‘The Entire Cryptocurrency Market Is Basically a Ponzi Scheme’

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    • #470585
      eridani
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      • Total Posts: 11,935

      https://fair.org/home/the-entire-cryptocurrency-market-is-basically-a-ponzi-scheme/

      I would probably start by saying despite the name, these are not really currencies. Bitcoin was kind of started that way, at least in intent. But they really are just financial assets, and they get traded on financial markets kind of in the way stocks would.

      But the big difference is that stocks are like legal ownership in a company, whereas cryptocurrencies are basically nothing. They’re basically just digital cells on a spreadsheet that people trade back and forth. They’re like digital Chuck E. Cheese tokens, almost, just in the sense that there’s nothing, there literally is nothing underneath any of them. And there are a lot of cryptocurrencies now besides Bitcoin, and many of them market themselves in different industries. Honestly, it’s entirely speculative. All of that’s just hype, and it doesn’t really mean anything. They’re basically just speculative assets.

      I think that it’s rooted in libertarian ideology to a certain degree. The person who invented the Bitcoin network did so after the 2008 crash, and the white paper for Bitcoin actually says it’s in response to the 2008 crash. And a lot of libertarians, frankly, have glommed onto this. And they sell it, as you said, as being good for the little guy. But it misses the mark, because the issue with the 2008 crash was that the banking system was under-regulated. And this is kind of exactly the opposite. These are people who want to privatize financial markets entirely. Because cryptocurrencies, I mean, the one thing they do well is that they are decentralized. They are decentralized networks. There’s no central managing authority, at least the Bitcoin blockchain isn’t, right? And, yeah, it’s just like they’re privatized money, privatized financial markets. And to me, that’s the opposite of what we want, to avoid another major crash.

      I think the only way going forward is just to ban them entirely. And that’s what other countries are starting to do. China’s banned crypto entirely. India’s about to. Russia’s about to. And they’ve all talked about issuing their own state cryptocurrencies. But these aren’t going to be the same all-a-marketing-gimmick, actually private crypto that are being banned in all these other countries. And I see it as really the only way, because these are private companies issuing these stablecoins. There is no way we can stop anyone from some other country, outside of our own jurisdiction, from opening an exchange, printing their own stablecoins and continuing their Ponzi. Because Tether is not the only company doing this, even though that’s the one that we’ve talked about. There are multiple ones.

      Jesus: Hey, Dad? God: Yes, Son? Jesus: Western civilization followed me home. Can I keep it? God: Certainly not! And put it down this minute--you don't know where it's been! Tom Robbins in Another Roadside Attraction

    • #470602
      Voltairine
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      • Total Posts: 2,567

      In most simple terms, Ponzi and/or Pyramid scheme is a system that needs to grow exponentially to avoid collapse. The money creation algorithms of Central Bank fiats (CBF ) are mathematically ponzies. As CBF money is created as debt, with interest on top, there’s systemically always more debt – negative money – than the system can produce positive money. And the amount of of negative money to  create an amount of positive money keeps increasing. 2008 was a major sign of the whole ponzi collapsing, and the reaction of TPTB was to double down, triple down, n-down exponentially to create bigger and bigger mountains of negative money, debt that can’t ever be payed back.

      Sure, you can create ponzi games also with blockchain tech. The tech is neutral in that sense. You can create pumb and dump schemes. There’s been loads of those. But cryptocurrency Markes as whole a Ponzi? Nope. Bitcoin, the first and biggest based on Austrian school recipe of money creation, is highly deflationary, as a market platform it’s the opposite of a Ponzi. Bitcoin was created as an antidote to financial ponzi capitalism. And astonishingly, Bitcoin is firmly en route of becoming the next global reserve currency, as the Dollar ponzi is collapsing. Sure, in terms of macroeconomics and social stability, Austrian school recipe of monetary creation and initial distribution has huge problems for a sound means of exchange. Deflationary systems are good for the store of value function, and having a decentralized non-state global reserve currency will ge truly revolutionary step.

      Of course socdems, liberals, neolibcons and other corporate fascists hate the idea that their parasitic centralized bureaucracies lose their ability to steal from caring classes, productive classes, working classes; that they lose their ability of imperialism and perpetual class war against peoples enslaved by centralized bureaucracies.

      Cryptocurrencies are not merely “a market”. They are evolutionary environment for innovating, developing and testing new and better market platforms to replace the collapsing central bank ponzies, to wither away the state, the bloodiest religion of all.  And in order to wither away the state completely, with Turing complete blockchain ecosystems, the blockchain revolution offers technical means to innovate, develope, test and spread full social contracts and fast and efficient evolution of those. Based on that evolution, genuine World peace and global inclusive and nurturing society without state and class borders is practically doable in a generation.

      Do you wanna put your hope in voting Democratic party, and more and more authoritarian and totalitarian corporate fascism, or do you wanna embrace the future where we can learn to trust each other as peers, and cooperate to create better and better win-win games?

      Aloha!

    • #470723
      snot
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      • Total Posts: 1,517

      There’s nothing very bad you can say about Bitcoin that isn’t also true of the dollar, with one exception:

      The dollar is at present more widely accepted (but acceptance of BTC has been growing steadily).

      (Although I suppose you could also say that, even though the dollar isn’t backed by anything anymore – the dollar and existing cryptocurrencies are all fiat – the dollar is “backed” by US military dominance; however, that comes at a cost so great that I’m not sure it shouldn’t count as anything above zero.)

      On the other hand, Bitcoin offers several very important advantages that are not available with the dollar (or other crypto that I’m aware of, including any Central Bank Digital Currency currently contemplated by our fearless leaders).  Some of these advantages:

      The supply of Bitcoin is strictly limited per its very DNA and cannot be modified by anyone, thus rendering it proof against hyperinflation and other shenanigans – unlike the supplies of dollars and all other crypto I’m aware of, including any contemplated CBDC, which are controlled by centralized cabals.

      BTC transactions also afford greater privacy and need not involve any middlemen or participation in any SWIFT-like system, and if you know how to keep your coins securely, they’re nearly impossible to steal or confiscate.

      (You can’t understand these things without getting into the weeds, which very few people are doing and which TPTB hope you won’t bother to do.)

      Destruction is easy; creation is hard, but more interesting.

    • #471204
      eridani
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      • Total Posts: 11,935

      Bullshit.  It is also financial Ponzi capitalism.

      Jesus: Hey, Dad? God: Yes, Son? Jesus: Western civilization followed me home. Can I keep it? God: Certainly not! And put it down this minute--you don't know where it's been! Tom Robbins in Another Roadside Attraction

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