Cryptocurrency in its purest is money not issued or controlled by a government. Instead the supply inflation is controlled by transparent rules that are plain to see. “Protocol-based finance” vs. the existing government-based finance.
Now there are all manner of divergences from the above paragraph. Coins that are totally controlled and issued by a small group or company. Black box rules rather than transparent.
There are also huge trade offs with not having a central entity - lose your private key and lose your money for example.
Does this make the entire industry a Ponzi? No. There are legitimate uses for crypto, and even if I listed a whole bunch here the HN skeptics would disagree, but certainly buying drugs online is a real use case, which crypto excels at. You may say that’s morally wrong but it is still a use case, for better or worse.
It isn't money. Money can be easily exchanged for goods and services. It is a digital "asset" whose only meaningful application is speculative trading...of itself. If something only has value because you think you can sell it to the next sucker for more, it is a ponzi scheme.
Where does Amazon accept cash on delivery?
Also, by this logic Amazon accepts electronic cash that can be "bought" with crypto, right? Maybe dollars are just gift cards for bitcoin :P
> Cash on Delivery is available as a payment method for fulfilled by Amazon and some seller fulfilled items. If you have Gift Card balance in your account, you can redeem it and pay the remaining amount using Cash on Delivery payment method.
It’s quite easy to convert crypto into Amazon gift cards, which can then be used to buy stuff on Amazon. So it’s not exactly a big hop to go from crypto to Amazon.
Of course Amazon accepts cash. Cash on Delivery is one way. [1] Other ways are listed on Amazon's webpage entitled "Shop on Amazon, pay in cash". [2] Also, Amazon has teamed up with Western Union for your cash oriented shopping needs. [3]
A crypto exchange or vpn is not quite the same as a store that sells goods like groceries, clothes or electronics or services like a lawyer's time, a doctor's visit or a haircut. I don't see any mainstream websites listed on that website. Regular people are unable to use crypto as money for regular things.
VPN industry is multi-billion, crypto exchanges are multi-billion, hosting is multi-billion. These are real industries - I mean a lot of people on HN are employed in companies that support and provide data / server hosting.
It starts with digital services and it spiders out from there. Enthusiasts who own retail stores accept crypto as a novelty or marketing strategy, but in 25 years it could be much more common.
None of that actually applies to this discussion, which is about crypto not being money. The example given for crypto being money was a website that listed things that are not goods and services people use to live their lives. The goods that people use to live are not vpns and secret crypto exchanges but groceries, automobiles, clothing, doctor appointments, etc.
If you have some other list of goods and services that people can repeatedly and reliably purchase using crypto, you can provide that to show that crypto is money. The earlier list is almost entirely crypto exchanges and vpns, which is hardly a useful list of goods and services for normal day to day products that people use.
If you can't purchase goods and services with crypto, crypto is not money.
The first electric car was made over 100 years ago and they are still only a fraction of all the cars on the road. Revolutionary tech doesn’t always take over in 10 years let alone 100.
You're pushing a fake, invented history. Electric cars existed in the 1830's - about 200 years ago and 52 prior to gasoline powered cars. Electric cars were supplanted by gasoline powered cars. It's NOT that they just haven't caught on, yet.
> If something only has value because you think you can sell it to the next sucker for more, it is a ponzi scheme.
Careful with that sentence. It is applicable to paintings, stamps, and collecting in general. True that on those other cases you have a physical object, so it has a value (as opposed to nft) but usually it's far less. A Pokemon card costs almost nothing, but some people are willing to pay millions for it, so it "costs" millions.
Disclaimer: I still agree with your comment, I just think that the reason is more complex than that sentence.
This seems like a good point. I'm not sure I agree about paintings, but sure let's take Pokemon cards. These have only a little bit of intrinsic value - you can use them to play a game that is fun for 8 year olds. They only become more valuable because people speculate that their value may increase in the future. Why do they think that?
Well, it happened with baseball cards and comics, and then everything else. But let's go back to baseball cards. Why did some of them become so valuable? Just a guess but maybe its because they became rare, yet retained nostalgia value. Kids who bought them in the 20s and 30s treated them like the worthless scraps of cardboard that they were. Most were lost or destroyed. But decades later if they came across some they evoked a powerful emotion, maybe the sort of emotion I feel when see the login prompt on a Vic-20 maybe. So they started collecting them, and of course they had the most demand for the legendary players who they idolized as kids, so the value of those went up. After that, its mostly just people speculating. But there was a kernel of real value there to begin.
Stamps and other collections are fun to collect and to have, regardless of their monetary value. (After all, people collect otherwise-worthless things like bottle caps, too.)
