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For those who believe "crypto is too big to fail", or the genie is out of the bottle, or that crypto concepts have become so engrained and popular that it's not

by _xnmw 5y ago

For those who believe "crypto is too big to fail", or the genie is out of the bottle, or that crypto concepts have become so engrained and popular that it's not possible to stop, I'd like to point out that Bernie Madoff's Ponzi scam lasted for 30+ years. People built entire lives on his very professional-seeming "business". Scams can go on for a very long time, and very large numbers of people can build their whole lives on a lie (even successfully). Crypto is probably the most brilliant scam in the history of mankind, because it combines plausible deniability with techno-obfuscation and meme-driven popularity to a degree that makes it nearly impossible for democratic governments to regulate (good on China for banning it!), and this state of affairs may continue for quite a while. But even if it doesn't all come crashing down in my lifetime, I still won't touch it with a ten-foot pole as a matter of principle, no matter the potential gains. There are some things I won't get involved with as a matter of principle, such as certain illegal drugs, even if they were legal.

dqpb 5y ago
What do you even mean by Crypto? It's like saying "Internet is probably the most brilliant scam in the history of mankind". It's so non-specific it's meaningless.
deleted 5y ago
[deleted]
ricardobayes 5y ago
Same here, even though it's increasingly hard. All my friends say I'm stupid to choose to leave out.
lardo 5y ago
What about legal drugs?
twox2 5y ago
Sure, let's talk shit about a new system that's largely censorship resistant (or trying to be) and call it the biggest scam in history (without any evidence) while praising the world's most authoritarian government. Hard to take you seriously.
- ericd 5y ago
  They forgot to mention the widespread vested interest by the large number of speculators to deny/downplay the issues in every discussion ;-)
  - twox2 5y ago
    Indeed, I'm one of those folks to some extent. I've made good money from crypto. I'm not here to downplay the issues, in fact I admit there are MANY issues. That doesn't mean I brush off the whole thing as a scam or a ponzi. EDIT: PS. I don't know much about celsius, and it might in fact be a ponzi. I'm referring to brushing off crypto as ponzi.
    - deleted 5y ago
      [deleted]
gitfan86 5y ago
Pyramid schemes like Rodan and Fields can go on forever, they will grow and contract over time, but there will always be a new group of people who are interested in getting rich. The mentality isn't much different than gambling at casinos I guess.
ajross 5y ago
Crypto is a mix, though. Yes, there's lots of feedback-growth/tulip-bubble nonsense. There's also a very large amount of very real money flight being enabled. The PRC clampdown was fundamentally aimed at that trick: wealthy folks in China with a ton of RMB don't trust the government not to steal their fortune (c.f. Jack Ma). But you can't turn those yuan into anything liquid outside the country without tipping them off that you're running, then you'll end up just like Jack anyway. But... if you can build a datacenter in China with RMB, and pay chinese workers with RMB, and buy equipment and electricity with RMB, and get *bitcoin* out, then you've evaded the trap and liquified[1] your Chinese holdings. It's not at all clear to me how much this hole has been closed, honestly. But it's possible this is still going on at a level high enough to explain crypto's continued expansion. That said: duh, it's a bubble and it's coming down at some point. But there's real economics happening too. [1] Or laundered, depending on how you swing.
- SZJX 5y ago
  First, there were already various capital transfer methods for the Chinese rich before crypto exploded (also, Jack Ma wasn’t really targeted to give up his wealth or whatsoever. Legally speaking any Chinese person can only transfer up to 50K USD abroad per year, and that’s the reason for the search after capital flight mechanisms, but that’s a separate point). Second, this could not be a particular reason why the crypto market would suddenly balloon 10 times in less than a year (why would Bitcoin’s value go up if it’s only bought/mined and sold constantly in exchange for fiat anyways, in the first place?). So yeah, capital flight has always been a use case of crypto, but it far from explains the market exuberance we’re seeing right now.
nradov 5y ago
China banned cryptocurrency not because it's a scam (which it mostly is) but because it provides a way for wealthy Chinese to evade currency controls. The Chinese renmimbi currency isn't freely convertible to foreign hard currency. But Chinese residents found a loophole. They could purchase cryptocurrency mining hardware and electricity with renmimbi, then use online exchanges to sell the resulting tokens for foreign currency. The Chinese Communist Party couldn't tolerate this challenge to their authority.
nprz 5y ago
Eric Schmidt just joined ChainLink as a Strategic Advisor[0]. If crypto is such an obvious scam like so many hn readers believe to be the case, why would someone like Schmidt ruin his reputation by joining a crypto company? [0] https://www.prnewswire.com/news-releases/former-google-ceo-eric-schmidt-joins-chainlink-labs-as-a-strategic-advisor-301438428.html https://www.prnewswire.com/news-releases/former-google-ceo-e...
- _xnmw 5y ago
  Even Bernie Madoff had highly respectable people working with him. edit: removed my comment about Schmidt not really joining, I see it announced on his Twitter.
  - throwaway405769 5y ago
    This is so funny. You know, maybe you're just wrong and people that are smarter than you think differently. Have you considered that?
  - Fiahil 5y ago
    I don't know... but I think you're wrong: https://twitter.com/ericschmidt/status/1468308027296075778 https://twitter.com/ericschmidt/status/1468308027296075778
  - namdnay 5y ago
    If I understand correctly, Chainlink are selling "blockchain magic" to enterprise customers. Not exactly the same thing as the ponzi lending stuff
