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It's a decentralized Ponzi scheme. That's the real magic of the blockchain: diffusion of responsibility. Nobody's guilty if everyone is. The overwhelming major

It's a decentralized Ponzi scheme. That's the real magic of the blockchain: diffusion of responsibility. Nobody's guilty if everyone is. The overwhelming majority of the liquidity and price action is driven by Tether which of course is backed by thin air. This fake money is used to pump up the price to drive in real money which can then be used to pay off the earlier investors. Taken in isolation no part of the system individually forms a classical Ponzi scheme. However, put the pieces together and it start to look awfully suspicious.

reedjosh 5y ago
The stock market is pumped up by dollar printing, but nobody calls the S&P a Ponzi scheme, because again, nobody lied. > The overwhelming majority of the liquidity and price action is driven by Tether which of course is backed by thin air. Would you please elaborate on the connection between Doge and Tether? I can get Doge without ever using Tether. Not that I have any Doge.
- arcticbull 5y ago
  > The stock market is pumped up by dollar printing, but nobody calls the S&P a Ponzi scheme, because again, nobody lied. That's not really how the financial system works. Money enters circulation when someone takes out a loan. It leaves circulation when that loan is repaid. It is low interest rates that cause an increase in asset values. > Would you please elaborate on the connection between Doge and Tether? Tether is 65% of the liquidity in the entire crypto space. Check out the chart for Bitcoin, I think it's even higher for alts but the DOGE coinlib chart isn't right today. [1] > I can get Doge without ever using Tether. Not that I have any Doge. That's my point, USDT is printed - unbacked - pushing the price of Doge up, which drives retail enthusiasm, and retailers then purchase Doge with real dollars. There's other schemes too, I mean, at one point in 2017 99% of all of the world's Litecoin trading volume was two bots at Coinbase trading back and forth between eachother. [2] [1] https://coinlib.io/coin/BTC/Bitcoin https://coinlib.io/coin/BTC/Bitcoin [2] https://www.complianceweek.com/regulatory-enforcement/cftc-fines-coinbase-65m-for-inaccurate-reporting-wash-trading/30184.article https://www.complianceweek.com/regulatory-enforcement/cftc-f...
  - reedjosh 5y ago
    > That's not really how the financial system works. Money enters circulation when someone takes out a loan. It leaves circulation when that loan is repaid. It is low interest rates that cause an increase in asset values. But unlike me and my credit lines, the US Gov has no credit limit. It's akin to printing, since it takes out new loans to service its current debts and operational expenses. The FED is mandated to purchase US bonds. I do think you make a good point about Tether artificially inflating the price, but I do see that as Tether's issue. Not that it won't tank crypto prices, just that it's not Doge that's fraudulent.
    - arcticbull 5y ago
      > But unlike me and my credit lines, the US Gov has no credit limit. It's akin to printing, since it takes out new loans to service its current debts and operational expenses. I think that's partially true. For the most part debt isn't held at the Fed, and in steady state the Fed unwinds their balance sheet over time. They hold $4.5T - a lot by any measure - but not out of the $28T total outstanding. The majority of that is held domestically by US entities. The next major holder is Japan. The Fed isn't mandated to purchase bonds, per se, they have the ability to should circumstances necessitate. Their mandate is to maximize employment in the United States and to maintain a low, predictable rate of inflation. They have this tool in their chest to achieve these goals. The US government has "no credit limit" in the same way your Amex charge card has "no credit limit." It's limited in how much it can borrow by its ability to service debt and also its ability to find new holders of its debt. That's not limited per se, but it's certainly not unlimited either. After all a loss in confidence would lead to buyers demanding higher interest rates which could be catastrophic.
    - ac29 5y ago
      The US government does have a credit limit (one that can be changed by congress, though): https://en.wikipedia.org/wiki/United_States_debt_ceiling https://en.wikipedia.org/wiki/United_States_debt_ceiling And, it has nearly been reached quite a few times causing fun things like furloughs and government shutdowns of various degrees.
zahrc 5y ago
If it’s decentralised, it’s not a Ponzi scheme, by definition. Where are the guaranteed returns? Where’s the person taking money from one, giving it to the “last” investors? Where’s the fraud? Doge is a joke, and that’s not a secret.
- Spooky23 5y ago
  What is Mr. Musk doing with his DOGE after pumping it?
  - zahrc 5y ago
    He neither owns DOGE nor does he have his own exchange. He and everyone else is abusing DOGE as a pump and dump, which it even wasn’t designed for, as it was just a joke. It attracts pump and dumb schemes, but it’s not a Ponzi scheme, those are very different things.
basch 5y ago
To the OP point, that's just not a ponzi scheme. If the early investors were getting some kind of dividend that was actually just new investor inflows repurposed, then sure. But something with an advertised market value, that is just people buying and selling the shares, is not a ponzi scheme by itself. It's just misuse of the word. Pump and dump, sure. Ponzi scheme, no.