Cryptocurrencies have no substance to them, they are not interesting to look at, and while I suppose one could get a thrill out of simply knowing one has them, I very much doubt that there's more than a tiny handful of people for whom that would remain true if they were worth $0.
> I very much doubt that there's more than a tiny handful of people for whom that would remain true if they were worth $0
By now they’re a part of our history. I keep a professionally made, empty paper wallet as a souvenir from the 2010s. It’s a lot more tangible than some scrap of paper with 24 random words on it.
And it is somehow 'money' only when it suits projects and places like HN. [0] I'm sure any of you would immediately rush to sell 299 Ethereum right now, even if it ran through a Tornado.cash mixer, otherwise you would leave it alone if you believe that it isn't money or worth anything.
> If something only has value because you think you can sell it to the next sucker for more, it is a ponzi scheme.
The very first comment on that use case is, "Please allow me to offer you a free rsync.net account, in perpetuity, for the backup portion of your requirements." [1] Saying that the use case for Monero is to compete with zero-cost services doesn't offer a compelling use-case for Monero.
> 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.
You (but not many other people) can purchase liquor and sex, but you can't go to a grocery store the next morning and buy coffee for your hangover. You can't replace your totaled car that was lost during your escapades, either.
Since clearly you can buy things for Bitcoin, it is money.
You can speculate on the value of any currency. I’ve earned thousands extra this year by invoicing foreign currencies at the right time, at no loss of my customers.
Bitcoin only has value for me because of the things I can buy with Bitcoin. (Privacy preserving technology, online services, drugs, helping friends of friends get out of Ukraine.)
No, the things you mentioned don’t. The argument the article made, that almost all the dollars and euros and yen crypto spits out come from investment, does.
That some people are buying drugs and financing terrorism or Pyongyang dilutes the Ponzi case. Those are examples of utility. But I’m not sure that’s the defence crypto was looking for.
Stablecoins such as USDC and Tether (although despised by many) are used for non-criminal cross border transfers and savings accounts. Here is a recent episode of EconTalk that explains the use case in Argentina https://podcasts.apple.com/us/podcast/econtalk/id135066958?i...
Crypto doesn't even excel at buying drugs online. The fact that it's a permanent ledger of transactions means the purchase could be trivially linked to you by law enforcement, unless you jumped through all the necessary hoops to also anonymize it. Which most people don't.
This is why I invested in Monero years ago, when it was under a dollar. I concluded that since the only actual application of crypto up to that time was selling illegal goods and services on black markets like silk road, that it was really the only coin that made sense at the time (I'm sure others replicated it). AFAIK it is still considered untraceable, but the value peeked years ago around $400 IIRC. I made some decent money on it though and still HODL some.
Many people would think it's ethical, if anything morally positive. Do your part in demonstrating to the govt that if it plays stupid games (in this case, seeing if Prohibition would work better the 2nd time around), it would win stupid prizes!
Monero is digital cash. Cash is also used to buy drugs, but we do not ban it. I feel that financial privacy is a human right just like any other form of privacy. If you disagree then please post your last month’s bank statement in response to this comment.
I think parent commenter's argument is that it's hard to get excited about crypto just based on the fact that it allows some people buy drugs online. While millions of investors lose a ton of money to crypto scams.
If you generalize from drugs example, crypto (may) help you do things governments do not want you to do. Drugs are just one widespread restriction; and you may view Western governments as generally competent and benevolent (to be clear, I do not), and drug prohibition as necessary evil.
But it's hard to claim that most governments around the world and competent and benevolent, and easy to get excited about people being able to bypass things from capital controls and ruinous inflation, to outright censorship and confiscations. Not that I think crypto would actually succeed, but I hope it does.
I would love to agree with this argument. And maybe 5 years ago I would have. But so far crypto has not demonstrated that it can really solve the issues you are listing. Yes, it can result in some capital outflow from oppressive countries, but that does not have a big impact on these people or the regimes. The stories that are being written are not of a hard-working farmer who was able to save some monero and move it to a different country anonymously. Instead, we are seeing millions of people lose their savings and/or investments. I acknowledge that things might change in the future. But as of now I am not optimistic.
The main difference here precisely "not your keys not your coins". Replacing govt-influenced/controlled banks with some rando pseudo-bank is only a net positive for a really terrible govt...
And because of the complexity, I doubt crypto will succeed in its goal. It might get regulated but then it's probably no better than banks, since it would be restricted from the uses a govt doesn't like similarly to money in a bank.
