return, the Saudis would plow billions of their petrodollar revenue back into Treasuries and finance America’s spending.” This was the moment that the U.S. dollar was officially married to oil. From https://bitcoinmagazine.com/culture/the-hidden-costs-of-the-petrodollar https://bitcoinmagazine.com/culture/the-hidden-costs-of-the-...
    - 8note 5y ago
      "lost its backing" is an odd statement. Its not like gold is backed by anything. The taxable product of the USA is way more valuable than some gold, especially since you an eat some of it
- admax88q 5y ago
  The US dollar loses value over time on purpose. Doge is being pumped via hype so that the early adopters can cash out.
  - eMGm4D0zgUAVXc7 5y ago
    > The US dollar loses value over time on purpose. Sure it does that on purpose. But a purpose as desired by one entity is not necessarily a good purpose for another. Is it a good purpose for the US government's need of financing their country? Yes. Good for people who want to save money? No.
    - AlexandrB 5y ago
      > Good for people who want to save money? No. But it encourages investing in assets like real estate, equities, and (ironically) Bitcoin instead of holding cash. Suppose USD appreciated over time and often "beat the market". Why would anyone invest in startups or existing companies instead?
      - eMGm4D0zgUAVXc7 5y ago
        Again the same: The purposes of startups and existing companies who want to find investors are not necessarily the same purposes as of those who just want to put money aside for saving. They surely may benefit from cheap inflated dollars. But that does not mean savers benefit. Like with software, one person's feature is another person's bug. Bitcoin users consider inflation as a bug, so that's why they use it.
    - rualca 5y ago
      > But a purpose as desired by one entity is not necessarily a good purpose for another. Inflation is a very basic and proved tool to not only stabilize the value of a currency (you know, what a currency is supposed to be) but also to provide incentives to avoid stockpiling production potential and lower unemployment rates. Crypto speculators might desire to exploit their first-mover advantage to speculate their way into riches without creating anything of value to a society, but that does not mean that the interests of these speculators are aligned with society's best interests.
- paulpauper 5y ago
  There are a finite number of pogs and beanie babies too
  - stickfigure 5y ago
    Any factory in china can crank out as many beanie babies as anyone wants for a few cents each.
    - AlexandrB 5y ago
      That's like saying I can crank out as many of my own alt coins as I want. So what? They're not "genuine" in the same way that my blockchain is not Bitcoin.
      - stickfigure 5y ago
        The difference is that you can't tell the difference between a counterfeit beanie baby and a real one.
- scandox 5y ago
  That is not hubris. That is a statement of fact: that Ponzi scheme is backed by the military, industrial and economic power of nations. Hubris is thinking you can make some shit up and get people to accept it ... Without force.
  - rualca 5y ago
    It's important to note that a nation's official currency has intrinsic value simply because the nation's economic output is, by law, required to be expressed in terms of it, and each and every transaction involving the state, whether it's paying for goods and services or paying salaries owed to state employees, are expressed in terms of the official currency. So, it's hard to hand-waive around the fact that an official currency, unlike a so-called cryptocurrency, does have intrinsic value because by definition certain units of account do buy you certain goods and even the work of full-time employees.
- jrochkind1 5y ago
  Yeah, what the chairman said about monopolyis indeed not quite it. A monopoly in creating something isn't even enough to guarantee (or even make it more likely) something will have enduring value. bitcoins indeed have capped production, which kind of serves like a monopoly on producing it (or perhaps even better, it's supply is completely predictable). But as long as the only reason it's trading so high is because everyone is hoping to sell it to someone who will buy it even higher -- that's not why people acquire dollars, and I can see the ponzi scheme analogy. Ultimately, I'd say the reason the dollar has value is because the US Government charges taxes denominated in dollars, and accepts only dollars in payment of them.
- yarg 5y ago
  The US government does not actually have the monopoly. The Federal Reserve does. The Federal Reserve is not Federal - it is a private bank that mints the dollar, lends it to the government and charges them interest. (I'd really rather be wrong on this; but if I've just been listening to idiots on the internet, I'm sure someone's going to let me know.)
  - JumpCrisscross 5y ago
    > US government does not actually have the monopoly. The Federal Reserve does The Treasury operates the U.S. Mint [1]. That said, most dollars are created privately by banks when they create deposits through their lending. The Fed oversees all of this while also creating dollars through similar mechanisms (albeit higher-powered ones). > Federal Reserve is not Federal - it is a private bank that mints the dollar The Federal Reserve was created by an act of Congress. Its leadership is appointed by the President. Its profits remit to the U.S. Treasury. It's a creature of the government in everything but name. [1] https://www.usmint.gov https://www.usmint.gov
    - yarg 5y ago
      And the member banks (genuine question)?
      - 8note 5y ago
        From 2008, it looks like they're subject to nationalization if the government wants
- reedjosh 5y ago
  > No, because it has uncapped supply. Dogecoin adds a fixed number of coins per year. At this point that fixed number is less inflationary than the USD by a large margin. That said, I'm more of a Monero and BTC guy myself. > For example, there are now 128 billion Dogecoins in circulation. The rate of increase in the number of Dogecoins, once mined, is no more than 5 billion per year. https://investorplace.com/2021/02/dogecoin-has-an-inflationary-supply-trait-making-it-ideal-as-a-cryptocurrency/ https://investorplace.com/2021/02/dogecoin-has-an-inflationa...
  - rualca 5y ago
    > Dogecoin adds a fixed number of coins per year. At this point that fixed number is less inflationary than the USD by a large margin. That, alone, renders dogecoin unsuited as money. Money is, by definition, expected to be stable, not only to serve its purpose as a store of value but also as a standard of deferred payment.
    - reedjosh 5y ago
      With the fed itself acknowledging it's losing the battle to inflation--4.2% over the last year--then I'd say by your definition, that, alone, renders _dollars_ unsuited as money. https://www.bls.gov/opub/ted/2021/consumer-price-index-up-4-2-percent-from-april-2020-to-april-2021.htm https://www.bls.gov/opub/ted/2021/consumer-price-index-up-4-... And again, that's just the CPI. Many other metrics have it higher, and asset prices like housing have skyrocketed.
      - rualca 5y ago
        > With the fed itself acknowledging it's losing the battle to inflation--4.2% over the last year--then I'd say by your definition, that, alone, renders _dollars_ unsuited as money. It makes absolutely no sense to claim that a historical high inflation rate of 4.2% renders the dollar unsuited as money, when your everyday cryptocurrency, the so-called magic alternative to all money problems, sees far higher fluctations on a daily basis. Take dogecoin for example. Today alone dogecoin's price tanked 23%. That's a drop in a 24h period. This is the sort of argument that eats away the credibility of any argument made regarding cryptocurrencies as an alternative to money. It's pretty clear that we have a small army of early joiners eagerly awaiting to cash out and to ensure they keep the pumping part of the pump-and-dump scheme they make this sort of absurd claims that doesn't pass the faintest of scrutinies.
akarma 5y ago
> Dogecoin branded as Ponzi by the president of the Federal Reserve Bank of Minneaopolis. Important to note that this is the president of the Federal Reserve Bank of Minneapolis (misspelled in the article), not the Chair of the Federal Reserve, who leads what we generally think of as the "fed."
- bena 5y ago
  I noticed that too, but I don't think it really matters. Even if Jerome Powell came out every day just to say "Fuck Doge, it's a scam", the response from crypto enthusiasts would be "That's exactly what you would say"
  - ffggvv 5y ago
    it’s not about enthusiasts. it’s about adoption by financial services firms and corporations. which will be affected by what the fed says
    - lallysingh 5y ago
      Of /Dogecoin/? This is going to result in more memes, possibly some decent puns.
      - ffggvv 5y ago
        of crypto in general. doge is irrelevant other than the fact it contributes to making all crypto seem like a joke
  - willis936 5y ago
    While the conclusion that "Doge pumping is a scam" is very likely correct, the sentiment that an adversary can't give an unbiased opinion is also correct. I'd value the opinion of an expert with no skin in the game more.
    - lupire 5y ago
A4ET8a8uTh0 5y ago
It is overall very interesting. And accurate in my opinion. Current batch of cryptos are very much an MLM. And I am saying this is a quiet sympathizer of crypto ( you know - actual crypto currency intended to bypass old gatekeepers with all the benefits and threats coming with it ). As it stands right now, the ridiculous push for centralization and greater control is everything crypto was trying to undermine. It is possible that is emblematic of how we approach systems as a species, because everything seems to tend towards one or two major players. Right now only monero, and to a much lesser extent bitcoin, still resemble the original promise of crypto.
- rafale 5y ago
  Ethereum and smart contracts blockchain in general have real potential and utility imo. The use cases are still niche, but it's not a ponzi/MLM, not even close.
  - lalaland1125 5y ago
    What would be an example of a smart contract that provides value compared to simpler/cheaper centralized solutions?
    - cma 5y ago
      There is probably a more advanced version of ransomware they can enable. The other big use case envisioned when they were conceived was automated payouts on distributed assassination markets, where several news articles about an assassination could trigger a payout.
      - lalaland1125 5y ago
        Yep. Smart contracts and cryptocurrencies really helped accelerate the ransomware market.
    - dcolkitt 5y ago