    - nprz 5y ago
      ChainLink is an Oracle that provides real-world data to the blockchain. They're used by smart contracts like AAVE and Compound, things a hn reader might describe as "ponzi lending stuff".
deleted 5y ago
[deleted]
delabay 5y ago
Crypto speaks to aspects of humanity which people hold near and dear. Crypto no doubt harbors shady characters, ponzi schemes, scams. You also can't deny that there are ideas which threaten state control, monetary policy, nationalistic ideals, religion its self. Just look at the magnitude of the conversation. Its easy to dismiss me as the ramblings of somebody caught up in the scam. But when has it been a good idea to completely dismiss ideas which can shake the bedrock of society? I'm sure dinosaurs never thought an asteroid would cause them to go extinct either. I ask the skeptics to take a Bayesian approach to skepticism. If you think in absolutes you can never accept new information. Move your skept-o-meter from 100% to 99% and allow yourself a fraction of a sliver of consideration. It might just be one of the most important things you have done.
- meepmorp 5y ago
  > If you think in absolutes you can never accept new information. Never? Sounds a mite like absolute thinking.
  - delabay 5y ago
    More like a mathematical certainty
- jcranmer 5y ago
  The basic issue with cryptocurrency is that very little of it is actually new. You talk about ideas which threaten monetary policy--except those 'ideas' were actually the typical monetary policy not a hundred years ago. So it's worth asking yourself why monetary policy was changed from your favored position before trying to convince everybody else that it should be changed back. You know, a decade ago, I actually thought that cryptocurrency and blockchain were interesting ideas that might be well worth pursuing. But it has increasingly felt like a solution in search of a problem--it's hard to find any use cases that aren't already better solved with other solutions. And in these kinds of discussions, the cryptocurrency adherents themselves struggle to proffer any such problem that doesn't boil down to--as someone else put it--wanting to live in Galt's Gulch. Which isn't exactly a compelling problem for most of the world's population. And comments like yours aren't helping to move the needle in the direction you want it to move.
Paradigma11 5y ago
Crypto is an open protocol for financial services/transactions running on decentralised hardware. Thats pretty cool and useful. Naturally the first thing that happened was that all the scammers and get rich idiots moved in like with any powerful new technology. It will surely take some time to get the real world usage up and the portion of moon boys/scammers down but it will happen nevertheless.
- _xnmw 5y ago
  > Crypto is an open protocol for financial services/transactions running on decentralised hardware. Except it's not. "Open" and "decentralized" are the false promises of crypto. The entire crypto market is dominated by centralized exchanges, criminal enterprises like Tether and Binance.
  - Paradigma11 5y ago
    How is it not open when anybody can interact with it and look at the source code, state of the chain and smart contracts? The chain is decentralized as no company is hosting the servers and can pull a google on short notice. But sure, many chains have serious problems with centralization of assets, control by a single person group..... This things, in combination with regulation, have to work itself out and the situation will most likely be completely different in 5-10 years.
    - NicoJuicy 5y ago
      You're talking as a developer. None of the exchanges influencing crypto is actually open about their business. Eg. They even try to fake audits as much as possible. Ponzi schemes, pump and dumps, fake code-audits that reveal 0day exploits at launch and other (sometimes insider) hacks everywhere! It really is a daily wild wild west show - https://rekt.news https://rekt.news I will never trust a currency, where malicious insiders can walk away anonymously with my money and blame it on a hack.
  - TimJRobinson 5y ago
    "Open" and "decentralized" are the false promises of computing. The entire market is dominated by centralized companies like Microsoft and Apple. Sound stupid? That's how your statement looks to people who understand the space. Linux and open source software started slow but every year run more of the world because they are a better way of building things Crypto and decentralized finance is doing the same for the finance industry. There are already $250B in DeFi protocols (see http://defillama.com http://defillama.com) all of which are open source, transparent and decentralized.
jerrygoyal 5y ago
For those who don't know Bernie Madoff was an American financier who executed the largest Ponzi scheme in history, defrauding thousands of investors out of tens of billions of dollars over the course of at least 17 years, and possibly longer. He was also a pioneer in electronic trading and chairman of the Nasdaq in the early 1990s.
SaltyFetus 5y ago
There is nothing of substance in this comment; its taken you two paragraphs to say "I think its a scam and I don't like it". Moralizing and vague threats make up the rest.
TimJRobinson 5y ago
How are you so confident in something you clearly don't understand. Celsius is not decentralized finance and does not represent crypto, it is a centralized opaque company which is literally the opposite. Decentralized Finance is all open source and transparent, everything is written to a public blockchain and almost every piece of infrastructure you can go and look at the source code yourself. It's a far better system than anything we've built so far because it's available for all to see the inner workings. I'm surprised hacker news, a place that's supposed to be about intellectual curiosity, has been so ignorant and dismissive of this revolution underfoot for so long.
SergeAx 5y ago
Define "scam" then. I am 100% sure I can buy drugs, fake IDs, CP and other illegal goods and services with crypto, how's that a scam?