The problem is HN is an exhausting circular firing squad when it comes to crypto. I could extol the benefits of private currency on philosophical and moral grounds but this won’t convince a lot of people. So I try to put it in more concrete terms and then it’s either criticized or brushed off.
If you believe as I do that government control of money is a mistake for many different reasons, then crypto is a revolutionary technology. If you say “Bitcoin has all the problems” then I refer you to monero.
No, that's not the issue. The problem with crypto is the grift -- and the inability to see what's a grift and what's not. I believe the term "rug pull" is the vernacular in the crypto community you may be familiar with.
Nikola (US public company) was a grift and thousands of retail traders lost money despite all the protections of the SEC and other regulators. The CEO is going to jail but most people will get very little in compensation, if anything.
If the current system is so flawless, why does this keep happening? Clearly the system is not flawless.
I myself am extremely technical and able to understand the crypto industry. I can separate scams from not-scams.
Similarly, the Machine Learning / AI industry is chock full of charlatans and scammers who have stolen billions from investors. For example, Watson from IBM is a hyped technology and product that has now been shuttered.
The unique element of crypto is a retail investor can put their life savings into a scam. This is unfortunate but not a reason to ban the tech.
Nothing stops a lower-class person from entering a casino or using a sports betting app and losing their house. The pearl clutching on HN is legendary.
By many accounts moving around and dealing with large values in cash is inconvenient and cumbersome compared with the relative ease of moving crytpo between holders.
To the point where cartels end up with literal huge piles of money in warehouses and resort to complicated operations to try and move it across borders.
> unless you jumped through all the necessary hoops to also anonymize it
There's a single hoop, and it's Monero.
It always confuses me when people say that crypto doesn't excel at buying drugs online. Out of all the things crypto does and does not do well, that one shouldn't be in dispute.
I used to agree with you; but I think this line of thinking takes a (core) feature of money (trust in its value) and reduces the whole thing down to just it. Fiat money has another core feature in its definition: that you can pay taxes to a government using that currency. Similarly, equity in a company comes with dividends: a core cashflow that you can predict based on P&L. Trust in their current (and most importantly future) value, is a (big) aspect of it, but not the only one: there's actually a predictable "base" value that you can use to calculate a floor to that value. The future value is just the ceiling to that prediction.
Crypto is only trust. Without that social trust, there's no minimum value. That doesn't mean there is no value, just that the floor can go away, that the entire thing is much more volatile. So basically, gambling. This is not a value judgement btw, gambling and volatile assets can be fun and profitable; they are just not currencies.
The counterpoint to the “fiat mindset” (not to criticize you, but how I categorize it) is gold. There is no reason why gold is valued so highly other than historical and traditional reasons - its industrial utility is far lower than its monetized value.
IMO Bitcoin is superior to gold in nearly every single aspect. The only thing it doesn’t have is 5000 years of human belief in its worth.
If you understand logically why gold in 2022 has a monetary premium above its industrial value, then you can logically reason about Bitcoin and its value.
If you accept that Bitcoin has long term utility and value, then it isn’t a stretch to start analyzing other coins on similar valuation heuristics.
That's a good counter; but gold does have a minimum value separate from trust in its future value: it can be used for jewelry / metallurgical applications, etc. and it won't rust / oxidize. And gold is a lousy currency: risky, expensive to store, tied to natural resources, etc.; I guess just like BC :-)
It has a minimal value but it’s far less than its monetary premium. If you are investing in gold (as many mainstream wealth managers and central banks do) then you aren’t assessing “what is the minimum my investment can fall to based on fundamental industrial utility?” The investment thesis for gold completely ignores any potential for demonetization or else the investment is suicidal.
That's fair. But then your investment thesis is based on the value given to gold by large institutions that can/will create a price floor. Which yes, is absolutely based on trust-in-future-value, but in the case of gold that trust is widespread and tied to large, centralized financial institutions and thus regulations and eventually fiat (because in the end you will have to convert to fiat).
I can see that getting replicated for BC, but other crypto, not so much. A better, digital, asset than gold makes sense, but distributed, slow, state machines? Still don't get those...
Despite my username I am not a maximalist on any technology. Ethereum is very interesting and there are a number of scaling solutions (referred to as “layer 2s” or L2s) that have the same guarantees as the main chain but are far cheaper and faster (see Optimism and Arbitrum).
In Bitcoin the lightning network is slowly but steadily making progress amongst the faithful. It is also a faster and cheaper network.
Monero is the currency I recommend heavily because it is privacy-by-default - anyone who uses Monero is not broadcasting their intentions. This is an extremely valuable aspect of financial freedom and it gives me long term faith in its utility.
