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As was pointed out in a podcast I listened to this week, you’ve essentially described a Ponzi scheme. Fundamentally, making gains on crypto requires someone els

As was pointed out in a podcast I listened to this week, you’ve essentially described a Ponzi scheme. Fundamentally, making gains on crypto requires someone else showing up and putting money in so you can get yours out. It’s more obvious with NFTs because they’re not pretending to also be money.

junofan 4y ago
He’s describing a speculative bubble, not a Ponzi scheme. By your definition any enterprise where money flows in and out and involves more than one party is a Ponzi scheme.
- chx 4y ago
  Nah. 1. If bitcoin didn't have transaction fees and you have unrolled every bitcoin transaction ever made, everyone would have the same amount of money they started with. This is called a zero sum game. 2. But it does have transaction fees so if you did the same in the real world then the miners would be ahead and everyone else would lose. This is called a negative sum game or a scam. 3. If you were to do the same to, say, every Intel stock, then you'd be ahead because of the dividends paid.
  - WanderPanda 4y ago
    This is just true if you assume the transactions have zero value which seems unlikely given that in general most transactions/commerce creates a lot of value.
  - nwiswell 4y ago
    This is silly. Way too many things would meet this standard for "scam"/"ponzi". Gold for example: it costs money to dig it out of the ground, and critically to keep it stored securely, insured, tested for purity, etc. Consider how much money the USA must spend keeping its gold stockpile safe! Those are pure drags on the system so indeed the total amount spent on gold must always be more than net proceeds from gold sales after accounting for cost of ownership. I'm sure there are many such examples.
    - boxed 4y ago
      A ponzi scheme can turn into a roughly zero sum game if there isn't a rush but instead stable behavior over hundreds of years. Which is exactly what you describe with gold. Plus, gold actually does have some industrial uses so its value is actually somewhat greater than zero even if people one day woke up and didn't think it looked good for jewelry :P

junofan 4y ago

He’s describing a speculative bubble, not a Ponzi scheme. By your definition any enterprise where money flows in and out and involves more than one party is a Ponzi scheme.

chx 4y ago
Nah. 1. If bitcoin didn't have transaction fees and you have unrolled every bitcoin transaction ever made, everyone would have the same amount of money they started with. This is called a zero sum game. 2. But it does have transaction fees so if you did the same in the real world then the miners would be ahead and everyone else would lose. This is called a negative sum game or a scam. 3. If you were to do the same to, say, every Intel stock, then you'd be ahead because of the dividends paid.
- WanderPanda 4y ago
  This is just true if you assume the transactions have zero value which seems unlikely given that in general most transactions/commerce creates a lot of value.
- nwiswell 4y ago
  This is silly. Way too many things would meet this standard for "scam"/"ponzi". Gold for example: it costs money to dig it out of the ground, and critically to keep it stored securely, insured, tested for purity, etc. Consider how much money the USA must spend keeping its gold stockpile safe! Those are pure drags on the system so indeed the total amount spent on gold must always be more than net proceeds from gold sales after accounting for cost of ownership. I'm sure there are many such examples.
  - boxed 4y ago
    A ponzi scheme can turn into a roughly zero sum game if there isn't a rush but instead stable behavior over hundreds of years. Which is exactly what you describe with gold. Plus, gold actually does have some industrial uses so its value is actually somewhat greater than zero even if people one day woke up and didn't think it looked good for jewelry :P