      When I bought my house, I paid the title escrow company thousands of dollars to perform a very simple service. Hold the deposit money in escrow, and release it specific parties based on certain conditions. There's no reason in the future why that service couldn't be performed by an off-the-shelf smart contract for essentially nothing. Home buyer sends deposit money to the contract. If buyer exercises a contingency before date M, release money back. If user doesn't, transfer funds to home seller. In case of dispute, defer decision to a pre-agreed upon adjudication agent and pay said agent to render a decision. There are so many stories like this in the plumbing of the financial system. It's ironic, because high finance is built upon layers and layers of complex abstraction. The way someone a sophisticated hedge fund decides how to allocates assets, hedge exposures, levers positions, manage risk, and execute trades is like something straight out of science fiction. But the way the money actually moves from point A to point B is stuck in the 19th century. It's hard to overstate how much of the value collected by the financial industry is actually just handling the nuts and bolts of physically moving money around in a trusted way. For every quant building a derivatives pricing model based on stochastic calculus, there's a dozen low-level clerks sending each other wire instructions by fax and filling out boilerplate KYC notifications.
chainwax 5y ago
*Federal Reserve Bank President _of Minneapolis_
sschueller 5y ago
So, in how much trouble is Elon now? Edit: not much I guess since this isn't the fed fed but the president of the MN fed.
- paulpauper 5y ago
  Likely none unless he manipulated price for financial gain
bena 5y ago
I mean, I'm not totally surprised, but I'm also not totally sure why it matters? It's not like crypto enthusiasts are going to take the word of someone working literally for the fiat system as anything but FUD.
paulpauper 5y ago
And crypto keeps falling . Given the poor performance and bariers of entry to ownership such as kyc, a diversified large cap tech portfolio is way better. There is no advantage to owning bitcoin over index funds unless you want to stash away money from law enforcement
nerdponx 5y ago
Is it a Ponzi scheme if nobody is actually orchestrating the scheme? What's the difference between a Ponzi scheme and a speculative bubble?
meh99 5y ago
I really don’t see how the nation isn’t a Ponzi scheme. We keep buying in with our time and being told there isn’t enough to go around when it comes to affording a life. I know the historical context for a Ponzi scheme is financial, but yesterdays definitions need not be our own.
lucasmullens 5y ago
Not mentioning "of Minneapolis" in the title makes this seem like a much bigger deal. I also don't trust an article about Minneapolis that spells it "Minneaopolis"
tomcooks 5y ago
So this is just weaponized clickbait I guess?
Shadonototro 5y ago
if doge is a ponzi, then every other coins should be branded the same way, i see no differences
- SideburnsOfDoom 5y ago
  I don't think that's in any way wrong. Yes, yes they are the same.
  - incrudible 5y ago
    They aren't Ponzi schemes either, nor are they a type of fraud. Their continued rise in value may rely on "Bigger Fool Theory", but that is true for many other investments that aren't Ponzi schemes either. A Ponzi scheme doesn't require "bigger fools" or really any sort of fool. Many Ponzi schemes start out as honest investment offerings and only turn into fraud when the fund manager starts hiding their losses.
    - deleted 5y ago
      [deleted]
    - SideburnsOfDoom 5y ago
      IDK, literal definition of Ponzi or pyramid says it does require "bigger fools" plain and simple. You seem to be saying that the "too good to be true fund manager is hiding a Ponzi" doesn't require fools, because the Ponzi is well hidden. Hidden Ponzi is still a Ponzi, hiding it is a (another) financial crime; and "too good to be true" is still magnet to fools. The last customers will still eventually take the fall, that's the structure of a Ponzi whether they know it or not. None of this is relevant; You're talking about how not all quadrupeds are horses, the issue is if all these horses are quadrupeds. These coins continued rise in value (without anything underlying) while relying on "Bigger Fool Theory" is an example of a Ponzi and a fraud.
      - incrudible 5y ago
        What distinguishes a Ponzi scheme is that it promises returns that are paid out with money from new investors. What makes it a fraud is that the source of these returns is misrepresented. It is mathematically doomed to fail eventually. A commodity like cryptocurrency (or precious metal) doesn't have returns. It may appreciate, depreciate or maintain its value. If the only argument for its appreciation is that "some bigger fool than me will find it to be more valuable", then that still does not make it a Ponzi scheme, nor does it make it a fraud.
doggodaddo78 5y ago
Is the attack on all non-state currency-like instruments is they "require" new "investors" to prop-up the value? Isn't it the case that many speculators are attempting to monetize while it is ultimately a meaningful, useful currency-like instrument created accidentally? Even if it was created as a joke, it's still useful if it can be transactionalized for commerce.
- RivieraKid 5y ago
  Crypto will never be competitive with official government currencies, it has almost no advantages except rare situations. Official currencies are stable and extremely low-risk. This is only possible thanks to the monetary policies of central banks. Bitcoin can never have this level of stability or safety, because there's no central authority which manipulates the price.
Ekaros 5y ago
So Bitcoins next and when Ethereum? I do not see any fundamental difference between them and Doge. Just because token was made as comment, should it be treated any different?
the-dude 5y ago
Incumbent slams newcomer. News at '11.
endisneigh 5y ago
The fact that none of the top 3 cryptocurrencies are inflationary tells you everything you need to know about the motivations of the early adopters. I do wonder what effect this opinion will have in the next 12 months for DOGE.
- echelon 5y ago
  > The fact that none of the top 3 cryptocurrencies are inflationary tells you everything you need to know about the motivations of the early adopters. The fact that they think their crypto is more important than democratic government sovereignty tells you the rest. It's the moral equivalent of "I got mine, screw you". Why should the crypto whales be in charge? Who elected them? What good do they do for the rest of us? Crypto doesn't pave the roads, feed the poor, or invest in university science R&D. Instead it wastes energy, causes GPU shortages, peddles away the brains of brilliant engineers on useless tech, and creates incentives for more ransomware. These folks are hoarding digital Beanie Babies and touting it as the next coming Messiah. What they're really thinking is how rich they'll be if we all fall for the same trap. Bitcoin sucks. edit: to respond to a followup comment: > The fact the parent post has already been modded down is what pisses me off about the crypto currency world The thing that gets me is that two downvotes tripped HN's anti-flame/anti-spam filter, and now I can't comment anymore. Whatever. I'm not convincing anybody with strong convictions. My arguments are valid (and not unique to me), and I hope they spread to the broader public.
  - Taek 5y ago
    The beauty of crypto is that you can elect which ecosystem you participate in. If you don't like bitcoin because it's dominated by whales, go to eth. If not eth, try doge or Monero. Or start your own. It's pretty easy to move money between cryptos, that you only hold Monero and your friends only holds doge does not stop the two of you from transacting
    - echelon 5y ago
      > The beauty of crypto is that you can elect which ecosystem you participate in. The beauty of fiat is that the government can print more, if needed, and can tightly regulate monetary supply to increase the health of our economy and breadth of our trade. The FBI and CIA can monitor who transacts and can shut down hackers and terrorists. I can also elect the people in charge of the system so that they can create more opportunity. > If you don't like bitcoin because it's dominated by whales, go to eth. If not eth, try doge or Monero. Bitcoin makes the Winklevosses richer. Ethereum makes Buterin richer. Everyone hawking this is getting richer, but nothing worthwhile is being done. > Or start your own. What the hell good does that do? I'd rather use my life to solve real problems. I want to make creators more money, increase the amount of art in the world, and eventually work on solving cancer and metabolic diseases. I don't have time for this garbage, and neither does the rest of the world. It's wasted compute, both in terms of GPU and brain cycles. > It's pretty easy to move money between cryptos, that you only hold Monero and your friends only holds doge does not stop the two of you from transacting I can already move money. What problem is being solved? Maybe this is great if I want to illicitly move money or dodge taxes. I don't see any other reason for it.
cryptica 5y ago
>> Literally, people have been fleeced for tens of billions of dollars Fiat money printing has been fleecing me for over a decade. I've had to endure my salary being held down while rent prices kept going up and I was forced to change companies many times in desperate attempts to get a raise. I even had to change countries, leave most of my family behind to just to try to keep up with inflation so that maybe one day I will be able to buy a simple house and not be enslaved to a landlord. I agree that most cryptos currently are garbage but it's not fair to call out crypto for fleecing people out of their hard earn money when global reserve banks are doing the same on a much larger scale. Please consider how hopeless many millennials feel right now being stuck having to choose between different pyramid schemes. As non-meritocratic as crypto space might seem, so far it's the only place where I was able to achieve any sort of success as a software developer. The fiat corporate ponzi is the least meritocratic ponzi of all.
- endisneigh 5y ago
  your comment makes absolutely no sense. rent prices going up has nothing to do (directly) with fiat. your lack of wage increases also is not a problem inherent to the use of fiat.
  - cryptica 5y ago