The key thing to remember is that all value is subjective. Someone will pay infinite money for a glass of water when they are dying of thirst and no money when they are drowning.
If a large portion of society values digital assets, then they have value. There is really nothing more complex than this for anyone to understand.
It's a use case that doesn't solve the problem with trust. Parties have to trust each other or use escrow. So, it solves only the "government control" problem.
But I agree, crypto is not just a Ponzi scheme. It's an enormous investment into the world of criminals - individuals and organizations.
Splitting hairs could be a reasonable expectation but at this point right after the FTX debacle it's not warranted.
Any sufficiently complex system can have minor benefits while overall be considered extremely harmful. Cancer can make you lose weight. Nazi Germany built great highways.
The success of crypto is very strange/alien to me.
The scam seems so obvious, and yet it "works".
I guess that I tend to underestimate how many people love gambling with money and/or are attracted to get-rich-quick schemes.
There is seemingly also a small fraction of true believers, idealists and evangelists who seem convinced that all of this could replace both states and banks without ending up much worse.
Madoff is the ultimate example of a ponzi scheme done well.
1. The "mark" trades his dollars for something he/she thinks is of value, in Madoff's case it was a balance in the Madoff fund.
2. The fund increases the "balance" for the marks, making them think their money is actually increasing in value. This discourages people from wanting their money back. Meanwhile the actual dollars is squirrelled away to some series of numbered accounts.
3. The ponzi scheme is only exposed when there's a run, which happened to Madoff in 2008 during the financial crisis.
It always surprises me how a tech/startup oriented forum like HN is so negative towards crypto.
I think it's insane that someone invented an algorithm to transfer value over the internet, without the involvement of a central party. Basically as soon as it has a tiny bit of value, you can transfer it, and so it has value.
It goes so far that you could store the private key in your head, and therefore use your head as basically a bank account, only accessible to you.
Plus, if you're living in Hong Kong and want to get paid for something the government thinks is illegal, you can always get paid in Monero, like this guy: https://news.ycombinator.com/item?id=31996612
Ok, you want to focus on all the scams and get-rich-quick schemes. It's more than that you know.
No, the claim is that technical people which do not have a conflict of interest are more likely to share their real understanding.
Of course Solidity developers of the latest rugpull DeFi know very well what they are doing, but they are unlikely to come out in the open and confess it. Some do anonymously though, go read some Coinfessions horror stories.
> do not have a conflict of interest are more likely to share their real understanding.
Understanding of what? The technical side? It seems HN seems hell bent over discussing all the scams and get-rich schemes, and completely discards the cool technology and things that it enables (see https://news.ycombinator.com/item?id=31996612 again, as stated before).
> the latest rugpull DeFi
Yep, exactly as I stated, focus on all the scams. That has absolutely nothing to do with technical expertise you know.
Edit: crypto is a cool technology, and has at least 1 use-case (see link above). Try to argue with that instead of sidetracking the discussion towards the scams and get-rich-quick schemes.
You cannot divorce the technical side from the garbage crypto brings. Yes, crypto has good privacy preserving properties, that unfortunately are equally effective for $5 as they are for $5 billion. The legitimate use case for that is infinitesimal compared to the abuse potential, and even if we accept the whole black-market use of crypto as legitimate, that's still a small fraction of the speculation-driven valuation.
Those who understand the technical features can see there is nothing there to justify the hype, and rightly conclude it's largely a scam on a fundamental level.
> You cannot divorce the technical side from the garbage crypto brings.
> Those who understand the technical features can see there is nothing there to justify the hype,
I'm confused, is it bad tech or is it undesirable effects?
Technical critics flatter themselves too much about their supposed understanding. It's political, not technical. We need crypto for the same reason why need to keep the cash economy alive.
Let me quote again the section relevant to your confusion:
> even if we accept the whole black-market use of crypto as legitimate, that's still a small fraction of the speculation-driven valuation.
So the major problem is the financial overvaluation relative to the real technical abilities, the minor problem is that even those features are predominately enablers of nefarious activities such as money laundry. The second problem is indeed a political objection of mine, but there is no contradiction with the technical lack of value which most HNers object to.
> We need crypto for the same reason why need to keep the cash economy alive.
But that's not the reason the crypto bubble inflated, far from it. We could talk about privacy enabling features inspired by crypto in electronic payment systems without trying to reinvent fiat currencies in the form of private money which we know full well are a bad idea.
Physical cash is to crypto what amateur rocketry is to sending ITAR info to North Korea, or personal handguns to nuclear proliferation: there is a scale where a certain behavior that is acceptable and beneficial at the individual level becomes a major problem for society as a whole.
