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It's way more ethical for people across the world, primarily in 3rd world countries, to be able to share in the success of a company via its tokens than just be

It's way more ethical for people across the world, primarily in 3rd world countries, to be able to share in the success of a company via its tokens than just being mined for data so some asshole in San Francisco can be paid 10 million dollars a month in rent.

stathibus 5y ago
Ponzi schemes don't become ethical when they temporarily enrich people who are lower on the economic totem pole. I would argue they actually become less ethical.
- adnzzzzZ 5y ago
  People sharing in the success of a new company is not a ponzi scheme. If a company is started from nothing, is providing value, and early adopters are paid with tokens as a way to jump start the business the tokens are simply being used to extract future value into the present. In some cases there's no actual value in the future because the product isn't good, but that doesn't make it a ponzi scheme, just a poor business.
  - hobs 5y ago
    "Providing value" is doing some serious heavy lifting in that sentence - MLM/Ponzi schemes can definitely argue they "provide value" and its telling that its your metric for not being a con. In a traditional ponzi scheme many people get paid, until the last people are left holding the bag.
    - adnzzzzZ 5y ago
      As a video game maker myself I'd say that video games generally provide value. If this particular video game provides as much value as its valued at is not for me to decide, but for the people who play it and invest in it.
      - smoldesu 5y ago
        "As a tupperware party host myself, I'd say that tupperware generally provides value. If this particular piece of plastic provides as much value as it's valued isn't for me to decide, but the friends and family I invite to the party." Doesn't quite have the same ring to it, does it?
      - meheleventyone 5y ago
        What if the only value is speculation or rent seeking on people that are poor? It’s already the case that the pay to earn economy crashed deeply. You keep saying value but without saying what that value actually is. Until a Ponzi scheme crashes everyone in it thinks it’s providing value after all. As a videogame maker myself I’d rather give my games away for free than setup the kind of economic trap Axie has.
        zenplant 5y ago
        Axie may have done it wrong, but the concept of in game currency has been shown to be wildly lucrative in the past. Let's take Valve as an example. You get a CS:GO knife you're sometimes able to sell that for a large chunk of money. Valve takes a gigantic cut of any of those transactions, and then the money can only be used to buy further products from them. Is that more ethical than what Axie is doing? Wouldn't it be neat if instead of "valve fun bucks" it were real world money that players could pay their rent with? If someone does this correctly it could end up being a very good thing IMO.
        hobs 5y ago
        Co-opting an existing player base to inject capitalism in it has flooded the market with bots, trade scams, and constant annoying spam "hey do you still want those headphones? how about that group?" The only people who benefit from the CS:GO knives are the ones who are extremely lucky or constantly performing economic activity at the expense of the community, its not good.
        meheleventyone 5y ago
        Stuff being wildly lucrative isn’t necessarily a great benchmark. On paper at least Axie has been wildly lucrative. Being wildly lucrative for some people who can pay their rent doesn’t make it moral either. As my sibling comment notes there’s also no free lunch and the lucrative for some people part has negatives for the rest of the player base. That said I have nothing against player made cosmetics being sold but there are much more obviously equitable ways of doing that. And then the elephant in the room that cosmetics are not game affecting and there is utterly no reason to use a blockchain for any of this.
sailingparrot 5y ago
There is no “success of the company that you can share in”. This is a zero sum game: as long as more people buy tokens to get in the game, then it continue going up, and every one feels like they are getting richer. But anyone selling their tokens is taking money out of the system, from all the players. If everyone sell their tokens, there will be exactly the same amount of money that comes out than that went in, just redistributed differently amongst the players, some will lose some will win. That’s what makes it a Ponzi scheme. The real winners here are the company behind Axie and the people like the guy from the article that just take money out of the system (from other players) on a regular basis, they are guaranteed to get more out. That's where the real success of the company happens, and you have no mechanism to get a share of that success unless you are an actual investor in $ of that company. In that story, there are no external consumers that are willingly paying money to the company in exchange for some good or service, that would make the players richer.
- adnzzzzZ 5y ago