    As reserve banks print more money, the money supply expands, this means more fiat chasing fewer goods. This is what makes house prices go up, which leads to increasing rent prices (real estate investors need the rental income to cover their mortgage repayments). Salaries, on the other hand, are negotiated up front and sometimes not re-negotiated for years... In the meantime, the currency is inflating (losing value, prices of everything going up). So by the end of the year, your salary buys you less than what you had negotiated at the start of the year. Some companies offer 2% salary increase per year; this is not enough to cover real inflation. By many accounts, the real inflation is much higher than that; the basket of goods to measure inflation has been manipulated over the years to make inflation seem smaller than it actually is. So even in those cases, employees are losing buying power over time. Besides, inflation is not a single number. Different items inflate at different rates. Money printing is creating wealth inequality which means that goods which appeal to wealthier individuals (such as real estate and other assets which provide financial independence) inflate faster than goods which appeal to the average person (which merely have survival utility).
narrator 5y ago
This is just a bunch of bluster. The FED isn't the SEC. They don't have a law enforcement division or anything like that with guns and badges. Some guy got in a car accident(Lewis v. United States)[1] with some Federal Reserve employee and tried to sue under the Federal Tort Claims Act, which allows the federal government to be sued for certain things, like car accidents, as they are normally subject to sovereign immunity. The judge said this didn't apply to the Federal Reserve because they aren't a federal agency. There is actually a long interesting argument in the case by the judge about why the Fed is not a federal agency. They can hire and fire employees at will, their workers are not in the civil service pension program, they get workers compensation, they receive no appropriated funds from congress, they can sue and be sued under their own name, etc. [1] https://openjurist.org/680/f2d/1239/lewis-v-united-states https://openjurist.org/680/f2d/1239/lewis-v-united-states
- nroets 5y ago
  Which is a good thing because it also makes them more immune to political pressure to overstimulate the economy.
- dcolkitt 5y ago
  > They don't have a law enforcement division or anything like that with guns and badges. What's interesting is that they're probably one of the only few federal entities without at least a small attached police force. Even NASA and the Department of Education have their own police.
  - cashewchoo 5y ago
    A federal reserve police force would open some interesting additional avenues for affecting interest rates outside of open market operations... (this is a joke)
  - retzkek 5y ago
    But they do: https://en.wikipedia.org/wiki/Federal_Reserve_Police https://en.wikipedia.org/wiki/Federal_Reserve_Police
anm89 5y ago
Jeez louise. I guess I give up on my stop misusing the term Ponzi scheme rant. Doge is all sorts of terrible things but it does not meet the traditional technical definition of a ponzi scheme when all of the gains to investors are generated via sale of assets on the open market and they have been totally honest about the nature of the asset from day one (it's a joke, it's a toy, don't take it seriously), and there is no structure of payouts that ensures that money from specific investors gets funneled to other specific investors based on seniority. It literally meets none of the criteria except for the sole fact that people that bought early made money(which is true of literally any asset that has gained in value over a time period). But I guess Ponzi has been officially redefined to "speculative asset that is in a bubble" at this point if that's what the regulators are going with. Except what do you call the thing Bernie Madoff did now? Because that had nothing to do with "speculative asset in a bubble".
- paulpauper 5y ago
  At this point the term is thrown around so loosely as to be meaningless
  - dmingod666 5y ago
    Kind of like 'hacker' now can apply to someone learning html.
- lupire 5y ago
  It's also a scheme in which early investors are paid by later investors, not by any form of value creation. The missing part is just the central administrator. A actual ponzi scheme could be called "classical ponzi scheme"
  - Sammi 5y ago
    Doge is a joke that you can own, just like a Weird Al Yankovic CD. It has the same value.
    - 5y ago
hans1729 5y ago
>“Maybe five years from now or 10 years from now or 20 years from now something useful will emerge from this, but so far, all that’s emerging is burning garbage,” Kashkari said. I would love to hear Vitalik Buterins take on this. After listening to him for a while, I got very humble with respect to the ideas of crypto, the abstraction of value etc. - of course the world of crypto is dominated by pump and dumps at the moment, but I'm not convinced that that's all there is to see. I think that crypto will reshape the world of money, just not in the terms that money is being thought off right now. If that assumption holds, most people would be unable to see the forest for the trees.
- beambot 5y ago
  > If that assumption holds, most people would be unable to see the forest for the trees, maybe even the president of the fed of minneapolis. It reminds me of living through the early www. We went from "who would ever buy books online?!", to DotCom euphoria, to market crash, to a long-term recovery, to a thriving internet economy. Some of the largest companies on the planet were created during the initial heyday period. Their trajectory was very non-linear, but they've had tremendous impact.
  - echelon 5y ago
    WWW: April 30, 1993 (28 years, 2 months) Bitcoin: January, 2009 (12 years, 5 months) In two more years, we'll be just about halfway there. I think the internet had far more apparent uses at 12 years (2005) than bitcoin has now.
    - beambot 5y ago
      Time constants on innovation rarely translate across domains. Look at adoption times for bank notes to central bank (i.e. federally-backed) fiat. Or adoption and discontinuation of the gold standard. TLDR: I would expect the time constant for money to be longer than the www.
    - WalterSear 5y ago
      The internet is far older than the WWW, fwiw. The first online commercial transaction was performed in 1971. https://www.fastcompany.com/3054025/youll-never-guess-what-the-first-thing-ever-sold-on-the-internet-was https://www.fastcompany.com/3054025/youll-never-guess-what-t...
josh2600 5y ago
I mean it's not a Ponzi scheme in that there isn't a 'borrow from peter to pay paul' kinda thing happening. It's actually just a kinda weird lottery with manipulable game theoretical rules. I think of a Ponzi as a scheme where someone is managing the game and intentionally defrauding new investors to pay old ones demanding redemptions. In the case of Doge no one party is managing the game and it's not even clear that there's any coordination amongst the large players. Again, at best it's a kind of game of chance with ill-defined rules. I still think it's worthy of condemnation as lotteries should have well-defined rules, IMHO, but that's an aesthetic issue. I'm only objecting to the specific use of the term Ponzi which I don't think applies here (and we should be specific with our language lest we lose our ability to define things sufficiently).
- NickM 5y ago
  I think of a Ponzi as a scheme where someone is managing the game I agree, but there's also not really a better word to describe something that is like a Ponzi scheme in every respect except the lack of central coordination. Having a distributed hive mind of people all collectively trying to pump the value of a coin basically yields the same end result as a conventional Ponzi scheme, but makes it much harder to regulate or shut down. Even worse is the fact that many of the people involved truly believe in their own evangelism, and don't realize that they're part of a negative-sum game. With the amount of value destroyed via mining, and the lack of any new value being created by the people investing in crypto, there will inevitably be more losers than winners in the long run, but that doesn't stop people from spouting HODL memes because they genuinely think that value is being created from nothing and that everyone is somehow going to get rich off of this stuff.
lupire 5y ago
Article is pretty poor, but the original source is pretty simple, and quote bizarre in context: https://www.linkedin.com/posts/paul-grewal-288978b4_grabbing-a-taco-at-lunch-today-i-was-in-activity-6809628094991880192-jlky/ https://www.linkedin.com/posts/paul-grewal-288978b4_grabbing...
- Ekaros 5y ago
  I wonder that too, it's a joke, but context where the Neel is answering is rather strange...
- lvs 5y ago
  Look at the millions of words pointlessly spilled across the internet over a throwaway comment on a message board.
orblivion 5y ago
Doge reddit is full of the same memes every day encouraging people to keep HODLing, stop complaining, and "do you think Doge will hit $10?". Something does feel off about all this.
runbathtime 5y ago
Ponzi's themselves are not illegal, but a descriptive term. I think what makes a ponzi scheme illegal is the existence of fraud, or lying about where the returns come from, not necessarily where the returns come from.
- detaro 5y ago
  A descriptive term for a type of fraud.
  - runbathtime 5y ago
    Where are the returns coming from? Is it a productive activity? Or are you making returns from others coming in and buying at a higher price? This can describe people pushing stocks not because the business is profitable, but because they say the price will go up. What makes this illegal? I think it comes down to lying or fraud, which is already illegal. What makes crypto interesting is there isn't one person to point to, but everyone out there promoting it is like running their own ponzi because they only profit by convincing someone to buy in a higher price than them. Also in crypto, you can say bitcoin is going to 1 million and it is taken seriously so how do you this a lie? Also, it might get there in the future. It has to be about why the crypto is going up and that is tricky. Can you lie by omission, because in a ponzi if you don't say how the returns come, is that still a ponzi? If you just say, this is going to the moon, and people believe you, is that a ponzi? Ultimately, all legitimate returns (investing) come from productive activity. Gambling comes from ponzi like dynamics. Gambling that the stock goes higher, trading, etc. This is all about returns from other people, not from productive activity of the underlying. I think this ponzi is not illegal as long as there is no lying about where returns come from. Perhaps these activities shouldn't be allowed to use the word investment. Because it is so hard to think about, I don't think it makes since to call them a ponzi. I think it makes since to explain to people you are gambling, not investing, and it will eventually not be sustainable, but crash back to fair value, which most of crypto's case is slightly above zero. I think with crypto there is a lot of misdirection, fraud, lying, but it is very difficult to prove. The SEC can't even figure out what a security is.... Because crypto has no intrinsic value, predicting crazy prices are ridiculous. It is all based on speculation. Most people know there isn't a company behind it making profits and they know that some people got lucky and bought in way lower than them. This is known. What may not be known is basic financial literacy and people who know better that do not tell the truth because they can make more money confusing and pumping crypto to the moon. Most people who know it has ponzi dynamics do not care, most people like ponzis, know the risks, and still want to play. Crypto makes ponzi games more fair.