I think if we were trying to build a payment system for illegal use, what we would end up would look very much like crypto. This in itself should speak volumes.
Of course, for my part I certainly wouldn't be able to independently come up with proof of work chains, the major contribution of Satoshi. Something like Wei b-money with a super-peer network that broadcasts transactions and countersigns those that are legitimate/first. It wouldn't have the strong anti-double-spending features of Bitcoin, but it would work much as current proof of stake coins, as long as the super-peer cabal was not majority-compromised.
I know I could come up with it because I toyed with these concepts in the space of filesharing protocols before 2010, but decided the whole e-cash approach was too heavy. Always wondered what it could have led to if I implemented it back then.
> I am pretty sure that building an anonymous payment system for illegal trades is possible without crypto.
How? And then it turns out this system is owned by the FBI, like the ANOM phone. Oops.
At least with Monero you know it's peer reviewed, and can check what is running on your system.
You see that is the strange part here. There is a cool algorithmic solution, and HN says "Nah, some central authority could do that with software too".
I agree cryptocurrencies need a greater fool to have value. But how then are national currencies different? The same greater fool principle applies: if no greater fool wants the national currency anymore, it ceases to have value.
I think it's similar to the CDOs used in the housing crisis. You take something of little to no value, wrap it up with all sorts of complexity but then present it as this simple thing you can buy and trade that supposedly has value. People lap it up without understanding the underlying value, which is effectively none. Bitcoin takes up energy to be born. Thus, a bitcoin starts life with negative value. It only attains "value" by someone willing to exchange normal currencies for it. Then it increases in value when someone else pays more. But there is no backing value. Yes, fiat currencies no longer have a gold standard, but there is a ton of value backing the fiat currencies. The dollar is backed in value by the U.S. economy. Bitcoin and other cryptocurrencies are entirely ephemeral. I think I saw someone relate them to the Beanie Baby crazy. At least at the end of that craze, you had a Beanie Baby left, as opposed to ones and zeroes on a hard drive with cryptocurrencies.
> There is seemingly also a small fraction of true believers, idealists and evangelists who seem convinced that all of this could replace both states and banks without ending up much worse.
I think a lot of that culture comes from staunch libertarian ideals and also the "free software" crowds, such as GPL enthusiasts. It just is not how human society works and will never work. I saw it in a thread in regarding a commonly used software library that has a GPL license. The author of the package said they would never consider any other license, even while the other thread posters were requesting a license that would allow them to use it in proprietary code but actually pay for that use. People were essentially stating that no one, other than hobbyists, will ever use the package because they can't in their jobs and companies but that they would be willing to pay for a non-GPL license, and the authors staunchly stood behind their ideals. Thus, no one uses it.
I feel cryptocurrencies are very similar. Taking a hardline approach to the decentralization means it will never be incorporated into anything other than hobbyist and enthusiast use.
This is a terrible argument, and clickbait. Obvious enough to anyone who actually understands how bitcoin, or eth work, it does not fit the definition of a ponzi scheme. Most tech stocks fit the definition better. Just because a few centralized banks, (FTX, centralized crypto exchanges are banks) have failed, means nothing, since the original idea of cryptocurrency was to do away with centralized institutions like this.
The burden of proof is on the crypto promoters to demonstrate ability to create wealth. This was not the case up to now, the only thing crypto produced were speculative assets that have very little legitimate uses.
For example, major cryptocurrencies like Bitcoin aim to replace state issued fiat currencies with privately issued currencies that have limited/fixed supply and no connection to the real economy. That's insanely stupid and detrimental. They also aim to preserve privacy when teleporting billions across continents - a dangerous and anti-social feature no society needs.
The vast majority of ICOs and DeFi projects are just a way to do regulatory arbitrage - issue unregulated or lightly regulated securities that are excelent for speculation, but have close to non-existent real world utility. The same for NFTs, completely fictional wealth creation that was powered solely by the speculative search for greater fools.
The field as a whole, despite probably hundreds of billions in real wealth dumped into it by now, produces close to zero value for society, or even negative if we consider the impact of resource burn and facilitation of money laundry. It has spiraled into a pure speculative mania that destroys the lives of many retail investors:
https://twitter.com/coinfessions
> The burden of proof is on the crypto promoters to demonstrate ability to create wealth.
For crypto to be financially successful, strictly speaking it doesn't need to create wealth, it only needs to attract it.
Plenty of profitable businesses are arguably a net negative to society - tobacco, gambling, private prisons, ad agencies, data brokers - but that doesn't make them ponzi schemes.
