> I've had a hard time deciding whether the proponents really understand it (and all of its nuances) or if pretending you understand it in fact part of the game.
Along those lines, it always seemed like an Emperor's New Clothes kind of scam to me ("These are the finest hashes!"). There was always this dialog in my head when the crypto bros would extol it's virtues that went something like "Wait, it's just a hash, right? But what if they're on to something? Nah, they're not onto something... but they seem to be making money... but it seems like a ponzi scheme where the people who got in early can cash out, but the people who jump in later lose money... c'mon, how is it not a ponzi?"
> I don't understand crypto (didn't understand derivatives either)
Never invest in something you don't understand. That seems to have worked out for you as you didn't get caught up in it.
>In cryptocurrency, the perpetrators are honest and transparent about it being a ponzi scheme, but surround it in so much techno-babble that they make it sound like a ponzi schme is what you WANT.
I think this isn't quite right in all cases. I think some people know it's a Ponzi scheme and genuinely do want a Ponzi scheme. They just want to get in and out quickly. It's gambling. Sometimes you're a victim and you lose money, and sometimes it works out and you make money.
I've never heard anybody educated on the matter make this statement. It's always from someone that doesn't understand it and therefore thinks it's a scam.
> If something only has value because you think you can sell it to the next sucker for more, it is a ponzi scheme.
That's not what a ponzi scheme is.
In a ponzi scheme, there is a fictitious business model that's purported to be turning a profit, and its lack of profit is hidden by secretly using new inflows to pay off old investors.
In crypto, none of that is hidden. It's widely known that dollars cashed out by earlier investors come from the coffers of later investors. Since e.g. Bitcoin doesn't deceive people about being a profitable company, it's by definition not a ponzi scheme.
Edit: This is a discussion section. If you disagree with my comment, let's respectfully discuss it. I see a lot of voting and no replying.
> He does not understand crypto & is trying to sell his competing product.
This is the repeated refrain of crypto believers. "You just don't get it." And yet when I ask someone to explain it to me (not the technology, the economics) I get hand-waving, self-contradicting promises (e.g. universal identity + resistance to censorship), and appeals to greed ("you must like being poor").
When faced with this, I'm often reminded of Richard Feynman's oft-cited belief that "if you can't explain it to an undergrad student, you don't really understand it". So my conclusion is that either nobody understands cryptocurrency economics and thus no one has been able to sufficiently explain it or the explanations I've heard are complete and accurate - i.e. I do understand it, and it's an emperor with no clothes.
how many of these y'all need before you learn: all crypto is a scam. It never was anything else, it never will be anything else because it can not be anything else.
There's an awful lot of fancy piled on the simple fact that all crypto"currencies" are negative sum games. The only disagreement is whether this is an entirely new type of scam , a "Nakamoto Scheme" or the difference between these and the classic Ponzi are irrelevant like the difference between a CRT and a HDTV and then we are looking at a Ponzi.
> All crypto is a scam and it's so simple to see, it's astonishing anyone fell for this.
No, it is not.
Please try to set aside your hatred for all things crypto and understand that there is actual legitimate value in many of the crypto projects, and that the core proposition, that of decentralized peer to peer value transfer, is a legitimate and useful use case.
> I'm pretty sure it's nothing but a pyramid scheme, but I always gave the enthusiasts the benefit of the doubt.
So go find out? I’m quoting you here for the “pretty sure” part. Do a deep dive. I’be done deep dives on Bitcoin, Ethereum, Cardano, Monero, Nano, Iota, Hyperledger, BSC, Uniswap, Tether, Chainlink and cursory glances at dozens of other coins/tokens.
I’m a tech guy. I work on an operating system/embedded systems. Nothing about blockchains, DLTs, crypto, at its core is a scam to me. The author saying the “silent majority tech people” know its a scam is such nonsense to my experience. Every tech person I know thinks either A) its neat/super cool, or B) they don’t know anything about it besides memes.
Sure there are tons of misinformation, scams, and bullshit going on. That’s everywhere and is not special to crypto.
> First, you gave to either understand the underlying technology, or someone you trust have to understand it sufficiently to be able to say "this is bullshit", or "this is a great novel idea that makes a lot of sense".
> Then you invest a bit of your really disposable income in it
Sorry, but I find it a bit funny that in your "winning strategy" you seem to invest on the second step regardless if you in the first step ended in the "this is bullshit" or not. (full disclosure, so far, every crypto thing I have seen has fallen to the "this is bullshit" bucket in my opinion. But I guess my "if it looks, walks and smells like bullshit, don't touch it with a ten foot pole" is not a winnig strategy.)
> I don't understand crypto (didn't understand derivatives either). I have worried that my ignorance will cost me in investing — that people smarter than me are going to make bank while I'm derp-derping with my index funds.
There are two sides to crypto. There is the technology side (blockchains, cryptography, consensus) and there is the finance side, the financial products on the blockchain. If you're an engineer you'll easily understand the technology side but there's no way around spending a significant amount of time learning about (traditional) finance to understand how exchanges, derivatives, market making, monetary policy, loans, leverage, and so on work. All of the same ideas apply to crypto.
This "absurd set of rules" mostly applies to the technology side, not the finance side. If you strip out all the marketing, the financial products you find on the blockchain are no different from the products you find in traditional financial institutions, with maybe a few exceptions like AMMs or stablecoins.