m1117 5y ago
So is everything, as long as everyone accepts it it's good?
29athrowaway 5y ago
The creator of doge cashed out of it years ago to buy a Honda Civic. So clearly it is not a Ponzi scheme. Having long term capital gains is not a Ponzi scheme in itself. Are there other issues like pump and dumps? there might. But that is different to a Ponzi scheme. A general piece of advice.... Just ignore everyone trying to get you to "yolo" or "hodl". If you buy or hold and someone else sells, they win at your expense.
chad_strategic 5y ago
It always seems to me the Federal Reserve is largest Ponzi scheme that has gone unreported since 1913?
- chad_strategic 5y ago
  Down voters: Please make sure you truly understand the concept and history of money, currency, fiat currency, gold and how the Federal Reserve actually works and is structured. FOMC board members are not elected by the people, yet they control interest rates and the money supply. They are not the federal government and they maintain their own balance sheet of debt. They do have a little oversight from Congress but well Congress likes low interest rates. When low rates become a problem, they will more than likely be out of the office. They also allow America to finance our endless wars with low interest rates. Digital currency are the product of governments debt load and overspending. Feel free to pick up a good book on prime day: https://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve https://www.amazon.com/Creature-Jekyll-Island-Federal-Reserv...
- echelon 5y ago
  The fed has nukes and a blue water navy. Not to mention millions of hard-working citizens solving the world's problems.
  - deleted 5y ago
    [deleted]
incrudible 5y ago
"The reason that the dollar has value is because the US government has a legal monopoly on producing the dollar." That's a completely ridiculous statement, coming from none other than Neel Kashkari. These are the people in charge of your currency, desperately trying to convince you that the money they created out of thin air is more sound than a joke currency created after an image of a dog.
- lupire 5y ago
  He said the dollar has value, not that it is sound. If you think you understand better than a leading professional in the field, you might be the mistaken one.
  - clipradiowallet 5y ago
    > If you think you understand better than a leading professional in the field, you might be the mistaken one. I don't understand professional baseball, but if the owner of a team says "my pitchers are the BEST" - I can call "bullshit" on them without actually knowing if his pitchers are the best. It's in his best interest to say his pitchers are the best, even if they are not. He owns the team, and his livelihood is linked to the efficacy of his pitchers. This MN reserve employee has the same link between his livelihood and perceived value in the US dollar. tldr; the "professional" making the statement is heavily biased.
  - incrudible 5y ago
    > He said the dollar has value, not that it is sound. He gave a completely ridiculous reason why the dollar has value. It's along the lines of "Bitcoin has value because it is scarce and hard to create". It's a non-sequitur. It's also ignoring that 90% of the money supply is not created by the government. Perhaps he wanted to sanitize the following argument: Each year, there's a lot of people that owe a certain amount of dollars to the US government. If they don't find those dollars, they could end up in jail. This is a valid reason why the US dollar has natural demand and thus is valuable. > If you think you understand better than a leading professional in the field, you might be the mistaken one. That's not what I am saying. I'm pretty sure he knows better, but he is lying to you with a straight face. That's part of his job.
cblconfederate 5y ago
That is so wrong. It is dog money https://www.youtube.com/watch?v=cbI31x3FpS0 https://www.youtube.com/watch?v=cbI31x3FpS0 But in all seriousness, what are the odds that all the various pump-up schemes, from tesla to coins are another trick of the US to funnel the worlds money into their territory?
jtbayly 5y ago
The most interesting part was the question of how to pronounce it... I'm not sure why Doggy-coin didn't make the cut. That's honestly how I thought it was pronounced.
- passwordreset 5y ago
  It didn't make the cut? It certainly should have. I vacillate between Doggy-coin, and using a long O, something like DOE-gee-coin (as in "Get along, little doggies", which is sometimes sung with a long O). The use of Doje-coin always seemed silly. The mascot is a friggin dog, not a doje or a dozh, whatever those nonsense words mean. Stick with Doggy-coin, it make the most sense.
tibbydudeza 5y ago
Obiwan Elon - you are our only hope !!!!.
tus89 5y ago
Don't ponzi shemes need to pay out early investors (usually with the money from latter investors)? No-one is paying out Doge buyers, except those who choose to buy their coins from them. Speculation bubble =/= ponzi scheme.
- scottmsul 5y ago
  Yes, people misuse the terminology to make it sound more negative than it is
garyrob 5y ago
Cryptocurrency technology has utility which has not been fully exploited yet. At present, the two variants with the most market cap, Bitcoin and Ethereum, do have reasons to exist. (Which, again, involves some present utility but more future utility.) Bitcoin has earned a certain degree of trust that value moved into that form will continue to exist, just because there is so much distributed hardware behind it that it would be hard for a bad actor to compromise it. It's not impossible, but there is a certain amount of utility there. Ethereum also has earned a certain amount of trust which, today, is based on hardware, but within the next year will be based on Proof of Stake, with many billions of dollars in stake. (The amount of trust it will receive will depend on how decentralized the stakers turn out to be.) But it also has "smart contract" capabilities. It has speed and expense limitations but those will be lessened over time with sharding, rollups, etc. There are newer crypto technologies that may overtake those leaders in market cap, or may not. In any case, there is utility to these technologies. Because of that utility, some portion of the world's currency supply should be in the form of cryptos in order for the world to get maximum benefit. Say that is X% for a particular cryptocurrency. (Remember, BTC and ETH have somewhat different roles and so may be able to coexist.) Then the value of a coin should be X * .01 * (the total value of the world economy) / (the number of coins). That's not a Ponzi scheme at all. What is happening is that the world is moving slowly, in fits and starts, toward the discovery of the numerical value X for each coin. On the other hand, DOGE really does not provide utility that isn't being provided by more trustable cryptocurrencies, i.e. others are more likely to stick around for the long haul without crashes making the coin asymptotically approach zero in value. So, it really doesn't have the same kind of reason to exist. It's more like the Dutch tulip craze. It doesn't seem to fit the technical definition of "Ponzi scheme," but that label does capture the fact that its price is only what it is because of previous buyers. [Update: edited to point out more explicitly that a lot of the utility is future utility. I say a little more about that in a thread below.]
- mdoms 5y ago
  > Cryptocurrency technology has utility which has not been fully exploited yet. Such as? Name one thing.
  - 5y ago
excalibur 5y ago
Pot, kettle.
deleted 5y ago
[deleted]
bborud 5y ago
Any sufficiently confusing financial scheme is indistinguishable from fraud.
mrkramer 5y ago
I guess we should stop calling them cryptocurrencies because they are not used as currencies as USD or Euro are. We should call them fungible tokens since we already have non fungible tokens thing. Fungible tokens such as Pokemon or Yu-Gi-Oh cards which we trade and exchange for fun and profit.
EGreg 5y ago
Everything is a ponzi scheme, the only question is whether the speculative bubble is the majority of the value. The "use value" of a house is living in it. The "market value" from the housing market speculation may be multiples of that. There are two sectors in the economy... the productive one, which creates wealth for society (startups, new technology, reusing what works, cross pollination, economies of scale) and then there is the zero-sum one (exchanges, trading). Sure, it may enable more efficient capital allocation and help society somewhat, but over time, with financial derivatives, most of it is just a giant casino. When you come into a casino, and walk away with more dollars than you came in with, someone necessarily walks away with less. The casino doesn't print dollars. Same here. The exchanges don't issue dollars (they aren't banks, after all ;-) ... so for someone to win X, someone has to lose X. Have fun losing to the institutions. The investing game is over in whatever assets already appreciated 50,000% .. move on to newer projects, and better yet, try to focus on that first sector of the economy, the one that actually helps society!
Rapzid 5y ago
I feel like this will be the defining legacy for the current "age" of cryptocurrency. We didn't figure out how to actually distribute control and power, but heck if we didn't figure out how to distribute accountability!
joelbondurant 5y ago
USD is a terrorist ponzi.
runbathtime 5y ago
Here is the best, concise explanation that I have found for the nature of a ponzi scheme and the bigger fool theory. Professional of Finance - John Zdanowicz https://www.youtube.com/watch?v=fZ4VQyhQ3Q8 https://www.youtube.com/watch?v=fZ4VQyhQ3Q8

