That's not even what i said. I said the other direction.
Ponzis are unethical, and wrong, and it always should be regardless of who is doing it and whether someone is benefiting from it.
I find crypto useful and innovative. I find making money through ponzis disguised as innovation wrong, they happen to be using crypto. That's what Luna was.
I'm so tired of people saying crypto is a ponzi scheme.
Maybe you think it's nonsense, or a bad investment, but it is not a ponzi scheme.
> A Ponzi scheme is an investment fraud in which clients are promised a large profit at little to no risk. Companies that engage in a Ponzi scheme focus all of their energy into attracting new clients to make investments. This new income is used to pay original investors their returns, marked as a profit from a legitimate transaction.
People conflate ponzi schemes and pyramid schemes as well.
However, I'm having trouble finding where it is not. Money paid out must come from new investors. If I buy crypto for $1, I need someone willing to buy it for $2 to make money. My returns come not from any utility, but from more people investing in it.
On basic: if ust coin(pegged to one dollar, so the target was to keep it at one dollar) lost value(under one dollar) new luna coins were created to buy ust coins.
So.. As long ust coin was under one dollar, it created more and more luna coins to buy ust coins.
I think luna started with like a few million coins and ended with something like 7 or 8 trillion coins, now the network is officially shutdown.
It was a horrible idea.
No matter how good your algorithm is, people will manipulate the open! Book of upcoming trades to make profits, and destroying the coin with it.
Its like knowing what vanguard bak will do, before they even start trading on top of that you can force them to trade im certain ways, because you know how they will react, with hundred percent accuracy!
I’m not saying it is or it isn’t. The thesis of the article is that it is, and the reasoning they provide is consistent with the definition of a ponzi scheme. So it’s consistent and your reasoning is no better than theirs until we have more evidence (ie it fails or it becomes the cornerstone of a long lived vibrant ecosystem)
Misleading people about the power of a technology doesn't make something a Ponzi scheme. You need to mislead investors about the origin of their returns. Purposeful speculation isn't a Ponzi scheme even if the speculators were misled about the thing they are speculating on.
Well yeah that's why Ponzi schemes suck. Why should it be acceptable to profit from a Ponzi scheme? It's not your money at that point, whether you realise it or not.
You are wrong. In a ponzi people are often encouraged to reinvest their gains. You only take the money of new investors to pay out early investors if really necessary (that is to maintain the illusion that the money is still there) otherwise you use the money for something else or yourself.
I disagree. You are right that the characteristic of a ponzi is that funds from new investors are used to pay existing investors.
But that is also a characteristic of crypto. You cannot buy anything for crypto without exchanging it for fiat, and for that you need a new investor to give you fiat for your cryptos. If all exchanges (incl. informal ones) close tomorrow, any crypto you hold is worthless.
Now, you could say that the same holds true for shares or real estate. But that is wrong. You can hold shares you bought ad infinitum, even if all stock exchanges close tomorrow, and would still receive your money's worth (approximately) in the form of dividends of the underlying company, or proceeds from the sale of said company, without ever selling those shares. You can live in a house or rent it out, and get your money's worth, without ever selling the house to someone else.
I don't see how you can get your money's worth with crypto without ever selling it to someone else.
A ponzi is when an investment that supposedly produces a return actually pays the funds needed to deliver that return from new entrants to the scheme rather than productive enterprise.
Given that there’s literally no productive return-producing enterprise underpinning any of this it’s totally fine to consider the word ponzi at least loosely applicable to the entire concept of cryptocurrency as practiced.
Ponzis are unethical, and wrong, and it always should be regardless of who is doing it and whether someone is benefiting from it.
I find crypto useful and innovative. I find making money through ponzis disguised as innovation wrong, they happen to be using crypto. That's what Luna was.
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