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Is gold a ponzi scheme? 1. Gold bars are just collections of atoms and always stay exactly how they are, the material never changes, so the intrinsic value of

Is gold a ponzi scheme? 1. Gold bars are just collections of atoms and always stay exactly how they are, the material never changes, so the intrinsic value of a gold bar never changes. 2. It seems that the only way to make money while trading gold is to take it from other people. The only way to win a return is if a bunch of people suddenly want gold and offer to pay you for yours. Gold, and other commodities, seem to fit your definition.

Ourgon 5y ago
The perceived value of gold lies in its scarcity, there is only so much of it to go around [1]. No matter how much people may have tried, it is not realistically possible to create more gold. This is not true for cryptocurrencies, the term shitcoin did not come out of nowhere. While there may be artificial scarcity within a single cryptocurrency there is no scarcity of cryptocurrencies. Everyone and (literally - Dogecoin) his dog can launch a new shitcoin and try to dupe investors into driving up its value, if only for a short while. By the time the hype is past those who launched the shitcoin will have cashed out already, making off with a large fraction of whatever they managed to dupe people into investing in the scheme. [1] unless someone takes up asteroid mining, that is...
- brian_cloutier 5y ago
  crypto is no stranger to shitcoins and to true ponzis, the illegal kind. Unfortunately, shitcoins and ponzis require hype to survive and will generate voluminous amounts of it. This generates a selection effect where most crypto hype will be of the unsavory kind. This can give the impression that all of crypto is a scam, that impression is wildly incorrect. I believe this is the trap that lern_to_spel and many others on HN are falling prey to.
lern_too_spel 5y ago
People need gold for its properties. As the number of people grows faster than the available amount of gold, its value goes up. Crypto tokens are not needed for anything because they are inferior to alternatives for all the purposes they have been applied to. More people needing 0 tokens means the value of the tokens should remain 0.
- brian_cloutier 5y ago
  Well, now you're arguing a different point. Are you saying that your definition of ponzi really included an implicit third term? Ponzis are not ponzis when they involve an asset with intrinsic value? That doesn't seem right. In any case, here's another counterexample. People need ETH for its properties. Ethereum is necessary for payment for the execution of Ethereum smart contracts, which provide a service with no predecessor. You might disagree with me about the utility of the service that they provide, but there really is no pre-crypto smart contract alternative.
  - lern_too_spel 5y ago
    Why doesn't it seem right? The ponzi derives its value solely from new entrants paying older entrants' withdrawals. The smart contract itself has zero value because non-crypto alternatives are cheaper and actually enforceable.
    - brian_cloutier 5y ago
      You are very sure there is nothing of value here, and you have no reason to trust me, so there's not much more to be said. Some day you might find someone you kind of trust who tells you that no, there really is something to this crypto thing. I hope this comment helps push you over the threshold of giving it a shot and looking into smart contracts. There is a lot of noise but once you get through the noise there really is a lot of cool and actually useful stuff happening with smart contracts, you'll be pleasantly surprised.

Ourgon 5y ago

The perceived value of gold lies in its scarcity, there is only so much of it to go around [1]. No matter how much people may have tried, it is not realistically possible to create more gold. This is not true for cryptocurrencies, the term shitcoin did not come out of nowhere. While there may be artificial scarcity within a single cryptocurrency there is no scarcity of cryptocurrencies. Everyone and (literally - Dogecoin) his dog can launch a new shitcoin and try to dupe investors into driving up its value, if only for a short while. By the time the hype is past those who launched the shitcoin will have cashed out already, making off with a large fraction of whatever they managed to dupe people into investing in the scheme. [1] unless someone takes up asteroid mining, that is...

brian_cloutier 5y ago
crypto is no stranger to shitcoins and to true ponzis, the illegal kind. Unfortunately, shitcoins and ponzis require hype to survive and will generate voluminous amounts of it. This generates a selection effect where most crypto hype will be of the unsavory kind. This can give the impression that all of crypto is a scam, that impression is wildly incorrect. I believe this is the trap that lern_to_spel and many others on HN are falling prey to.

lern_too_spel 5y ago

People need gold for its properties. As the number of people grows faster than the available amount of gold, its value goes up. Crypto tokens are not needed for anything because they are inferior to alternatives for all the purposes they have been applied to. More people needing 0 tokens means the value of the tokens should remain 0.

brian_cloutier 5y ago
Well, now you're arguing a different point. Are you saying that your definition of ponzi really included an implicit third term? Ponzis are not ponzis when they involve an asset with intrinsic value? That doesn't seem right. In any case, here's another counterexample. People need ETH for its properties. Ethereum is necessary for payment for the execution of Ethereum smart contracts, which provide a service with no predecessor. You might disagree with me about the utility of the service that they provide, but there really is no pre-crypto smart contract alternative.
- lern_too_spel 5y ago
  Why doesn't it seem right? The ponzi derives its value solely from new entrants paying older entrants' withdrawals. The smart contract itself has zero value because non-crypto alternatives are cheaper and actually enforceable.
  - brian_cloutier 5y ago
    You are very sure there is nothing of value here, and you have no reason to trust me, so there's not much more to be said. Some day you might find someone you kind of trust who tells you that no, there really is something to this crypto thing. I hope this comment helps push you over the threshold of giving it a shot and looking into smart contracts. There is a lot of noise but once you get through the noise there really is a lot of cool and actually useful stuff happening with smart contracts, you'll be pleasantly surprised.