My experience has been that the people who understand crypto and who are successful are NOT the people who understand technology, but mostly the people who come from a finance background and can pattern-match their experience to crypto.
> They want me to invest my crypto to which they would pay me 7% interest. If you ask how it was it being invested you're told they were buying bitcoin in one part of the world and selling it in another.
Nigerian princes keep telling me they are in dire trouble and I need to pay them while they are in exile, I don't think this internet or email thing is going to work out.
For being a tech based, and entrepreneurial no less, forum I struggle to think the average age of most in this space isn't some 70 year old boomer most times given how many lazy conclusions get thrown around here.
If you really are foolish enough to give your money to scammers on the promise of 'guaranteed' returns regardless of market conditions, that says more about you ten the tech they are using to achieve said grift.
> How is that any different an explanation than Ponzi's
SBF, Do Kwon ELison et al... are all Ivy League educated, and just as reputable as Madoff or any other pump and dumper using an ICO or alt promising the same thing: something that cannot and will not exist, guaranteed returns.
In short, most alts are BS and don't need to exist, and anyone with a cursory understanding of fintech can see that; that doesn't mean the tech itself isn't valuable and doesn't have many use-cases that may not apply you specifically.
> And the bros...so many crypto bros. Is crypto an investment? sure. is it good smart financial sense? of course! can it deworm the dog and start my old Ford? buddy, its crypto and these nonsense peddling talking heads are about to waste your entire lunch reminding you that no matter how volatile the coin, no matter how hair-brained the leadership, and no matter how laughable the mascot, we'll all be rich by the end of the year and you have $wondercoin to thank for it. just dont ask them how blockchain actually works...it works and it aughta be used for everything...
Ive been around sine YC was ran by Sam Altman and thought to be the King maker of the valley startup scene, who then joined open AI and subsequently pitched WolrdCoin that required biometrics in return of some tokens 'to save the World' but is now the darling of SV because of ChatGPT.
I'd respect your arguments if they were at all cognizant of some basic premises, not least of which include being able to see the hypocrisy in these pointless analysis.
I'm not a crypto bro, I guess I'm a BTC maxi according to the jargon, but the truth is that it has been understood that a fool and their money are soon parted long before the computer ever came to existence and to attribute all of Society's ills to something most don't even comprehend, as in cant tell te difference between Bitcoin the network and bitcoin the token, let alone the underlying mechanics that solved something thought to be impossible in Computer Science (Byzantine General's problem) then what is their really left to be said?
> While I share the sentiment, I am not sure if it is because I just haven't understood the details behind NFTs, crypto and so on or if I actually understand enough to grasp a reality.
NFTs have been around for five years (or longer, depending on definition). Given that in that time no-one has been able to convincingly articulate why they're useful, one could be forgiven for assuming that there is no there there.
> made me feel like an idiot for ever thinking that cryptocurrency was a good idea
The very broad notion of digital currency involving cryptography is as good, bad or ugly as any number of other everyday concepts and mechanisms. There's no special inherent evil in that broad notion.
Your investment choice, on the other hand, was average. Not terrible. Average. That is, you diversified, you lost some, but you're still around to play the game, and still ranking very highly in the overall human race affluence stakes.
Snake Oil, or even simpler, mundanely-poor investments, from all walks of life, are the true basis of idiot bait. Digital currency involving cryptography simply is what it is. It's quite likely that the near-to-medium future of humanity will involve quite a lot of it, in some form or another (not at all like most of the current forms, of course).
> I just don't understand it at all at this point. I understand how people would have been duped by the scams before all of the prominent failures, but why are people still willing to trade crypto for so much actual money?
Probably the same reason people throw money at casinos. Despite tales of people losing the shirts on their backs, there are also those that hit the jackpot. The biggest winners are of course the casinos who facilitate the transfer of wealth between the aforementioned groups while directly or indirectly taking a nice cut for themselves.
> but to outright dismiss it as a scam/only for criminals/the worst thing on Earth is blindly emotive
I mean but you came up with one maybe kinda plausible use case just to better than I could dismiss why it would be a piece of shit anyway - and that most importantly it doesn’t solve the hard problems.
It’s not emotive - I just want an existence proof of something useful that isn’t purchases or transactions I want off the grid.
I don’t think money laundering or concealing transactions is necessarily criminal - but the only real use of crypto assets for transactions is to do stuff someone powerful doesn’t think you should be doing.
I don’t know, I am not into crypto. I assume you might have to ask one of the many thousands of people that have lost untold quantities of money to a nearly infinite number of scams why they might question the practical value of the crypto ecosystem.
Along those lines, it always seemed like an Emperor's New Clothes kind of scam to me ("These are the finest hashes!"). There was always this dialog in my head when the crypto bros would extol it's virtues that went something like "Wait, it's just a hash, right? But what if they're on to something? Nah, they're not onto something... but they seem to be making money... but it seems like a ponzi scheme where the people who got in early can cash out, but the people who jump in later lose money... c'mon, how is it not a ponzi?"
> I don't understand crypto (didn't understand derivatives either)
Never invest in something you don't understand. That seems to have worked out for you as you didn't get caught up in it.
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