reedjosh 5y ago

The stock market is pumped up by dollar printing, but nobody calls the S&P a Ponzi scheme, because again, nobody lied. > The overwhelming majority of the liquidity and price action is driven by Tether which of course is backed by thin air. Would you please elaborate on the connection between Doge and Tether? I can get Doge without ever using Tether. Not that I have any Doge.

arcticbull 5y ago
> The stock market is pumped up by dollar printing, but nobody calls the S&P a Ponzi scheme, because again, nobody lied. That's not really how the financial system works. Money enters circulation when someone takes out a loan. It leaves circulation when that loan is repaid. It is low interest rates that cause an increase in asset values. > Would you please elaborate on the connection between Doge and Tether? Tether is 65% of the liquidity in the entire crypto space. Check out the chart for Bitcoin, I think it's even higher for alts but the DOGE coinlib chart isn't right today. [1] > I can get Doge without ever using Tether. Not that I have any Doge. That's my point, USDT is printed - unbacked - pushing the price of Doge up, which drives retail enthusiasm, and retailers then purchase Doge with real dollars. There's other schemes too, I mean, at one point in 2017 99% of all of the world's Litecoin trading volume was two bots at Coinbase trading back and forth between eachother. [2] [1] https://coinlib.io/coin/BTC/Bitcoin https://coinlib.io/coin/BTC/Bitcoin [2] https://www.complianceweek.com/regulatory-enforcement/cftc-fines-coinbase-65m-for-inaccurate-reporting-wash-trading/30184.article https://www.complianceweek.com/regulatory-enforcement/cftc-f...
- reedjosh 5y ago
  > That's not really how the financial system works. Money enters circulation when someone takes out a loan. It leaves circulation when that loan is repaid. It is low interest rates that cause an increase in asset values. But unlike me and my credit lines, the US Gov has no credit limit. It's akin to printing, since it takes out new loans to service its current debts and operational expenses. The FED is mandated to purchase US bonds. I do think you make a good point about Tether artificially inflating the price, but I do see that as Tether's issue. Not that it won't tank crypto prices, just that it's not Doge that's fraudulent.
  - arcticbull 5y ago
    > But unlike me and my credit lines, the US Gov has no credit limit. It's akin to printing, since it takes out new loans to service its current debts and operational expenses. I think that's partially true. For the most part debt isn't held at the Fed, and in steady state the Fed unwinds their balance sheet over time. They hold $4.5T - a lot by any measure - but not out of the $28T total outstanding. The majority of that is held domestically by US entities. The next major holder is Japan. The Fed isn't mandated to purchase bonds, per se, they have the ability to should circumstances necessitate. Their mandate is to maximize employment in the United States and to maintain a low, predictable rate of inflation. They have this tool in their chest to achieve these goals. The US government has "no credit limit" in the same way your Amex charge card has "no credit limit." It's limited in how much it can borrow by its ability to service debt and also its ability to find new holders of its debt. That's not limited per se, but it's certainly not unlimited either. After all a loss in confidence would lead to buyers demanding higher interest rates which could be catastrophic.
  - ac29 5y ago
    The US government does have a credit limit (one that can be changed by congress, though): https://en.wikipedia.org/wiki/United_States_debt_ceiling https://en.wikipedia.org/wiki/United_States_debt_ceiling And, it has nearly been reached quite a few times causing fun things like furloughs and government shutdowns of various degrees.

zahrc 5y ago

If it’s decentralised, it’s not a Ponzi scheme, by definition. Where are the guaranteed returns? Where’s the person taking money from one, giving it to the “last” investors? Where’s the fraud? Doge is a joke, and that’s not a secret.

Spooky23 5y ago
What is Mr. Musk doing with his DOGE after pumping it?
- zahrc 5y ago
  He neither owns DOGE nor does he have his own exchange. He and everyone else is abusing DOGE as a pump and dump, which it even wasn’t designed for, as it was just a joke. It attracts pump and dumb schemes, but it’s not a Ponzi scheme, those are very different things.

basch 5y ago

To the OP point, that's just not a ponzi scheme. If the early investors were getting some kind of dividend that was actually just new investor inflows repurposed, then sure. But something with an advertised market value, that is just people buying and selling the shares, is not a ponzi scheme by itself. It's just misuse of the word. Pump and dump, sure. Ponzi scheme, no.