4 ms·

It's a Ponzi scheme. He doesn't even seem to push back against the "Ponzi" phrasing. Also -- this is merely a footnote -- his Ponzi scheme is currently the 3rd

It's a Ponzi scheme. He doesn't even seem to push back against the "Ponzi" phrasing. Also -- this is merely a footnote -- his Ponzi scheme is currently the 3rd-largest political donation source in the USA. https://www.opensecrets.org/outsidespending/summ.php?GoToPage=%2Foutsidespending%2Fsumm.php%3Fcycle%3D2022%26chrt%3DV%26disp%3DO%26type%3DA https://www.opensecrets.org/outsidespending/summ.php?GoToPag... https://www.nbcnews.com/politics/2022-election/-crypto-cash-floods-democratic-primaries-rankling-lawmakers-rcna26463 https://www.nbcnews.com/politics/2022-election/-crypto-cash-...

api 4y ago
Regulatory capture by a Ponzi scheme was just added to my "list of things that could legitimately destroy the USA from within." Did Bernie Madoff ever do this? I feel like he did, but maybe not so effectively or at such scale.
- throwaway_1928 4y ago
  Madoff was different in that he successfully hid the fact that his was a ponzi scheme for 40 years. This interview with SBF suggests crypto does not even try and hide it.
- rjeli 4y ago
  Albania did, and it led to a civil war.
- acjohnson55 4y ago
  This has happened a number of times in this country. One major example is MLM, which was fully legitimized in 70s and 80s, after spending some time in a legal gray area. Ever since, the industry has expanded, even though it largely functions as wealth transfer from late arrivals to early incumbents, with a sprinkling of sustainable external commerce.
axg11 4y ago
Calling it a Ponzi scheme is uninteresting and not really the point here. Was GameStop a Ponzi scheme when the stock price soared? I think the interesting part here is the relation to bitcoin and a new theory on how to price things. It’s traditionally been assumed that the price of an asset is related to the underlying value it has or the value it generates (eg cash flow). SBF is pointing out that’s not a complete method of pricing assets in today’s world. You also have to factor in “collective agreements”. Bitcoin is the clearest example of an asset price that is driven by collective agreement. The collective agreement is enshrined in code and algorithms.
- lemonlime 4y ago
  "Collectives agreements" are not an innovation. Underlying value is precisely, simply and only, a collective agreement (made by the market, instantaneously in real time billions of times a day) about how much something is worth. Absolutely zero innovation there.
- thawaya3113 4y ago
  Whether it’s interesting or not, what the FTX CEO described is literally a Ponzi scheme.
- stingraycharles 4y ago
  > Calling it a Ponzi scheme is uninteresting and not really the point here. Was GameStop a Ponzi scheme when the stock price soared? I’d argue that the intent of GameStop was not to provide a solid investment as it was just as a collective intent to make short sellers fail. I have serious trouble seeing how “collective agreements” has any intrinsic value. To me, it’s effectively the same as saying “the value of coin X is that people believe in its value”. It seems like at least this CEO recognizes it for what it’s worth.
  - axg11 4y ago
    > I have serious trouble seeing how “collective agreements” has any intrinsic value. Then you probably don’t see value in any form of cryptocurrency. I do, because I think collective agreements are at the heart of how society functions. Fiat money is a collective agreement that works by the backing and enforcement of a central entity (government). It’s at least interesting to me to experiment with a collective agreement that does not have to be backed or enforced by a central entity (bitcoin).

api 4y ago

Regulatory capture by a Ponzi scheme was just added to my "list of things that could legitimately destroy the USA from within." Did Bernie Madoff ever do this? I feel like he did, but maybe not so effectively or at such scale.

throwaway_1928 4y ago
Madoff was different in that he successfully hid the fact that his was a ponzi scheme for 40 years. This interview with SBF suggests crypto does not even try and hide it.
rjeli 4y ago
Albania did, and it led to a civil war.
acjohnson55 4y ago
This has happened a number of times in this country. One major example is MLM, which was fully legitimized in 70s and 80s, after spending some time in a legal gray area. Ever since, the industry has expanded, even though it largely functions as wealth transfer from late arrivals to early incumbents, with a sprinkling of sustainable external commerce.

axg11 4y ago

Calling it a Ponzi scheme is uninteresting and not really the point here. Was GameStop a Ponzi scheme when the stock price soared? I think the interesting part here is the relation to bitcoin and a new theory on how to price things. It’s traditionally been assumed that the price of an asset is related to the underlying value it has or the value it generates (eg cash flow). SBF is pointing out that’s not a complete method of pricing assets in today’s world. You also have to factor in “collective agreements”. Bitcoin is the clearest example of an asset price that is driven by collective agreement. The collective agreement is enshrined in code and algorithms.

lemonlime 4y ago
"Collectives agreements" are not an innovation. Underlying value is precisely, simply and only, a collective agreement (made by the market, instantaneously in real time billions of times a day) about how much something is worth. Absolutely zero innovation there.
thawaya3113 4y ago
Whether it’s interesting or not, what the FTX CEO described is literally a Ponzi scheme.
stingraycharles 4y ago
> Calling it a Ponzi scheme is uninteresting and not really the point here. Was GameStop a Ponzi scheme when the stock price soared? I’d argue that the intent of GameStop was not to provide a solid investment as it was just as a collective intent to make short sellers fail. I have serious trouble seeing how “collective agreements” has any intrinsic value. To me, it’s effectively the same as saying “the value of coin X is that people believe in its value”. It seems like at least this CEO recognizes it for what it’s worth.
- axg11 4y ago
  > I have serious trouble seeing how “collective agreements” has any intrinsic value. Then you probably don’t see value in any form of cryptocurrency. I do, because I think collective agreements are at the heart of how society functions. Fiat money is a collective agreement that works by the backing and enforcement of a central entity (government). It’s at least interesting to me to experiment with a collective agreement that does not have to be backed or enforced by a central entity (bitcoin).