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You're talking about fixed or restricted-supply cryptocurrencies, which do indeed almost always have some Ponzi aspect. These might represent a majority of the
by leppr 5y ago
You're talking about fixed or restricted-supply cryptocurrencies, which do indeed almost always have some Ponzi aspect. These might represent a majority of the current cryptocurrency landscape, but isn't close to being a fundamental truth.
Algorithmic stablecoins like RAI[1] don't have a Ponzi component to them, for instance. You use the dApp and that's it.
[1] https://reflexer.finance https://reflexer.finance
- arcticbull 5y agoIt's Russian Nesting Ponzis. Reflexer is collateralized by ETH which is traded 65% of the time against USDT which is backed by chewing gum and hope. This USDT trading determines the price of ETH which in turn determines the collateralization rate of RAI.
- Y_Y 5y agoa.k.a Matryoshka Pyramid, Financial Sierpiński
- arcticbull 5y agoThose are both brilliant, btw.
- leppr 5y ago> Reflexer is collateralized by ETH which is traded 65% of the time against USDT which is backed by chewing gum and hope. This USDT trading determines the price. What kind of logical fallacy are you trying to make here? If someone sets up an exchange for bananas/pokemon cards and it ends up grossing a majority of the global banana trading volume, that doesn't mean the price of bananas is suddenly backed by pokemon cards. Furthermore, the mechanism through which Reflexer maintains the stablecoin's price is independent from the collateral asset. It works just as well whether the collateral asset is traded against USDT or fiat.
- solveit 5y agoNo, but if you had a banana farm you would be very very wary of pokemon cards turning out to be a ponzi. Bananas are nice and would be worth something regardless, but would they be worth quite as much if people weren't fraudulently printing pokemon cards to buy bananas? How much of the perceived value of bananas is a mirage caused by fradulent pokemon cards? We may never know before the house of pokemon cards collapse and the rubble clears.
- ALittleLight 5y agoWhat's the point of a stable coin? I have to trust some entity to hold collateral, so it's basically an unregulated bank?
- leppr 5y agoYou're talking about voucher tokens (Tether, Circle, Paxos...) redeemable for stable currencies. That's not what I'm talking about.
- piva00 5y agoIt'd be better for the discussion if you expanded on what your jargon means when someone doesn't understand it. Your comment is more of a conversation stopper...
- leppr 5y agoThe base meaning of stablecoin is simply a coin which has a stable value. The mechanism through which that stability is achieved is often 1:1 redeemability for another stable asset through a central portal, but that's orthogonal to the concept of a stablecoin itself. I didn't feel the need to expound on this as I specified "algorithmic stablecoin" in my comment and provided a link to the project's homepage which features a short FAQ entry answering that very question: > RAI is actually one of the first stablecoins. What most people call "stablecoins" are actually pegged coins. Pegged coins are oscillating around a specific value (usually pegged to fiat coins such as USD, EUR etc). RAI, on the other hand, is not pegged to anything. The system behind RAI only cares about the market price getting as close as possible to the redemption price.
- anunnymouse 5y agoThis guy uses big words like expound and orthogonal.
- imtringued 5y agoI'll keep it short. RAI is very hard to understand. If people around you are confused it is perfectly natural.