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While trying to not regularly call the majority of cryptocurrencies (the term currency misappropriated) an MLM-Ponzi scheme, I've started to realize that an eas

by loceng 5y ago

While trying to not regularly call the majority of cryptocurrencies (the term currency misappropriated) an MLM-Ponzi scheme, I've started to realize that an easier or perhaps better way to state the problem with them is to use one of the key values that is virtue signalled against them: it's claimed that Bitcoin et al are anti-inflation, when in fact the inflation is just built into it - and only benefit the early/earlier adopters, the burden of inflation otherwise being shifted and weighted away from the earlier adopters towards the latest adopters. The crypto holders not only would love if the whole world switched but they actually depend on it to realize their profits, and for the latest adopters to not be left holding the bag, which at least the last 50% of adopters will be holding some portion of the bag/losses before and once it collapses; the wealth transfer will already have happened to the early adopters, and so whether the "community" or army of HODLers pity themselves and keep dabbling in it to keep their dream alive or not, will be interesting to watch at least, perhaps if it's not too embarrassing for the majority; the ones who exited with millions to $100s of millions, at least some of them of course will proudly showoff their gains by being in the MLM-Ponzi scheme(s) early - not being shameful of the unknown harm and losses their gains caused others and society as a whole. A lesson, to say the least. But the above is why those of us who see what Bitcoin et al are for what they are need to take a stand because regulatory/systems and policy capture will happen and is attempting to happen, perhaps the most extreme example of this so far being El Salvador - where their current "elected" leader at one point brought in military with guns into their parliament to threaten their parliament if they didn't adopt whatever he is/was gunning for; then you have a government/organization that's shown an example of what they're willing to do wanting to then influence the rest of the world (by whatever nefarious/violent means they may be so inclined to do) in order for a global-decentralized financial database to be required to be used, to then realize their gains, which richness wise, if they succeeded at getting the world to adopt - would make them as relative early adopters, very rich indeed - at least those in government who actually control the keys to their kingdom's crypto vault. Once I saw a significant portion of the mainstream VC-finance industrial complex buy into it, arguably heavily lead by USV with their Coinbase and other ecosystem investments - gaps they knew someone would have to fill, including funding a crypto lobbyist organization, then I knew things would get too serious to ignore. The solution however simply seems to be thoroughly educate the population so they understand the mechanisms - as most of what they will have seen or heard about is easily considered propaganda to hype up to sell more of whatever flavour of MLM-Ponzi scheme they can convince/trick you into buying. Edit to add: Forgot to link to article re: "Heavily-armed police and soldiers enter El Salvador parliament" - https://www.bbc.com/news/world-latin-america-51439020 https://www.bbc.com/news/world-latin-america-51439020

WorldMaker 5y ago
Yeah, one of the things cryptocurrency supporters often claim is that the coin pools were generally designed to be fixed size and "deflationary" as a goal (at least from certain points of view), but deflation as a goal is just as bad as inflation as a goal. Too much deflation tends to spiral [1] and there are plenty of examples of real world economies in history torn apart by deflation. I don't know what an equitable monetary policy would be, but I know that intentionally deflationary currencies look nothing like it. [1] https://www.investopedia.com/terms/d/deflationary-spiral.asp https://www.investopedia.com/terms/d/deflationary-spiral.asp
przeor 5y ago
Social Security at least in Poland, also is a Ponzi-like scheme. The difference is that to crypto you arent forced to participate in in opposit to govt backed schemes.
- loup-vaillant 5y ago
  Err… can you explain in more detail how social security works in Poland, and how it is pyramidal, or at least multi-level?
  - G3rn0ti 5y ago
    Well, all redistributive social security systems have a strong pyramid like scheme inherent to them. Take the German retirement funds which - AFAIK — works similarly to „social security“ in the US: Every employee in Germany is required to pay a share of about 20% of their income (1) into the retirement „fund“ — which isn’t one really as the money is not invested to gain interest but instead is immediately payed out to the current generation of retirees. On the other hand, employees are promised to receive a future pension based on the payments by the next generation of employees (i.e. their kids). In Germany, this is called „Generationenvertrag“ („contract between generations“). This is almost like a Ponzi/pyramid scheme where obscene „profits“ are payed out purely based on the exponentially growing number of payees until the day the growth stops and the system collapses like a house of cards. This breakdown has been happening for decades already albeit at a glacial rate in the German public pension system as the population has been shrinking and therefore the number of payees. It is artificially kept alive as the German federal government pumps 100 billions of tax money every year into it which is 30% of the whole federal budget … Of course, a redistributive pension system can sustain itself as long as the population age distribution looks like a literal pyramid. But that’s not the case for most Western countries. (1) Formally, the employee pays only 10% and the other 10% are taken from the employer. But, of course, the employer could as well pay his 10% share as salary instead. So, either way, it’s the employee paying everything.

by loceng 5y ago

WorldMaker 5y ago

Yeah, one of the things cryptocurrency supporters often claim is that the coin pools were generally designed to be fixed size and "deflationary" as a goal (at least from certain points of view), but deflation as a goal is just as bad as inflation as a goal. Too much deflation tends to spiral [1] and there are plenty of examples of real world economies in history torn apart by deflation. I don't know what an equitable monetary policy would be, but I know that intentionally deflationary currencies look nothing like it. [1] https://www.investopedia.com/terms/d/deflationary-spiral.asp https://www.investopedia.com/terms/d/deflationary-spiral.asp

przeor 5y ago

Social Security at least in Poland, also is a Ponzi-like scheme. The difference is that to crypto you arent forced to participate in in opposit to govt backed schemes.

loup-vaillant 5y ago
Err… can you explain in more detail how social security works in Poland, and how it is pyramidal, or at least multi-level?
- G3rn0ti 5y ago
  Well, all redistributive social security systems have a strong pyramid like scheme inherent to them. Take the German retirement funds which - AFAIK — works similarly to „social security“ in the US: Every employee in Germany is required to pay a share of about 20% of their income (1) into the retirement „fund“ — which isn’t one really as the money is not invested to gain interest but instead is immediately payed out to the current generation of retirees. On the other hand, employees are promised to receive a future pension based on the payments by the next generation of employees (i.e. their kids). In Germany, this is called „Generationenvertrag“ („contract between generations“). This is almost like a Ponzi/pyramid scheme where obscene „profits“ are payed out purely based on the exponentially growing number of payees until the day the growth stops and the system collapses like a house of cards. This breakdown has been happening for decades already albeit at a glacial rate in the German public pension system as the population has been shrinking and therefore the number of payees. It is artificially kept alive as the German federal government pumps 100 billions of tax money every year into it which is 30% of the whole federal budget … Of course, a redistributive pension system can sustain itself as long as the population age distribution looks like a literal pyramid. But that’s not the case for most Western countries. (1) Formally, the employee pays only 10% and the other 10% are taken from the employer. But, of course, the employer could as well pay his 10% share as salary instead. So, either way, it’s the employee paying everything.