by _xnmw 5y ago

dqpb 5y ago

What do you even mean by Crypto? It's like saying "Internet is probably the most brilliant scam in the history of mankind". It's so non-specific it's meaningless.

deleted 5y ago

[deleted]

ricardobayes 5y ago

Same here, even though it's increasingly hard. All my friends say I'm stupid to choose to leave out.

lardo 5y ago

What about legal drugs?

twox2 5y ago

Sure, let's talk shit about a new system that's largely censorship resistant (or trying to be) and call it the biggest scam in history (without any evidence) while praising the world's most authoritarian government. Hard to take you seriously.

ericd 5y ago
They forgot to mention the widespread vested interest by the large number of speculators to deny/downplay the issues in every discussion ;-)
- twox2 5y ago
  Indeed, I'm one of those folks to some extent. I've made good money from crypto. I'm not here to downplay the issues, in fact I admit there are MANY issues. That doesn't mean I brush off the whole thing as a scam or a ponzi. EDIT: PS. I don't know much about celsius, and it might in fact be a ponzi. I'm referring to brushing off crypto as ponzi.
  - deleted 5y ago
    [deleted]

gitfan86 5y ago

Pyramid schemes like Rodan and Fields can go on forever, they will grow and contract over time, but there will always be a new group of people who are interested in getting rich. The mentality isn't much different than gambling at casinos I guess.