The tobacco industry produces net wealth: products people are willing to buy and enjoy. You might morally disagree with the premise of that need, addiction, but nonetheless, in our current society tobacco products are intrinsically valuable.
Speculative crypto assets are not intrinsically valuable, they have no desirable properties other than the ability to make you rich in the future by selling them to someone else. If investors would be guaranteed their crypto assets will not appreciate, the vast majority would dump them immediately. (so called stable coins are the exception, but they only make sense as a component of the crypto ecosystem, people need them as enablers of speculation).
You might argue that the need to hope for quick financial success is a basic human need, which crypto fulfills, so it does indeed provide value for its users; but by then it's indistinguishable from classic Ponzi schemes or gambling. It's in fact even more toxic than gambling, since it disguises as a form of wealth creation and legitimate investment, as opposed to a game of poker which every investor can recognize as zero sum.
You could define it as value from something other than recruiting/resale – for example, tobacco has real negatives but it wouldn’t be such a common killer if its buyers didn’t feel it made their lives better, at least at some point. Cryptocurrency as a mechanism for exchange could have that as an alternative to, say, PayPal or Western Union but nobody gets aa excited as we’ve seen over saving a couple points on infrequent transactions.
> This was not the case up to now, the only thing crypto produced were speculative assets that have very little legitimate uses.
You're being straight up dishonest. Darknet Markets have been operating for over a decade now, they obviously have tons of legitimate uses and have created a plenty of wealth.
Proclaiming that your intellectual opponents are ignorant without pointing out where they're wrong is a pretty common response from bitcoin maximalists these days.
A part from the fact the he cited eth, that makes him not Bitcoin maximalist: he’s right.
Also because the arguments are always the same and in this same thread we have one of the most voted comments saying that the idea behind Bitcoin is “stupid”. Just that.
But it’s fine since we’re in HN, isn’t it?
As I said the arguments are always the same, and saying that he’s a maximalist (without any prove) just makes you classic people that won’t change idea.
So why even bothering, man.
Maybe the post was edited? I don't see the clear explanation.
Here's an exercise, I'll replace a bunch of words with their opposites, and present it as my counter argument:
"This is a great argument, and not clickbait. Obvious enough to anyone who actually understands how bitcoin, or eth work, it fits the definition of a ponzi scheme."
Are you convinced? Do you know where you got it wrong?
Cryptocurrency in general is not an investment promising profits, but a tool for payments (or a smart contract platform, whatever).
A Ponzi scheme is a fraud which takes money from investors, pretends to invest it in something profit-generating, but only pays out profits to earlier investors using funds from more recent investors.
Cryptocurrencies like bitcoin, ethereum or monero are nothing like a ponzi scheme. There's zero pretence that it would be a profitable investment. Who would even be paying you these ponzi-dividends?
It's utterly stupid to make me spell this out, presumably anyone making the claim that "The entire crypto ecosystem is a ponzi" should know what those things are.
You're still not convincing me here. But you should be rewarded for making an argument I guess -- your snark aside.
I'll use the wikipedia definition for a ponzi scheme because it's simpler.
> A Ponzi scheme (/ˈpɒnzi/, Italian: [ˈpontsi]) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.
It doesn't say dividends. It just says "pays profits". Those profits in dollars could be realized by the early investors selling their stake. No dividends needed -- though some would say "mining" is a dividend producing activity -- I'm not sure I would though.
Cryptocurrencies generally don't pay profits. Ethereum sort of does if you're staking, but that's out of reach for "normal people".
You always have exactly the same amount of cryptocurrency, with no serious claim made by the authors as to why you should profit by merely owning some.
(Of course, it's a bit silly of me to use "cryptocurrency" as a general term when there certainly are cryptocurrencies which are ponzis. But I'm referring to the "serious" projects like Bitcoin, Ethereum or Monero)
Also, you forgot a crucial bit from the wikipedia page:
> Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are coming from legitimate business activity (e.g., product sales or successful investments), and they remain unaware that other investors are the source of funds.
> leads victims to believe that profits are coming from legitimate business activity
I don't think this is true of any of the big cryptocurrencies.
> and they remain unaware that other investors are the source of funds
I don't believe I did. And he doesn't. The article is pretty clear in it's thesis and argumentation. Saying "you don't understand something" is not an argument.
If you know what a "car" and a "bicycle" are, it's obvious that a bicycle is not a car. It would be silly for anyone to waste their time by explaining you the difference between the two.
Same applies here.
> Saying "you don't understand something" is not an argument
It's a statement of fact.
