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Is USD a scam? It's based on "faith" but pretty much works. Does that make it legit or a scam? If you have enough bombs and willing to spill enough blood to def

by andirk 4y ago

Is USD a scam? It's based on "faith" but pretty much works. Does that make it legit or a scam? If you have enough bombs and willing to spill enough blood to defend said faith, then it's legit? Crypto is a broad term and you paint it with 1 color: scam!

KaiserPro 4y ago
> Is USD a scam? not really. unless you treat large parts of capitalism a scam. (thats rhetorical by the way) Binance which lost $570M in one hack, knowingly promoted flawed investments and lied to regulators however, could be described as an unreliable finance partner.
- phyalow 4y ago
  I mean you could also lump nearly almost every single major investment bank and commercial bank in the category “unreliable finance partner”…
chx 4y ago
Crypto"currencies" are a scam because they are a negative sum game. Imagine an empty room. A few people come in with money in their pockets and play a few rounds of a card game. When they leave, since nothing was in the room before and nothing is in there after, it's obvious the total sum of money couldn't change. Some got richer, some got poorer but the total is the same. If they decided to exchange money for plastic chips to be used during their games and exchange it for money at the end, the same is still true. However, if someone takes a cut every time chips are moved then that person is guaranteed to win and the players in total are guaranteed to lose. If you have a game where you know who is the winner and who are the loser without knowing anything about the game, I believe it's fair to call that a scam. No, stocks are not like this because they produce dividends and gold is not like this either because there are consumers (jewelers, electronics industry) who buy gold add value to it and only sell the value added product. With a crypto"currency" none of this happens. You buy coins, sell the same and they just rot ("HODL" in modern parlance) meanwhile. And you lose money on every transaction. Sure, the price change might mean you leave with a monetary profit but it only means a greater fool is now sitting on a larger loss. This is a very novel scam for many obvious reasons but that doesn't mean it's not a scam.
- deleted 4y ago
  [deleted]
- zeroclip 4y ago
  Users get value out of sending tokens, holding stablecoins, and interacting with smart contracts. The price can go up or down but who cares, if they are using stable tokens or just using ETH to pay gas fees. They might be happy to part with a small amount, paying whoever is facilitating the transfers and helping run the network. Just like how payment processors work like PayPal. They take a cut on each transaction. The difference with validators in a blockchain is that it’s permissionless.. Anybody in the room can participate and capture a % of these transaction fees.
  - chx 4y ago
    This is smoke and mirrors. Focus on how much money the totality of current and past coinholders have. It'll be the negative sum of the transaction fees paid. This is all there is.
    - zeroclip 4y ago
      I don’t understand your logic. Users pay 0.01 ETH for gas fees to perform some action like transfer USDC from A to B. Majority of that fee is burned but some small percentage goes toward a validator for their services. The price of Eth may even depreciate in the days or weeks that follow, leaving the validators with less fiat value than they had when this whole exchange began, and parties A and B are no worse off. What is negative sum in this example?
      - chx 4y ago
        Let's presume no one has any coins yet. A has mined some coins which B buys for 100 USD. Now A has less than 100 USD because the transaction costed something and B has 0 USD. Together they already lost money. This will only get worse. Let's say B can convince C to buy his coin for 1000 USD from, say, an interest free bank loan. Aye, B has 1000 USD minus transaction fee so they made a profit but C has -1000 USD. Altogether they are short on money.

by andirk 4y ago

KaiserPro 4y ago

> Is USD a scam? not really. unless you treat large parts of capitalism a scam. (thats rhetorical by the way) Binance which lost $570M in one hack, knowingly promoted flawed investments and lied to regulators however, could be described as an unreliable finance partner.

phyalow 4y ago
I mean you could also lump nearly almost every single major investment bank and commercial bank in the category “unreliable finance partner”…

chx 4y ago

Crypto"currencies" are a scam because they are a negative sum game. Imagine an empty room. A few people come in with money in their pockets and play a few rounds of a card game. When they leave, since nothing was in the room before and nothing is in there after, it's obvious the total sum of money couldn't change. Some got richer, some got poorer but the total is the same. If they decided to exchange money for plastic chips to be used during their games and exchange it for money at the end, the same is still true. However, if someone takes a cut every time chips are moved then that person is guaranteed to win and the players in total are guaranteed to lose. If you have a game where you know who is the winner and who are the loser without knowing anything about the game, I believe it's fair to call that a scam. No, stocks are not like this because they produce dividends and gold is not like this either because there are consumers (jewelers, electronics industry) who buy gold add value to it and only sell the value added product. With a crypto"currency" none of this happens. You buy coins, sell the same and they just rot ("HODL" in modern parlance) meanwhile. And you lose money on every transaction. Sure, the price change might mean you leave with a monetary profit but it only means a greater fool is now sitting on a larger loss. This is a very novel scam for many obvious reasons but that doesn't mean it's not a scam.

deleted 4y ago
[deleted]
zeroclip 4y ago
Users get value out of sending tokens, holding stablecoins, and interacting with smart contracts. The price can go up or down but who cares, if they are using stable tokens or just using ETH to pay gas fees. They might be happy to part with a small amount, paying whoever is facilitating the transfers and helping run the network. Just like how payment processors work like PayPal. They take a cut on each transaction. The difference with validators in a blockchain is that it’s permissionless.. Anybody in the room can participate and capture a % of these transaction fees.
- chx 4y ago
  This is smoke and mirrors. Focus on how much money the totality of current and past coinholders have. It'll be the negative sum of the transaction fees paid. This is all there is.
  - zeroclip 4y ago
    I don’t understand your logic. Users pay 0.01 ETH for gas fees to perform some action like transfer USDC from A to B. Majority of that fee is burned but some small percentage goes toward a validator for their services. The price of Eth may even depreciate in the days or weeks that follow, leaving the validators with less fiat value than they had when this whole exchange began, and parties A and B are no worse off. What is negative sum in this example?
    - chx 4y ago
      Let's presume no one has any coins yet. A has mined some coins which B buys for 100 USD. Now A has less than 100 USD because the transaction costed something and B has 0 USD. Together they already lost money. This will only get worse. Let's say B can convince C to buy his coin for 1000 USD from, say, an interest free bank loan. Aye, B has 1000 USD minus transaction fee so they made a profit but C has -1000 USD. Altogether they are short on money.