“The reason that the dollar has value is because the US government has a legal monopoly on producing the dollar.” Does he not see the audacity of the hubris and irony in his statement? “Like my Ponzi but not their Ponzi” is what it reads like to me. Is Doge good money? No, because it has uncapped supply. But real crypto like Bitcoin, despite all its flaws will never have more than 21 million of them created out of thin air by some necktie, and I find that very comforting.

daenz 5y ago
How is the US dollar a Ponzi scheme? I have no incentive to get other people to use the dollar.
- reedjosh 5y ago
  > I have no incentive to get other people to use the dollar. Ponzi != Pyramid
  - daenz 5y ago
    Thanks, TIL. So the basic difference is it seems like the pyramid nature is concealed in a ponzi scheme.
- rafale 5y ago
  You do. You just don't have enough dollars to realize it.
- andybak 5y ago
  > I have no incentive to get other people to use the dollar. I live in a country that doesn't use the dollar. I have a large incentive to persuade the world to use my currency in favour of the dollar. (It's only the enormity of the task that prevents me taking immediate action)
- nszceta 5y ago
  It's similar but more guns are involved. As David Graeber wrote in “Debt,” “Nixon floated the dollar in order to pay for the cost of a war in which he ordered more than four million tons of explosives and incendiaries dropped on cities and villages across Indochina… the debt crisis was a direct result of the need to pay for the bombs, or, to be more precise, the vast military infrastructure needed to deliver them. This was what was causing such an enormous strain on U.S. gold reserves.” For the first time in history, the world was in a pure fiat standard. The dollars held by central banks across the globe lost their backing, and there was a geopolitical moment where U.S. dominance was called into question and where a multipolar financial world was a distinct possibility. Adding even more pressure, in 1973 the Arab petroleum exporters of OPEC decided to quadruple the price of world oil and embargo the U.S. in response to its support for Israel during the Yom Kippur War. In just a few years, a barrel of oil rose from less than $2 to nearly $12. Faced with double-digit inflation and declining global faith in the dollar, Nixon and his Secretary of State and National Security Advisor Henry Kissinger came up with an idea that would allow them to keep “guns and butter” going in the post-gold standard era and alter the fate of the world. In 1974, they sent new Treasury Secretary William Simon to Saudi Arabia “to find a way to persuade a hostile kingdom to finance America’s widening deficit with its newfound petrodollar wealth.” Simply put, a petrodollar is a U.S. dollar paid to a petroleum exporter in exchange for oil. As a Bloomberg report says, the basic framework was “strikingly simple.” The U.S. would “buy oil from Saudi Arabia and provide the kingdom military aid and equipment. In return, the Saudis would plow billions of their petrodollar revenue back into Treasuries and finance America’s spending.” This was the moment that the U.S. dollar was officially married to oil. From https://bitcoinmagazine.com/culture/the-hidden-costs-of-the-petrodollar https://bitcoinmagazine.com/culture/the-hidden-costs-of-the-...
  - 8note 5y ago
    "lost its backing" is an odd statement. Its not like gold is backed by anything. The taxable product of the USA is way more valuable than some gold, especially since you an eat some of it
admax88q 5y ago
The US dollar loses value over time on purpose. Doge is being pumped via hype so that the early adopters can cash out.
- eMGm4D0zgUAVXc7 5y ago
  > The US dollar loses value over time on purpose. Sure it does that on purpose. But a purpose as desired by one entity is not necessarily a good purpose for another. Is it a good purpose for the US government's need of financing their country? Yes. Good for people who want to save money? No.
  - AlexandrB 5y ago
    > Good for people who want to save money? No. But it encourages investing in assets like real estate, equities, and (ironically) Bitcoin instead of holding cash. Suppose USD appreciated over time and often "beat the market". Why would anyone invest in startups or existing companies instead?
    - eMGm4D0zgUAVXc7 5y ago
      Again the same: The purposes of startups and existing companies who want to find investors are not necessarily the same purposes as of those who just want to put money aside for saving. They surely may benefit from cheap inflated dollars. But that does not mean savers benefit. Like with software, one person's feature is another person's bug. Bitcoin users consider inflation as a bug, so that's why they use it.
  - rualca 5y ago
    > But a purpose as desired by one entity is not necessarily a good purpose for another. Inflation is a very basic and proved tool to not only stabilize the value of a currency (you know, what a currency is supposed to be) but also to provide incentives to avoid stockpiling production potential and lower unemployment rates. Crypto speculators might desire to exploit their first-mover advantage to speculate their way into riches without creating anything of value to a society, but that does not mean that the interests of these speculators are aligned with society's best interests.
paulpauper 5y ago
There are a finite number of pogs and beanie babies too
- stickfigure 5y ago
  Any factory in china can crank out as many beanie babies as anyone wants for a few cents each.
  - AlexandrB 5y ago
    That's like saying I can crank out as many of my own alt coins as I want. So what? They're not "genuine" in the same way that my blockchain is not Bitcoin.
    - stickfigure 5y ago
      The difference is that you can't tell the difference between a counterfeit beanie baby and a real one.
scandox 5y ago
That is not hubris. That is a statement of fact: that Ponzi scheme is backed by the military, industrial and economic power of nations. Hubris is thinking you can make some shit up and get people to accept it ... Without force.
- rualca 5y ago
  It's important to note that a nation's official currency has intrinsic value simply because the nation's economic output is, by law, required to be expressed in terms of it, and each and every transaction involving the state, whether it's paying for goods and services or paying salaries owed to state employees, are expressed in terms of the official currency. So, it's hard to hand-waive around the fact that an official currency, unlike a so-called cryptocurrency, does have intrinsic value because by definition certain units of account do buy you certain goods and even the work of full-time employees.
jrochkind1 5y ago
Yeah, what the chairman said about monopolyis indeed not quite it. A monopoly in creating something isn't even enough to guarantee (or even make it more likely) something will have enduring value. bitcoins indeed have capped production, which kind of serves like a monopoly on producing it (or perhaps even better, it's supply is completely predictable). But as long as the only reason it's trading so high is because everyone is hoping to sell it to someone who will buy it even higher -- that's not why people acquire dollars, and I can see the ponzi scheme analogy. Ultimately, I'd say the reason the dollar has value is because the US Government charges taxes denominated in dollars, and accepts only dollars in payment of them.
yarg 5y ago
The US government does not actually have the monopoly. The Federal Reserve does. The Federal Reserve is not Federal - it is a private bank that mints the dollar, lends it to the government and charges them interest. (I'd really rather be wrong on this; but if I've just been listening to idiots on the internet, I'm sure someone's going to let me know.)
- JumpCrisscross 5y ago
  > US government does not actually have the monopoly. The Federal Reserve does The Treasury operates the U.S. Mint [1]. That said, most dollars are created privately by banks when they create deposits through their lending. The Fed oversees all of this while also creating dollars through similar mechanisms (albeit higher-powered ones). > Federal Reserve is not Federal - it is a private bank that mints the dollar The Federal Reserve was created by an act of Congress. Its leadership is appointed by the President. Its profits remit to the U.S. Treasury. It's a creature of the government in everything but name. [1] https://www.usmint.gov https://www.usmint.gov
  - yarg 5y ago
    And the member banks (genuine question)?
    - 8note 5y ago
      From 2008, it looks like they're subject to nationalization if the government wants
reedjosh 5y ago
> No, because it has uncapped supply. Dogecoin adds a fixed number of coins per year. At this point that fixed number is less inflationary than the USD by a large margin. That said, I'm more of a Monero and BTC guy myself. > For example, there are now 128 billion Dogecoins in circulation. The rate of increase in the number of Dogecoins, once mined, is no more than 5 billion per year. https://investorplace.com/2021/02/dogecoin-has-an-inflationary-supply-trait-making-it-ideal-as-a-cryptocurrency/ https://investorplace.com/2021/02/dogecoin-has-an-inflationa...
- rualca 5y ago
  > Dogecoin adds a fixed number of coins per year. At this point that fixed number is less inflationary than the USD by a large margin. That, alone, renders dogecoin unsuited as money. Money is, by definition, expected to be stable, not only to serve its purpose as a store of value but also as a standard of deferred payment.
  - reedjosh 5y ago
    With the fed itself acknowledging it's losing the battle to inflation--4.2% over the last year--then I'd say by your definition, that, alone, renders _dollars_ unsuited as money. https://www.bls.gov/opub/ted/2021/consumer-price-index-up-4-2-percent-from-april-2020-to-april-2021.htm https://www.bls.gov/opub/ted/2021/consumer-price-index-up-4-... And again, that's just the CPI. Many other metrics have it higher, and asset prices like housing have skyrocketed.
    - rualca 5y ago
      > With the fed itself acknowledging it's losing the battle to inflation--4.2% over the last year--then I'd say by your definition, that, alone, renders _dollars_ unsuited as money. It makes absolutely no sense to claim that a historical high inflation rate of 4.2% renders the dollar unsuited as money, when your everyday cryptocurrency, the so-called magic alternative to all money problems, sees far higher fluctations on a daily basis. Take dogecoin for example. Today alone dogecoin's price tanked 23%. That's a drop in a 24h period. This is the sort of argument that eats away the credibility of any argument made regarding cryptocurrencies as an alternative to money. It's pretty clear that we have a small army of early joiners eagerly awaiting to cash out and to ensure they keep the pumping part of the pump-and-dump scheme they make this sort of absurd claims that doesn't pass the faintest of scrutinies.