  Investors also buy tokens because they think it will go up, not only people playing the game. Yes, people will lose if it goes down, but that's what it's like with everything. Some players will win, some players will lose, some investors will win, some investors will lose. There is absolutely nothing wrong with this. This is how the world works. If people think the project has value then it will go up in value and if they don't then it won't. I don't understand why people make it so complicated and try to imply that there's anything wrong with this.
  - sailingparrot 5y ago
    Because that's actually not how the world works. With traditional company, some consumers are paying it for a service. Apple is making 300B$ a year because a lot of people are willing to partake large amount of money in exchange for some good that they (think they) need such as a laptop or a phone. The consumers have no expectation of getting that money back later, it's a trade. If you think Apple is a good company and will be more successful in the future, you can decide to invest it in, and you buy a share of that company to some other investor against cash. In theory, it's possible for every single investor of Apple to make more money than what they paid for through dividends: As long as Apple keeps making products that people are willing to pay for, it will make money, and investors get a chunk of that money. Here value is created by work happening in the entire value chain needed to produce the good. Because if you had to make your laptop yourself with a pickaxe, it would be quite inconvenient. Also, if everyone suddenly decides to dump all their Apple stock, it will go down a lot, but not to zero, because the company as an actual intrisinc value: they have hundreds of billions of $ in cash in their war chest, have a lot of valuable physical things, and will continue to make hundreds of billions every year no matter what people on the stock market think. Overall it's not a zero sum game, because consumers are providing an external source of cash to the investors. Now, the more a stock is overbought, the closer it becomes to zero sum. Tesla for example, if it fails to realise the bright future that everyone is betting on, then it will get ugly as it's current stock value is disconnected from it's current intrinsinc value. Axie is very different, the price of the token only rise because of investors (here players), there is no external source of money going in that could make everyone richer. It's a bunch of people sitting in circle around a pile of cash with the promise that they will be able to take a random piece of the pile later on. And if you want to be able to sit with them, you first have to put cash on the pile yourself. Looking at the pile of cash getting bigger and bigger is exciting, but you will have to fight everyone else to get more than you put in. Oh and while you are sitting there waiting for the pile to get bigger, the people that organise the event are shovelling money out. All (most?) crypto games today are zero sum. However it's possible in the future that they may not be. I am thinking specifically about the ones that brand themselves as "metaverse". If the game in itself is interesting enough that people are engaging with it for a long time, then companies will want to start advertising in it, and if shares of that revenue are reinvested in the in-game economy and not just entirely taken by the company behind the game, that could be an example of external influx of money.
hogFeast 5y ago
It takes an extraordinary level of ignorance about basic elements of how business works (which I am sure the investors in this company have in spades) to think this makes sense. In order for someone to make money for something, there has to be an activity that generates a cashflow. There is no cash flow being generated, there is no outside money, what value are these people creating for other people? If you are playing a game to make money, you have to be providing some kind of value. So far, this company has convinced people to put money in, the rest of the money is probably coming from investors...there is no other money (and btw, the people playing the game are clearly much smarter than Andressen & Partners, they are taking out whatever isn't nailed down and making a swift exit). If you look at poker, it is obvious why some people are paid to play that game: they provide liquidity, they provide someone to gamble with, they provide the capital to take risk. It is the same with a bookmaker. This example has none of these characteristics because there is no outside money (the quote from a partner at Andressen's firm is incredible, I worked in fund management, I have seen some incompetent people, people who are truly clueless...what we are seeing in VC is unlike anything that has occurred in financial culture since the 20s). This reminds me of Football Index: the details of this are complex but they essentially paid people to play a game, there was no outside money, investors didn't understand this, management didn't fully understand this, they went bankrupt earlier this year taking down tens of millions in client money (no-one who plays this games understand that they are investing in an OTC product secured against the developer, it is nothing to do with the underlying game).
- zenplant 5y ago
  The outside money is the value people are willing to pay for in game stuff. If it's a good enough / popular enough game that ends up being billions of dollars. Ask Riot games how well you can do with just cosmetic items that do absolutely nothing but make your character model slightly different. Their net worth is hovering around 25 billion these days, mostly off of things you assume can provide no cash flow.