Edit: I can't reply below due to HN ratelimits, so I will do so here.
>Saying "it's not" is not an argument, particularly when a good argument has just been laid out in front of you.
It's pretty clear that you haven't actually read the article we're discussing, it does not at any point attempt to explain how cryptocurrencies would meet the definition of a Ponzi scheme.
The part which comes closest is this, but you'd be delusional to call it a "good argument"
>There's already substantial evidence that the crypto space is infested with frauds, scams and ponzis. But I would go further. The entire crypto ecosystem is ponzi. The whole thing depends on ever more people parting with their savings and wages to pay the lunatic returns promised by the platforms to people who can provide the liquidity they so desperately need.
Hi, welcome to HN. BTW there are a lot of smart people here who have dug into the mechanics of crypto extensively.
I look forward to a good argument debunking the ponzi scheme thesis. Saying "it's not" is not an argument, particularly when a good argument has just been laid out in front of you.
Edited to add:
> It's pretty clear that you haven't actually read the article we're discussing, it does not at any point attempt to explain how cryptocurrencies would meet the definition of a Ponzi scheme.
Yeah that's not a good argument either. Since I did actually read it -- and it does.
If the idea was to do away with the centralized institutions but overwhelmingly people use centralized institutions which frequently act like ponzi schemes, perhaps the "idea" no longer matters and the actual real-world situations matter more.
An ecosystem is a centralized entity. Sure, Bitcoin is useful when used in a decentralized manner. However, when it becomes consolidated in an exchange or other controlling entity, the risk associated to those values will move out of line with the common consensus. For example, there are whales that move the crypto markets in wide swings to their advantage, and those centralized controls risk everything (increase risk of loss) that has gone into building the technology and applications for using it.
At the end of the day, crypto is likely only useful for one thing and that is an exchange of value and identity for AI/ML applications. Just like Splunk was search for machine data, crypto is payments for machine entities. Until that becomes a reality, the markets are just speculative and uninteresting. Ethereum especially, given no real thing occurs on that chain other than bad code and hacks that lose "investors" millions.
Lightning has been the best thing that has happened to crypto in a long time and the reason why is because it can scale Bitcoin to the numbers we need for large amounts of transactions between machine entities...
> CoinDesk reports: Just over 51%, or 24.6 million addresses of the total 47.9 million, are below purchase price on their investments, according to data provided by blockchain analytics firm IntoTheBlock. About 45% are in the money, which means they are boasting unrealized gains, while the rest are roughly at break-even.
Your dreamt of, decentralized system that was imagined by Satoshi is gone. It will either never exist anymore and be gangrened by said centralized exchanges (which are the only things that are artificially prop up the value of your coins), or it will go back to the days where you can pay 10 000 BTC for a pizza because someone decided it would be fun. ETH would be worthless without exchanges (because its current value is only propped up by "what bullshit can I sell that mimics real world services but without any legal repercussions when I commit fraud and exchange it for cash, disappearing in the Bahamas in the process?"), doge would be worthless, USDT would be worthless, etc.
A system that has no real world value will not exchange anything, unless scammers like Binance and FTX come in to sell get-rich-quick dreams to suckers and artificially bring in money and "volume". When 99% of your volume is just big traders sending money to one another and keeping the price high (because it makes cryptobros feel good when they see their big number go bigger), you don't have an economy, you have at best a really shit game of Monopoly.
I don't get the impression that you two are talking about that same thing, like, you didn't really give a rebuttal to what they said, how do you feel what you wrote is related?
the best I can tell is that you are saying that centralized institutions having extremely large influence is necessary? in which case I would disagree
Having large, centralized institutions is necessary if you want your obscure, no-application-in-the-real-world funny coin to have value. They'll bring in money by suckering in people in believing it has value.
yes we get it, anybody that doesn't say something overwhelming negative about crypto gets one of your hyperbolic negative auto-replies just in case we missed it the first time
some of your points are clear without the pejoratives
to your actual point, I dont think there is anything inherently necessary for exchanges to make price discovery. people do not need to custody their assets there for more than a few minutes, and properly run exchanges (not overleveraged, solvent) do this just fine
OTC desks never custody and are okay examples of this
How convenient that this is obvious enough to only the people who understand how this relatively complex technology works, but not to bystanders. The fact that you think stocks are closer to a ponzi scheme just invalidates the rest of your post even further.
Centralized entities (ie businesses) that are holding people’s funds absolutely should be regulated, and certainly more than the current state. The scammers in this space don’t have any real connection to the tech per se, they’ve just identified a relatively friction-free way to scam people.
