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By definition something with a finite supply cannot be a pyramid scheme, in fact in most cases there are no parallels whatsoever to crypto and pyramid schemes.

by wyck 5y ago

By definition something with a finite supply cannot be a pyramid scheme, in fact in most cases there are no parallels whatsoever to crypto and pyramid schemes. There are some pyramid schemes within the shitcoin scam and yield farmer communities, but to think that's represents the industry is highly ignorant.

justinator 5y ago
So you're saying the SEC is, "highly ignorant"? https://www.sec.gov/files/ia_virtualcurrencies.pdf https://www.sec.gov/files/ia_virtualcurrencies.pdf
- wyck 5y ago
  Ya, do you really think otherwise?
- phire 5y ago
  Did you even read what you linked? The SEC are saying that some operators of proper Ponzi schemes are taking crypto as investment and using crypto hype to justify their insane profits. Not that crypto in general is a Pyramid or Ponzi scheme.
deleted 5y ago
[deleted]
wizzwizz4 5y ago
By your definition, the original Ponzi scheme isn't a pyramid scheme. https://en.wikipedia.org/wiki/Ponzi_scheme https://en.wikipedia.org/wiki/Ponzi_scheme That scheme was based on arbitrage of international reply coupons, of which there were a finite number in circulation.
- wyck 5y ago
  Poorly worded on my part, I meant > as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own. As mentioned this happens a lot with shitcoins and yield farmers, its rather easy to setup, but is not indicative of the industry, and the main source to blame for this misconception is the media, because you certainly cannot justify it if you understood the technology.
  - justinator 5y ago
    It just sounds like Bitcoin to me. The proponents tell me how much it's worth and you're stupid to not want to invest. A few get rich and the rest are left poorer than what they started with. Moxie used the phrase, "gold rush" in this essay, and it's fitting for cryptocurrency itself as far as I can tell. I'm poor, (but not stupid, thank you!), but I've only seen crypto being used as payment for prostitution. Which, hey if that works, good on 'em, I support the idea of safe, legal sex work.
  - majormajor 5y ago
    > Poorly worded on my part, I meant > as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own. Isn't this just saying "something can't be a pyramid scheme unless it has already collapsed"? Whereas the argument being made is that looking like a pyramid scheme is something that tells you something about the future likelihood of collapse. (I think there's also an interesting dynamic that's not explored much here about "finite supply" - unless/until every coin except for one or a small handful collapse, it seems like "crypto" as a whole is subject to inflationary pressure from new coins. Would BTC be worth more in USD terms if ETH didn't exist?)
  - zucker42 5y ago
    Are you claiming that nothing is a pyramid scheme until it crashes?
    - justinator 5y ago
      I think if you're invested in a pyramid scheme, it's not easy to admit such. I have to relate this to the whole Allison Mack/NXIVM pyramid scheme. Funny that we still don't know who the mythical "Satoshi Nakamoto" is. Seems pretty cultish to me, but believe what you wanna believe. To me that's a pretty big red flag. But I'm super into people calling me stupid so have at it.
      - wyck 5y ago
        Wow that's might be an record for worst analogy ever. A cult needs a figurehead and leader which is the exact opposite of this technology is trying to accomplish, here a suggestion, don't use the word "believe", it's technology, go read the white paper and the science behind it.

by wyck 5y ago

justinator 5y ago

So you're saying the SEC is, "highly ignorant"? https://www.sec.gov/files/ia_virtualcurrencies.pdf https://www.sec.gov/files/ia_virtualcurrencies.pdf

wyck 5y ago
Ya, do you really think otherwise?
phire 5y ago
Did you even read what you linked? The SEC are saying that some operators of proper Ponzi schemes are taking crypto as investment and using crypto hype to justify their insane profits. Not that crypto in general is a Pyramid or Ponzi scheme.

deleted 5y ago

[deleted]

wizzwizz4 5y ago

By your definition, the original Ponzi scheme isn't a pyramid scheme. https://en.wikipedia.org/wiki/Ponzi_scheme https://en.wikipedia.org/wiki/Ponzi_scheme That scheme was based on arbitrage of international reply coupons, of which there were a finite number in circulation.

wyck 5y ago
Poorly worded on my part, I meant > as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own. As mentioned this happens a lot with shitcoins and yield farmers, its rather easy to setup, but is not indicative of the industry, and the main source to blame for this misconception is the media, because you certainly cannot justify it if you understood the technology.
- justinator 5y ago
  It just sounds like Bitcoin to me. The proponents tell me how much it's worth and you're stupid to not want to invest. A few get rich and the rest are left poorer than what they started with. Moxie used the phrase, "gold rush" in this essay, and it's fitting for cryptocurrency itself as far as I can tell. I'm poor, (but not stupid, thank you!), but I've only seen crypto being used as payment for prostitution. Which, hey if that works, good on 'em, I support the idea of safe, legal sex work.
- majormajor 5y ago
  > Poorly worded on my part, I meant > as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own. Isn't this just saying "something can't be a pyramid scheme unless it has already collapsed"? Whereas the argument being made is that looking like a pyramid scheme is something that tells you something about the future likelihood of collapse. (I think there's also an interesting dynamic that's not explored much here about "finite supply" - unless/until every coin except for one or a small handful collapse, it seems like "crypto" as a whole is subject to inflationary pressure from new coins. Would BTC be worth more in USD terms if ETH didn't exist?)
- zucker42 5y ago
  Are you claiming that nothing is a pyramid scheme until it crashes?
  - justinator 5y ago
    I think if you're invested in a pyramid scheme, it's not easy to admit such. I have to relate this to the whole Allison Mack/NXIVM pyramid scheme. Funny that we still don't know who the mythical "Satoshi Nakamoto" is. Seems pretty cultish to me, but believe what you wanna believe. To me that's a pretty big red flag. But I'm super into people calling me stupid so have at it.
    - wyck 5y ago
      Wow that's might be an record for worst analogy ever. A cult needs a figurehead and leader which is the exact opposite of this technology is trying to accomplish, here a suggestion, don't use the word "believe", it's technology, go read the white paper and the science behind it.