akarma 5y ago

> Dogecoin branded as Ponzi by the president of the Federal Reserve Bank of Minneaopolis. Important to note that this is the president of the Federal Reserve Bank of Minneapolis (misspelled in the article), not the Chair of the Federal Reserve, who leads what we generally think of as the "fed."

bena 5y ago
I noticed that too, but I don't think it really matters. Even if Jerome Powell came out every day just to say "Fuck Doge, it's a scam", the response from crypto enthusiasts would be "That's exactly what you would say"
- ffggvv 5y ago
  it’s not about enthusiasts. it’s about adoption by financial services firms and corporations. which will be affected by what the fed says
  - lallysingh 5y ago
    Of /Dogecoin/? This is going to result in more memes, possibly some decent puns.
    - ffggvv 5y ago
      of crypto in general. doge is irrelevant other than the fact it contributes to making all crypto seem like a joke
- willis936 5y ago
  While the conclusion that "Doge pumping is a scam" is very likely correct, the sentiment that an adversary can't give an unbiased opinion is also correct. I'd value the opinion of an expert with no skin in the game more.
  - lupire 5y ago

A4ET8a8uTh0 5y ago

It is overall very interesting. And accurate in my opinion. Current batch of cryptos are very much an MLM. And I am saying this is a quiet sympathizer of crypto ( you know - actual crypto currency intended to bypass old gatekeepers with all the benefits and threats coming with it ). As it stands right now, the ridiculous push for centralization and greater control is everything crypto was trying to undermine. It is possible that is emblematic of how we approach systems as a species, because everything seems to tend towards one or two major players. Right now only monero, and to a much lesser extent bitcoin, still resemble the original promise of crypto.

rafale 5y ago
Ethereum and smart contracts blockchain in general have real potential and utility imo. The use cases are still niche, but it's not a ponzi/MLM, not even close.
- lalaland1125 5y ago
  What would be an example of a smart contract that provides value compared to simpler/cheaper centralized solutions?
  - cma 5y ago
    There is probably a more advanced version of ransomware they can enable. The other big use case envisioned when they were conceived was automated payouts on distributed assassination markets, where several news articles about an assassination could trigger a payout.
    - lalaland1125 5y ago
      Yep. Smart contracts and cryptocurrencies really helped accelerate the ransomware market.
  - dcolkitt 5y ago
    When I bought my house, I paid the title escrow company thousands of dollars to perform a very simple service. Hold the deposit money in escrow, and release it specific parties based on certain conditions. There's no reason in the future why that service couldn't be performed by an off-the-shelf smart contract for essentially nothing. Home buyer sends deposit money to the contract. If buyer exercises a contingency before date M, release money back. If user doesn't, transfer funds to home seller. In case of dispute, defer decision to a pre-agreed upon adjudication agent and pay said agent to render a decision. There are so many stories like this in the plumbing of the financial system. It's ironic, because high finance is built upon layers and layers of complex abstraction. The way someone a sophisticated hedge fund decides how to allocates assets, hedge exposures, levers positions, manage risk, and execute trades is like something straight out of science fiction. But the way the money actually moves from point A to point B is stuck in the 19th century. It's hard to overstate how much of the value collected by the financial industry is actually just handling the nuts and bolts of physically moving money around in a trusted way. For every quant building a derivatives pricing model based on stochastic calculus, there's a dozen low-level clerks sending each other wire instructions by fax and filling out boilerplate KYC notifications.

chainwax 5y ago

*Federal Reserve Bank President _of Minneapolis_

sschueller 5y ago

So, in how much trouble is Elon now? Edit: not much I guess since this isn't the fed fed but the president of the MN fed.

paulpauper 5y ago
Likely none unless he manipulated price for financial gain

bena 5y ago

I mean, I'm not totally surprised, but I'm also not totally sure why it matters? It's not like crypto enthusiasts are going to take the word of someone working literally for the fiat system as anything but FUD.

paulpauper 5y ago

And crypto keeps falling . Given the poor performance and bariers of entry to ownership such as kyc, a diversified large cap tech portfolio is way better. There is no advantage to owning bitcoin over index funds unless you want to stash away money from law enforcement

nerdponx 5y ago

Is it a Ponzi scheme if nobody is actually orchestrating the scheme? What's the difference between a Ponzi scheme and a speculative bubble?

meh99 5y ago

I really don’t see how the nation isn’t a Ponzi scheme. We keep buying in with our time and being told there isn’t enough to go around when it comes to affording a life. I know the historical context for a Ponzi scheme is financial, but yesterdays definitions need not be our own.

lucasmullens 5y ago

Not mentioning "of Minneapolis" in the title makes this seem like a much bigger deal. I also don't trust an article about Minneapolis that spells it "Minneaopolis"

tomcooks 5y ago

So this is just weaponized clickbait I guess?

Shadonototro 5y ago

if doge is a ponzi, then every other coins should be branded the same way, i see no differences

SideburnsOfDoom 5y ago
I don't think that's in any way wrong. Yes, yes they are the same.
- incrudible 5y ago
  They aren't Ponzi schemes either, nor are they a type of fraud. Their continued rise in value may rely on "Bigger Fool Theory", but that is true for many other investments that aren't Ponzi schemes either. A Ponzi scheme doesn't require "bigger fools" or really any sort of fool. Many Ponzi schemes start out as honest investment offerings and only turn into fraud when the fund manager starts hiding their losses.
  - deleted 5y ago
    [deleted]
  - SideburnsOfDoom 5y ago
    IDK, literal definition of Ponzi or pyramid says it does require "bigger fools" plain and simple. You seem to be saying that the "too good to be true fund manager is hiding a Ponzi" doesn't require fools, because the Ponzi is well hidden. Hidden Ponzi is still a Ponzi, hiding it is a (another) financial crime; and "too good to be true" is still magnet to fools. The last customers will still eventually take the fall, that's the structure of a Ponzi whether they know it or not. None of this is relevant; You're talking about how not all quadrupeds are horses, the issue is if all these horses are quadrupeds. These coins continued rise in value (without anything underlying) while relying on "Bigger Fool Theory" is an example of a Ponzi and a fraud.
    - incrudible 5y ago
      What distinguishes a Ponzi scheme is that it promises returns that are paid out with money from new investors. What makes it a fraud is that the source of these returns is misrepresented. It is mathematically doomed to fail eventually. A commodity like cryptocurrency (or precious metal) doesn't have returns. It may appreciate, depreciate or maintain its value. If the only argument for its appreciation is that "some bigger fool than me will find it to be more valuable", then that still does not make it a Ponzi scheme, nor does it make it a fraud.

doggodaddo78 5y ago

Is the attack on all non-state currency-like instruments is they "require" new "investors" to prop-up the value? Isn't it the case that many speculators are attempting to monetize while it is ultimately a meaningful, useful currency-like instrument created accidentally? Even if it was created as a joke, it's still useful if it can be transactionalized for commerce.

RivieraKid 5y ago
Crypto will never be competitive with official government currencies, it has almost no advantages except rare situations. Official currencies are stable and extremely low-risk. This is only possible thanks to the monetary policies of central banks. Bitcoin can never have this level of stability or safety, because there's no central authority which manipulates the price.

Ekaros 5y ago

So Bitcoins next and when Ethereum? I do not see any fundamental difference between them and Doge. Just because token was made as comment, should it be treated any different?

the-dude 5y ago

Incumbent slams newcomer. News at '11.

endisneigh 5y ago

The fact that none of the top 3 cryptocurrencies are inflationary tells you everything you need to know about the motivations of the early adopters. I do wonder what effect this opinion will have in the next 12 months for DOGE.

echelon 5y ago
> The fact that none of the top 3 cryptocurrencies are inflationary tells you everything you need to know about the motivations of the early adopters. The fact that they think their crypto is more important than democratic government sovereignty tells you the rest. It's the moral equivalent of "I got mine, screw you". Why should the crypto whales be in charge? Who elected them? What good do they do for the rest of us? Crypto doesn't pave the roads, feed the poor, or invest in university science R&D. Instead it wastes energy, causes GPU shortages, peddles away the brains of brilliant engineers on useless tech, and creates incentives for more ransomware. These folks are hoarding digital Beanie Babies and touting it as the next coming Messiah. What they're really thinking is how rich they'll be if we all fall for the same trap. Bitcoin sucks. edit: to respond to a followup comment: > The fact the parent post has already been modded down is what pisses me off about the crypto currency world The thing that gets me is that two downvotes tripped HN's anti-flame/anti-spam filter, and now I can't comment anymore. Whatever. I'm not convincing anybody with strong convictions. My arguments are valid (and not unique to me), and I hope they spread to the broader public.
- Taek 5y ago
  The beauty of crypto is that you can elect which ecosystem you participate in. If you don't like bitcoin because it's dominated by whales, go to eth. If not eth, try doge or Monero. Or start your own. It's pretty easy to move money between cryptos, that you only hold Monero and your friends only holds doge does not stop the two of you from transacting
  - echelon 5y ago
    > The beauty of crypto is that you can elect which ecosystem you participate in. The beauty of fiat is that the government can print more, if needed, and can tightly regulate monetary supply to increase the health of our economy and breadth of our trade. The FBI and CIA can monitor who transacts and can shut down hackers and terrorists. I can also elect the people in charge of the system so that they can create more opportunity. > If you don't like bitcoin because it's dominated by whales, go to eth. If not eth, try doge or Monero. Bitcoin makes the Winklevosses richer. Ethereum makes Buterin richer. Everyone hawking this is getting richer, but nothing worthwhile is being done. > Or start your own. What the hell good does that do? I'd rather use my life to solve real problems. I want to make creators more money, increase the amount of art in the world, and eventually work on solving cancer and metabolic diseases. I don't have time for this garbage, and neither does the rest of the world. It's wasted compute, both in terms of GPU and brain cycles. > It's pretty easy to move money between cryptos, that you only hold Monero and your friends only holds doge does not stop the two of you from transacting I can already move money. What problem is being solved? Maybe this is great if I want to illicitly move money or dodge taxes. I don't see any other reason for it.