ajross 5y ago

Crypto is a mix, though. Yes, there's lots of feedback-growth/tulip-bubble nonsense. There's also a very large amount of very real money flight being enabled. The PRC clampdown was fundamentally aimed at that trick: wealthy folks in China with a ton of RMB don't trust the government not to steal their fortune (c.f. Jack Ma). But you can't turn those yuan into anything liquid outside the country without tipping them off that you're running, then you'll end up just like Jack anyway. But... if you can build a datacenter in China with RMB, and pay chinese workers with RMB, and buy equipment and electricity with RMB, and get *bitcoin* out, then you've evaded the trap and liquified[1] your Chinese holdings. It's not at all clear to me how much this hole has been closed, honestly. But it's possible this is still going on at a level high enough to explain crypto's continued expansion. That said: duh, it's a bubble and it's coming down at some point. But there's real economics happening too. [1] Or laundered, depending on how you swing.

SZJX 5y ago
First, there were already various capital transfer methods for the Chinese rich before crypto exploded (also, Jack Ma wasn’t really targeted to give up his wealth or whatsoever. Legally speaking any Chinese person can only transfer up to 50K USD abroad per year, and that’s the reason for the search after capital flight mechanisms, but that’s a separate point). Second, this could not be a particular reason why the crypto market would suddenly balloon 10 times in less than a year (why would Bitcoin’s value go up if it’s only bought/mined and sold constantly in exchange for fiat anyways, in the first place?). So yeah, capital flight has always been a use case of crypto, but it far from explains the market exuberance we’re seeing right now.

nradov 5y ago

China banned cryptocurrency not because it's a scam (which it mostly is) but because it provides a way for wealthy Chinese to evade currency controls. The Chinese renmimbi currency isn't freely convertible to foreign hard currency. But Chinese residents found a loophole. They could purchase cryptocurrency mining hardware and electricity with renmimbi, then use online exchanges to sell the resulting tokens for foreign currency. The Chinese Communist Party couldn't tolerate this challenge to their authority.

nprz 5y ago

Eric Schmidt just joined ChainLink as a Strategic Advisor[0]. If crypto is such an obvious scam like so many hn readers believe to be the case, why would someone like Schmidt ruin his reputation by joining a crypto company? [0] https://www.prnewswire.com/news-releases/former-google-ceo-eric-schmidt-joins-chainlink-labs-as-a-strategic-advisor-301438428.html https://www.prnewswire.com/news-releases/former-google-ceo-e...

_xnmw 5y ago
Even Bernie Madoff had highly respectable people working with him. edit: removed my comment about Schmidt not really joining, I see it announced on his Twitter.
- throwaway405769 5y ago
  This is so funny. You know, maybe you're just wrong and people that are smarter than you think differently. Have you considered that?
- Fiahil 5y ago
  I don't know... but I think you're wrong: https://twitter.com/ericschmidt/status/1468308027296075778 https://twitter.com/ericschmidt/status/1468308027296075778
- namdnay 5y ago
  If I understand correctly, Chainlink are selling "blockchain magic" to enterprise customers. Not exactly the same thing as the ponzi lending stuff
  - nprz 5y ago
    ChainLink is an Oracle that provides real-world data to the blockchain. They're used by smart contracts like AAVE and Compound, things a hn reader might describe as "ponzi lending stuff".

deleted 5y ago

[deleted]

delabay 5y ago

Crypto speaks to aspects of humanity which people hold near and dear. Crypto no doubt harbors shady characters, ponzi schemes, scams. You also can't deny that there are ideas which threaten state control, monetary policy, nationalistic ideals, religion its self. Just look at the magnitude of the conversation. Its easy to dismiss me as the ramblings of somebody caught up in the scam. But when has it been a good idea to completely dismiss ideas which can shake the bedrock of society? I'm sure dinosaurs never thought an asteroid would cause them to go extinct either. I ask the skeptics to take a Bayesian approach to skepticism. If you think in absolutes you can never accept new information. Move your skept-o-meter from 100% to 99% and allow yourself a fraction of a sliver of consideration. It might just be one of the most important things you have done.