stathibus 5y ago

Ponzi schemes don't become ethical when they temporarily enrich people who are lower on the economic totem pole. I would argue they actually become less ethical.

adnzzzzZ 5y ago
People sharing in the success of a new company is not a ponzi scheme. If a company is started from nothing, is providing value, and early adopters are paid with tokens as a way to jump start the business the tokens are simply being used to extract future value into the present. In some cases there's no actual value in the future because the product isn't good, but that doesn't make it a ponzi scheme, just a poor business.
- hobs 5y ago
  "Providing value" is doing some serious heavy lifting in that sentence - MLM/Ponzi schemes can definitely argue they "provide value" and its telling that its your metric for not being a con. In a traditional ponzi scheme many people get paid, until the last people are left holding the bag.
  - adnzzzzZ 5y ago
    As a video game maker myself I'd say that video games generally provide value. If this particular video game provides as much value as its valued at is not for me to decide, but for the people who play it and invest in it.
    - smoldesu 5y ago
      "As a tupperware party host myself, I'd say that tupperware generally provides value. If this particular piece of plastic provides as much value as it's valued isn't for me to decide, but the friends and family I invite to the party." Doesn't quite have the same ring to it, does it?
    - meheleventyone 5y ago
      What if the only value is speculation or rent seeking on people that are poor? It’s already the case that the pay to earn economy crashed deeply. You keep saying value but without saying what that value actually is. Until a Ponzi scheme crashes everyone in it thinks it’s providing value after all. As a videogame maker myself I’d rather give my games away for free than setup the kind of economic trap Axie has.
      - zenplant 5y ago
        Axie may have done it wrong, but the concept of in game currency has been shown to be wildly lucrative in the past. Let's take Valve as an example. You get a CS:GO knife you're sometimes able to sell that for a large chunk of money. Valve takes a gigantic cut of any of those transactions, and then the money can only be used to buy further products from them. Is that more ethical than what Axie is doing? Wouldn't it be neat if instead of "valve fun bucks" it were real world money that players could pay their rent with? If someone does this correctly it could end up being a very good thing IMO.
        hobs 5y ago
        Co-opting an existing player base to inject capitalism in it has flooded the market with bots, trade scams, and constant annoying spam "hey do you still want those headphones? how about that group?" The only people who benefit from the CS:GO knives are the ones who are extremely lucky or constantly performing economic activity at the expense of the community, its not good.
        meheleventyone 5y ago
        Stuff being wildly lucrative isn’t necessarily a great benchmark. On paper at least Axie has been wildly lucrative. Being wildly lucrative for some people who can pay their rent doesn’t make it moral either. As my sibling comment notes there’s also no free lunch and the lucrative for some people part has negatives for the rest of the player base. That said I have nothing against player made cosmetics being sold but there are much more obviously equitable ways of doing that. And then the elephant in the room that cosmetics are not game affecting and there is utterly no reason to use a blockchain for any of this.

sailingparrot 5y ago

There is no “success of the company that you can share in”. This is a zero sum game: as long as more people buy tokens to get in the game, then it continue going up, and every one feels like they are getting richer. But anyone selling their tokens is taking money out of the system, from all the players. If everyone sell their tokens, there will be exactly the same amount of money that comes out than that went in, just redistributed differently amongst the players, some will lose some will win. That’s what makes it a Ponzi scheme. The real winners here are the company behind Axie and the people like the guy from the article that just take money out of the system (from other players) on a regular basis, they are guaranteed to get more out. That's where the real success of the company happens, and you have no mechanism to get a share of that success unless you are an actual investor in $ of that company. In that story, there are no external consumers that are willingly paying money to the company in exchange for some good or service, that would make the players richer.