cryptica 5y ago

>> Literally, people have been fleeced for tens of billions of dollars Fiat money printing has been fleecing me for over a decade. I've had to endure my salary being held down while rent prices kept going up and I was forced to change companies many times in desperate attempts to get a raise. I even had to change countries, leave most of my family behind to just to try to keep up with inflation so that maybe one day I will be able to buy a simple house and not be enslaved to a landlord. I agree that most cryptos currently are garbage but it's not fair to call out crypto for fleecing people out of their hard earn money when global reserve banks are doing the same on a much larger scale. Please consider how hopeless many millennials feel right now being stuck having to choose between different pyramid schemes. As non-meritocratic as crypto space might seem, so far it's the only place where I was able to achieve any sort of success as a software developer. The fiat corporate ponzi is the least meritocratic ponzi of all.

endisneigh 5y ago
your comment makes absolutely no sense. rent prices going up has nothing to do (directly) with fiat. your lack of wage increases also is not a problem inherent to the use of fiat.
- cryptica 5y ago
  As reserve banks print more money, the money supply expands, this means more fiat chasing fewer goods. This is what makes house prices go up, which leads to increasing rent prices (real estate investors need the rental income to cover their mortgage repayments). Salaries, on the other hand, are negotiated up front and sometimes not re-negotiated for years... In the meantime, the currency is inflating (losing value, prices of everything going up). So by the end of the year, your salary buys you less than what you had negotiated at the start of the year. Some companies offer 2% salary increase per year; this is not enough to cover real inflation. By many accounts, the real inflation is much higher than that; the basket of goods to measure inflation has been manipulated over the years to make inflation seem smaller than it actually is. So even in those cases, employees are losing buying power over time. Besides, inflation is not a single number. Different items inflate at different rates. Money printing is creating wealth inequality which means that goods which appeal to wealthier individuals (such as real estate and other assets which provide financial independence) inflate faster than goods which appeal to the average person (which merely have survival utility).

narrator 5y ago

This is just a bunch of bluster. The FED isn't the SEC. They don't have a law enforcement division or anything like that with guns and badges. Some guy got in a car accident(Lewis v. United States)[1] with some Federal Reserve employee and tried to sue under the Federal Tort Claims Act, which allows the federal government to be sued for certain things, like car accidents, as they are normally subject to sovereign immunity. The judge said this didn't apply to the Federal Reserve because they aren't a federal agency. There is actually a long interesting argument in the case by the judge about why the Fed is not a federal agency. They can hire and fire employees at will, their workers are not in the civil service pension program, they get workers compensation, they receive no appropriated funds from congress, they can sue and be sued under their own name, etc. [1] https://openjurist.org/680/f2d/1239/lewis-v-united-states https://openjurist.org/680/f2d/1239/lewis-v-united-states

nroets 5y ago
Which is a good thing because it also makes them more immune to political pressure to overstimulate the economy.
dcolkitt 5y ago
> They don't have a law enforcement division or anything like that with guns and badges. What's interesting is that they're probably one of the only few federal entities without at least a small attached police force. Even NASA and the Department of Education have their own police.
- cashewchoo 5y ago
  A federal reserve police force would open some interesting additional avenues for affecting interest rates outside of open market operations... (this is a joke)
- retzkek 5y ago
  But they do: https://en.wikipedia.org/wiki/Federal_Reserve_Police https://en.wikipedia.org/wiki/Federal_Reserve_Police

anm89 5y ago

Jeez louise. I guess I give up on my stop misusing the term Ponzi scheme rant. Doge is all sorts of terrible things but it does not meet the traditional technical definition of a ponzi scheme when all of the gains to investors are generated via sale of assets on the open market and they have been totally honest about the nature of the asset from day one (it's a joke, it's a toy, don't take it seriously), and there is no structure of payouts that ensures that money from specific investors gets funneled to other specific investors based on seniority. It literally meets none of the criteria except for the sole fact that people that bought early made money(which is true of literally any asset that has gained in value over a time period). But I guess Ponzi has been officially redefined to "speculative asset that is in a bubble" at this point if that's what the regulators are going with. Except what do you call the thing Bernie Madoff did now? Because that had nothing to do with "speculative asset in a bubble".

paulpauper 5y ago
At this point the term is thrown around so loosely as to be meaningless
- dmingod666 5y ago
  Kind of like 'hacker' now can apply to someone learning html.
lupire 5y ago
It's also a scheme in which early investors are paid by later investors, not by any form of value creation. The missing part is just the central administrator. A actual ponzi scheme could be called "classical ponzi scheme"
- Sammi 5y ago
  Doge is a joke that you can own, just like a Weird Al Yankovic CD. It has the same value.
  - 5y ago

hans1729 5y ago

>“Maybe five years from now or 10 years from now or 20 years from now something useful will emerge from this, but so far, all that’s emerging is burning garbage,” Kashkari said. I would love to hear Vitalik Buterins take on this. After listening to him for a while, I got very humble with respect to the ideas of crypto, the abstraction of value etc. - of course the world of crypto is dominated by pump and dumps at the moment, but I'm not convinced that that's all there is to see. I think that crypto will reshape the world of money, just not in the terms that money is being thought off right now. If that assumption holds, most people would be unable to see the forest for the trees.

beambot 5y ago
> If that assumption holds, most people would be unable to see the forest for the trees, maybe even the president of the fed of minneapolis. It reminds me of living through the early www. We went from "who would ever buy books online?!", to DotCom euphoria, to market crash, to a long-term recovery, to a thriving internet economy. Some of the largest companies on the planet were created during the initial heyday period. Their trajectory was very non-linear, but they've had tremendous impact.
- echelon 5y ago
  WWW: April 30, 1993 (28 years, 2 months) Bitcoin: January, 2009 (12 years, 5 months) In two more years, we'll be just about halfway there. I think the internet had far more apparent uses at 12 years (2005) than bitcoin has now.
  - beambot 5y ago
    Time constants on innovation rarely translate across domains. Look at adoption times for bank notes to central bank (i.e. federally-backed) fiat. Or adoption and discontinuation of the gold standard. TLDR: I would expect the time constant for money to be longer than the www.
  - WalterSear 5y ago
    The internet is far older than the WWW, fwiw. The first online commercial transaction was performed in 1971. https://www.fastcompany.com/3054025/youll-never-guess-what-the-first-thing-ever-sold-on-the-internet-was https://www.fastcompany.com/3054025/youll-never-guess-what-t...

josh2600 5y ago

I mean it's not a Ponzi scheme in that there isn't a 'borrow from peter to pay paul' kinda thing happening. It's actually just a kinda weird lottery with manipulable game theoretical rules. I think of a Ponzi as a scheme where someone is managing the game and intentionally defrauding new investors to pay old ones demanding redemptions. In the case of Doge no one party is managing the game and it's not even clear that there's any coordination amongst the large players. Again, at best it's a kind of game of chance with ill-defined rules. I still think it's worthy of condemnation as lotteries should have well-defined rules, IMHO, but that's an aesthetic issue. I'm only objecting to the specific use of the term Ponzi which I don't think applies here (and we should be specific with our language lest we lose our ability to define things sufficiently).

NickM 5y ago
I think of a Ponzi as a scheme where someone is managing the game I agree, but there's also not really a better word to describe something that is like a Ponzi scheme in every respect except the lack of central coordination. Having a distributed hive mind of people all collectively trying to pump the value of a coin basically yields the same end result as a conventional Ponzi scheme, but makes it much harder to regulate or shut down. Even worse is the fact that many of the people involved truly believe in their own evangelism, and don't realize that they're part of a negative-sum game. With the amount of value destroyed via mining, and the lack of any new value being created by the people investing in crypto, there will inevitably be more losers than winners in the long run, but that doesn't stop people from spouting HODL memes because they genuinely think that value is being created from nothing and that everyone is somehow going to get rich off of this stuff.

lupire 5y ago

Article is pretty poor, but the original source is pretty simple, and quote bizarre in context: https://www.linkedin.com/posts/paul-grewal-288978b4_grabbing-a-taco-at-lunch-today-i-was-in-activity-6809628094991880192-jlky/ https://www.linkedin.com/posts/paul-grewal-288978b4_grabbing...

Ekaros 5y ago
I wonder that too, it's a joke, but context where the Neel is answering is rather strange...
lvs 5y ago
Look at the millions of words pointlessly spilled across the internet over a throwaway comment on a message board.

orblivion 5y ago

Doge reddit is full of the same memes every day encouraging people to keep HODLing, stop complaining, and "do you think Doge will hit $10?". Something does feel off about all this.

runbathtime 5y ago

Ponzi's themselves are not illegal, but a descriptive term. I think what makes a ponzi scheme illegal is the existence of fraud, or lying about where the returns come from, not necessarily where the returns come from.

detaro 5y ago
A descriptive term for a type of fraud.
- runbathtime 5y ago
  Where are the returns coming from? Is it a productive activity? Or are you making returns from others coming in and buying at a higher price? This can describe people pushing stocks not because the business is profitable, but because they say the price will go up. What makes this illegal? I think it comes down to lying or fraud, which is already illegal. What makes crypto interesting is there isn't one person to point to, but everyone out there promoting it is like running their own ponzi because they only profit by convincing someone to buy in a higher price than them. Also in crypto, you can say bitcoin is going to 1 million and it is taken seriously so how do you this a lie? Also, it might get there in the future. It has to be about why the crypto is going up and that is tricky. Can you lie by omission, because in a ponzi if you don't say how the returns come, is that still a ponzi? If you just say, this is going to the moon, and people believe you, is that a ponzi? Ultimately, all legitimate returns (investing) come from productive activity. Gambling comes from ponzi like dynamics. Gambling that the stock goes higher, trading, etc. This is all about returns from other people, not from productive activity of the underlying. I think this ponzi is not illegal as long as there is no lying about where returns come from. Perhaps these activities shouldn't be allowed to use the word investment. Because it is so hard to think about, I don't think it makes since to call them a ponzi. I think it makes since to explain to people you are gambling, not investing, and it will eventually not be sustainable, but crash back to fair value, which most of crypto's case is slightly above zero. I think with crypto there is a lot of misdirection, fraud, lying, but it is very difficult to prove. The SEC can't even figure out what a security is.... Because crypto has no intrinsic value, predicting crazy prices are ridiculous. It is all based on speculation. Most people know there isn't a company behind it making profits and they know that some people got lucky and bought in way lower than them. This is known. What may not be known is basic financial literacy and people who know better that do not tell the truth because they can make more money confusing and pumping crypto to the moon. Most people who know it has ponzi dynamics do not care, most people like ponzis, know the risks, and still want to play. Crypto makes ponzi games more fair.

m1117 5y ago

So is everything, as long as everyone accepts it it's good?