meepmorp 5y ago
> If you think in absolutes you can never accept new information. Never? Sounds a mite like absolute thinking.
- delabay 5y ago
  More like a mathematical certainty
jcranmer 5y ago
The basic issue with cryptocurrency is that very little of it is actually new. You talk about ideas which threaten monetary policy--except those 'ideas' were actually the typical monetary policy not a hundred years ago. So it's worth asking yourself why monetary policy was changed from your favored position before trying to convince everybody else that it should be changed back. You know, a decade ago, I actually thought that cryptocurrency and blockchain were interesting ideas that might be well worth pursuing. But it has increasingly felt like a solution in search of a problem--it's hard to find any use cases that aren't already better solved with other solutions. And in these kinds of discussions, the cryptocurrency adherents themselves struggle to proffer any such problem that doesn't boil down to--as someone else put it--wanting to live in Galt's Gulch. Which isn't exactly a compelling problem for most of the world's population. And comments like yours aren't helping to move the needle in the direction you want it to move.

Paradigma11 5y ago

Crypto is an open protocol for financial services/transactions running on decentralised hardware. Thats pretty cool and useful. Naturally the first thing that happened was that all the scammers and get rich idiots moved in like with any powerful new technology. It will surely take some time to get the real world usage up and the portion of moon boys/scammers down but it will happen nevertheless.

_xnmw 5y ago
> Crypto is an open protocol for financial services/transactions running on decentralised hardware. Except it's not. "Open" and "decentralized" are the false promises of crypto. The entire crypto market is dominated by centralized exchanges, criminal enterprises like Tether and Binance.
- Paradigma11 5y ago
  How is it not open when anybody can interact with it and look at the source code, state of the chain and smart contracts? The chain is decentralized as no company is hosting the servers and can pull a google on short notice. But sure, many chains have serious problems with centralization of assets, control by a single person group..... This things, in combination with regulation, have to work itself out and the situation will most likely be completely different in 5-10 years.
  - NicoJuicy 5y ago
    You're talking as a developer. None of the exchanges influencing crypto is actually open about their business. Eg. They even try to fake audits as much as possible. Ponzi schemes, pump and dumps, fake code-audits that reveal 0day exploits at launch and other (sometimes insider) hacks everywhere! It really is a daily wild wild west show - https://rekt.news https://rekt.news I will never trust a currency, where malicious insiders can walk away anonymously with my money and blame it on a hack.
- TimJRobinson 5y ago
  "Open" and "decentralized" are the false promises of computing. The entire market is dominated by centralized companies like Microsoft and Apple. Sound stupid? That's how your statement looks to people who understand the space. Linux and open source software started slow but every year run more of the world because they are a better way of building things Crypto and decentralized finance is doing the same for the finance industry. There are already $250B in DeFi protocols (see http://defillama.com http://defillama.com) all of which are open source, transparent and decentralized.

jerrygoyal 5y ago

For those who don't know Bernie Madoff was an American financier who executed the largest Ponzi scheme in history, defrauding thousands of investors out of tens of billions of dollars over the course of at least 17 years, and possibly longer. He was also a pioneer in electronic trading and chairman of the Nasdaq in the early 1990s.

SaltyFetus 5y ago

There is nothing of substance in this comment; its taken you two paragraphs to say "I think its a scam and I don't like it". Moralizing and vague threats make up the rest.

TimJRobinson 5y ago

How are you so confident in something you clearly don't understand. Celsius is not decentralized finance and does not represent crypto, it is a centralized opaque company which is literally the opposite. Decentralized Finance is all open source and transparent, everything is written to a public blockchain and almost every piece of infrastructure you can go and look at the source code yourself. It's a far better system than anything we've built so far because it's available for all to see the inner workings. I'm surprised hacker news, a place that's supposed to be about intellectual curiosity, has been so ignorant and dismissive of this revolution underfoot for so long.

SergeAx 5y ago

Define "scam" then. I am 100% sure I can buy drugs, fake IDs, CP and other illegal goods and services with crypto, how's that a scam?