adnzzzzZ 5y ago
Investors also buy tokens because they think it will go up, not only people playing the game. Yes, people will lose if it goes down, but that's what it's like with everything. Some players will win, some players will lose, some investors will win, some investors will lose. There is absolutely nothing wrong with this. This is how the world works. If people think the project has value then it will go up in value and if they don't then it won't. I don't understand why people make it so complicated and try to imply that there's anything wrong with this.
- sailingparrot 5y ago
  Because that's actually not how the world works. With traditional company, some consumers are paying it for a service. Apple is making 300B$ a year because a lot of people are willing to partake large amount of money in exchange for some good that they (think they) need such as a laptop or a phone. The consumers have no expectation of getting that money back later, it's a trade. If you think Apple is a good company and will be more successful in the future, you can decide to invest it in, and you buy a share of that company to some other investor against cash. In theory, it's possible for every single investor of Apple to make more money than what they paid for through dividends: As long as Apple keeps making products that people are willing to pay for, it will make money, and investors get a chunk of that money. Here value is created by work happening in the entire value chain needed to produce the good. Because if you had to make your laptop yourself with a pickaxe, it would be quite inconvenient. Also, if everyone suddenly decides to dump all their Apple stock, it will go down a lot, but not to zero, because the company as an actual intrisinc value: they have hundreds of billions of $ in cash in their war chest, have a lot of valuable physical things, and will continue to make hundreds of billions every year no matter what people on the stock market think. Overall it's not a zero sum game, because consumers are providing an external source of cash to the investors. Now, the more a stock is overbought, the closer it becomes to zero sum. Tesla for example, if it fails to realise the bright future that everyone is betting on, then it will get ugly as it's current stock value is disconnected from it's current intrinsinc value. Axie is very different, the price of the token only rise because of investors (here players), there is no external source of money going in that could make everyone richer. It's a bunch of people sitting in circle around a pile of cash with the promise that they will be able to take a random piece of the pile later on. And if you want to be able to sit with them, you first have to put cash on the pile yourself. Looking at the pile of cash getting bigger and bigger is exciting, but you will have to fight everyone else to get more than you put in. Oh and while you are sitting there waiting for the pile to get bigger, the people that organise the event are shovelling money out. All (most?) crypto games today are zero sum. However it's possible in the future that they may not be. I am thinking specifically about the ones that brand themselves as "metaverse". If the game in itself is interesting enough that people are engaging with it for a long time, then companies will want to start advertising in it, and if shares of that revenue are reinvested in the in-game economy and not just entirely taken by the company behind the game, that could be an example of external influx of money.

hogFeast 5y ago

It takes an extraordinary level of ignorance about basic elements of how business works (which I am sure the investors in this company have in spades) to think this makes sense. In order for someone to make money for something, there has to be an activity that generates a cashflow. There is no cash flow being generated, there is no outside money, what value are these people creating for other people? If you are playing a game to make money, you have to be providing some kind of value. So far, this company has convinced people to put money in, the rest of the money is probably coming from investors...there is no other money (and btw, the people playing the game are clearly much smarter than Andressen & Partners, they are taking out whatever isn't nailed down and making a swift exit). If you look at poker, it is obvious why some people are paid to play that game: they provide liquidity, they provide someone to gamble with, they provide the capital to take risk. It is the same with a bookmaker. This example has none of these characteristics because there is no outside money (the quote from a partner at Andressen's firm is incredible, I worked in fund management, I have seen some incompetent people, people who are truly clueless...what we are seeing in VC is unlike anything that has occurred in financial culture since the 20s). This reminds me of Football Index: the details of this are complex but they essentially paid people to play a game, there was no outside money, investors didn't understand this, management didn't fully understand this, they went bankrupt earlier this year taking down tens of millions in client money (no-one who plays this games understand that they are investing in an OTC product secured against the developer, it is nothing to do with the underlying game).

zenplant 5y ago
The outside money is the value people are willing to pay for in game stuff. If it's a good enough / popular enough game that ends up being billions of dollars. Ask Riot games how well you can do with just cosmetic items that do absolutely nothing but make your character model slightly different. Their net worth is hovering around 25 billion these days, mostly off of things you assume can provide no cash flow.