29athrowaway 5y ago

The creator of doge cashed out of it years ago to buy a Honda Civic. So clearly it is not a Ponzi scheme. Having long term capital gains is not a Ponzi scheme in itself. Are there other issues like pump and dumps? there might. But that is different to a Ponzi scheme. A general piece of advice.... Just ignore everyone trying to get you to "yolo" or "hodl". If you buy or hold and someone else sells, they win at your expense.

chad_strategic 5y ago

It always seems to me the Federal Reserve is largest Ponzi scheme that has gone unreported since 1913?

chad_strategic 5y ago
Down voters: Please make sure you truly understand the concept and history of money, currency, fiat currency, gold and how the Federal Reserve actually works and is structured. FOMC board members are not elected by the people, yet they control interest rates and the money supply. They are not the federal government and they maintain their own balance sheet of debt. They do have a little oversight from Congress but well Congress likes low interest rates. When low rates become a problem, they will more than likely be out of the office. They also allow America to finance our endless wars with low interest rates. Digital currency are the product of governments debt load and overspending. Feel free to pick up a good book on prime day: https://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve https://www.amazon.com/Creature-Jekyll-Island-Federal-Reserv...
echelon 5y ago
The fed has nukes and a blue water navy. Not to mention millions of hard-working citizens solving the world's problems.
- deleted 5y ago
  [deleted]

incrudible 5y ago

"The reason that the dollar has value is because the US government has a legal monopoly on producing the dollar." That's a completely ridiculous statement, coming from none other than Neel Kashkari. These are the people in charge of your currency, desperately trying to convince you that the money they created out of thin air is more sound than a joke currency created after an image of a dog.

lupire 5y ago
He said the dollar has value, not that it is sound. If you think you understand better than a leading professional in the field, you might be the mistaken one.
- clipradiowallet 5y ago
  > If you think you understand better than a leading professional in the field, you might be the mistaken one. I don't understand professional baseball, but if the owner of a team says "my pitchers are the BEST" - I can call "bullshit" on them without actually knowing if his pitchers are the best. It's in his best interest to say his pitchers are the best, even if they are not. He owns the team, and his livelihood is linked to the efficacy of his pitchers. This MN reserve employee has the same link between his livelihood and perceived value in the US dollar. tldr; the "professional" making the statement is heavily biased.
- incrudible 5y ago
  > He said the dollar has value, not that it is sound. He gave a completely ridiculous reason why the dollar has value. It's along the lines of "Bitcoin has value because it is scarce and hard to create". It's a non-sequitur. It's also ignoring that 90% of the money supply is not created by the government. Perhaps he wanted to sanitize the following argument: Each year, there's a lot of people that owe a certain amount of dollars to the US government. If they don't find those dollars, they could end up in jail. This is a valid reason why the US dollar has natural demand and thus is valuable. > If you think you understand better than a leading professional in the field, you might be the mistaken one. That's not what I am saying. I'm pretty sure he knows better, but he is lying to you with a straight face. That's part of his job.

cblconfederate 5y ago

That is so wrong. It is dog money https://www.youtube.com/watch?v=cbI31x3FpS0 https://www.youtube.com/watch?v=cbI31x3FpS0 But in all seriousness, what are the odds that all the various pump-up schemes, from tesla to coins are another trick of the US to funnel the worlds money into their territory?

jtbayly 5y ago

The most interesting part was the question of how to pronounce it... I'm not sure why Doggy-coin didn't make the cut. That's honestly how I thought it was pronounced.

passwordreset 5y ago
It didn't make the cut? It certainly should have. I vacillate between Doggy-coin, and using a long O, something like DOE-gee-coin (as in "Get along, little doggies", which is sometimes sung with a long O). The use of Doje-coin always seemed silly. The mascot is a friggin dog, not a doje or a dozh, whatever those nonsense words mean. Stick with Doggy-coin, it make the most sense.

tibbydudeza 5y ago

Obiwan Elon - you are our only hope !!!!.

tus89 5y ago

Don't ponzi shemes need to pay out early investors (usually with the money from latter investors)? No-one is paying out Doge buyers, except those who choose to buy their coins from them. Speculation bubble =/= ponzi scheme.

scottmsul 5y ago
Yes, people misuse the terminology to make it sound more negative than it is

garyrob 5y ago

Cryptocurrency technology has utility which has not been fully exploited yet. At present, the two variants with the most market cap, Bitcoin and Ethereum, do have reasons to exist. (Which, again, involves some present utility but more future utility.) Bitcoin has earned a certain degree of trust that value moved into that form will continue to exist, just because there is so much distributed hardware behind it that it would be hard for a bad actor to compromise it. It's not impossible, but there is a certain amount of utility there. Ethereum also has earned a certain amount of trust which, today, is based on hardware, but within the next year will be based on Proof of Stake, with many billions of dollars in stake. (The amount of trust it will receive will depend on how decentralized the stakers turn out to be.) But it also has "smart contract" capabilities. It has speed and expense limitations but those will be lessened over time with sharding, rollups, etc. There are newer crypto technologies that may overtake those leaders in market cap, or may not. In any case, there is utility to these technologies. Because of that utility, some portion of the world's currency supply should be in the form of cryptos in order for the world to get maximum benefit. Say that is X% for a particular cryptocurrency. (Remember, BTC and ETH have somewhat different roles and so may be able to coexist.) Then the value of a coin should be X * .01 * (the total value of the world economy) / (the number of coins). That's not a Ponzi scheme at all. What is happening is that the world is moving slowly, in fits and starts, toward the discovery of the numerical value X for each coin. On the other hand, DOGE really does not provide utility that isn't being provided by more trustable cryptocurrencies, i.e. others are more likely to stick around for the long haul without crashes making the coin asymptotically approach zero in value. So, it really doesn't have the same kind of reason to exist. It's more like the Dutch tulip craze. It doesn't seem to fit the technical definition of "Ponzi scheme," but that label does capture the fact that its price is only what it is because of previous buyers. [Update: edited to point out more explicitly that a lot of the utility is future utility. I say a little more about that in a thread below.]

mdoms 5y ago
> Cryptocurrency technology has utility which has not been fully exploited yet. Such as? Name one thing.
- 5y ago

excalibur 5y ago

Pot, kettle.

deleted 5y ago

[deleted]

bborud 5y ago

Any sufficiently confusing financial scheme is indistinguishable from fraud.

mrkramer 5y ago

I guess we should stop calling them cryptocurrencies because they are not used as currencies as USD or Euro are. We should call them fungible tokens since we already have non fungible tokens thing. Fungible tokens such as Pokemon or Yu-Gi-Oh cards which we trade and exchange for fun and profit.

EGreg 5y ago

Everything is a ponzi scheme, the only question is whether the speculative bubble is the majority of the value. The "use value" of a house is living in it. The "market value" from the housing market speculation may be multiples of that. There are two sectors in the economy... the productive one, which creates wealth for society (startups, new technology, reusing what works, cross pollination, economies of scale) and then there is the zero-sum one (exchanges, trading). Sure, it may enable more efficient capital allocation and help society somewhat, but over time, with financial derivatives, most of it is just a giant casino. When you come into a casino, and walk away with more dollars than you came in with, someone necessarily walks away with less. The casino doesn't print dollars. Same here. The exchanges don't issue dollars (they aren't banks, after all ;-) ... so for someone to win X, someone has to lose X. Have fun losing to the institutions. The investing game is over in whatever assets already appreciated 50,000% .. move on to newer projects, and better yet, try to focus on that first sector of the economy, the one that actually helps society!

Rapzid 5y ago

I feel like this will be the defining legacy for the current "age" of cryptocurrency. We didn't figure out how to actually distribute control and power, but heck if we didn't figure out how to distribute accountability!

joelbondurant 5y ago

USD is a terrorist ponzi.

runbathtime 5y ago

Here is the best, concise explanation that I have found for the nature of a ponzi scheme and the bigger fool theory. Professional of Finance - John Zdanowicz https://www.youtube.com/watch?v=fZ4VQyhQ3Q8 https://www.youtube.com/watch?v=fZ4VQyhQ3Q8