“Crypto” itself (the tech) can’t be regulated, short of coordinating all countries to confiscate mining rigs/validators and make them seriously illegal, thus breaking the network.
So regulating the businesses does not invalidate the premise—it just protects people as they onboard funds.
We monitor large cash transactions, and don’t let randos print. We also restrict who can facilitate transmitting it and under what rules. We further made securities fraud, wire fraud and money laundering illegal, a trifecta of crimes most people working in crypto facilitate.
What I notice: We guarantee a monopoly for visa and mastercard, ensure that transactions cost 3-4% for everyone, and make sure that money requires days to move between accounts.
The state of transaction processing in this country is hot garbage. I'm not claiming that crypto is the answer, but I sure as hell don't think our society has arrived at any sort of best solution. I'm personally fine with a lot more "crime" (aka transactions you personally don't approve of) if it gets us a better financial system.
The fact that the stock market has almost forgotten about dividends and bubble mechanics have taken over the tech sector isn't a real counter example. That is also bad.
Because the editors of rags like businessinsider hold considerable amounts of tech stocks in their portfolios, as do their readers. And actual businesses with cash flows are obviously not pure Ponzis and some of them will undoubtably be actually successful. The ones where people are investing in the stock, without any dividends, on the hope of growth, selling to the next highest bidder, hoping that the economy doesn't hit a sharp recession and a crash is very Ponzi-like. Early buyers do well, late buyers lose it all, none of the cash from the business ultimately leaves to the stockholders through dividends.
And I'm just responding to the parent post who defended crypto by claiming tech stocks looked like more of a Ponzi than crypto. If you can see the bubble/ponzi-like behavior in the stock market, that isn't a defense of crypto (if you can't see the similarities in behavior between either of them, then I can't help you at all).
Except crypto actually works for its intended use cases. I use it constantly.
Maybe it works poorly for traders but those of us actually using cryptoassets for privacy, inflation resistance, and censorship resistance ignore the scams and traders. Scams and traders dominate the conversation of most new technology. Same things happen in traditional markets.
Cults of personality and false promises by corporations inflate stock prices all the time. Takes a while to find the real price sometimes.
Inflation resistance is meaningless for a currency that has wild fluctuations, and not just sometimes, but on a daily basis. You have to be joking to say that something that went from basically 0, to 61k, down to 16k and wild swings in between that is "inflation resistant".
Not joking at all. Inflation hits you the most in the long term. If you acquire deflationary but volatile assets like Bitcoin for long term holding, you use dollar cost averaging so the swings become meaningless. Buy a little every month.
I was buying at $10, $1k, $10k, $60k, and everywhere between. I will be buying at 100k too.
Deflationary assets trend to be short term volatile, but long term up.
> those of us actually using cryptoassets for [...] inflation resistance
Heh, gotta say cryptos have weathered their first real test as a hedge against rising global inflation (since early 2021) really well. Meaning, the rising interest rates have almost decimated dollar valuation of cryptos as the tech gold rush imploded.
Please do not mistake this article's author's concern as an attack on the libertarian fundamentals of cryptocurrency. The article is about how crypto has been marketed as an investment to retail consumers, and this space is simply wrought with terrible scams.
I agree capitalism sucks in a lot of ways, but the reduction in global poverty is at least correlatively linked with the spread of capitalism. Not sure what "hells cape" you mean, but it feels like hyperbole.
(Also just to point out, Communism isn't an "alternative" to capitalism, but actually the conclusion to it... on paper) - That is, even if you're right, Capitalism is required to achieve communism... so it seems "hellscape" is the only way.
How many times is "every"? I count maybe a dozen countries, they were either puppet states of the soviet union and didn't have much local control or they were authortarian dystopians both before and after communism.
Maybe the pattern is toltalitarian countries are going to be toltarian regardless of what they call themselves.
As far as crypto goes, there are like a billion different variations on the idea, most are scams, and i dont think i have ever heard anyone say "real crypto hasn't been tried" before this.
It sucked in Russia, Cuba, China (until Deng made it capitalism).
Australia, Sweden, Norway have been much better examples. Though their secret has been to not call it Communism/Socialism but instead something like "liberal democracy" or "democratic socialism".
Agree there is propaganda war that has been waged to ensure communism looks bad... which is why it's potentially a good parallel for crypto, as I think (potentially even literally not just metaphorically) the same vested interests are against it.
Excuse my financial ignorance but.. shouldn't it be immediately illegal to claim "46% risk-free return"? That is impossible. Asking people to give you money to do something that is clearly impossible (make a shitton of money sustainably from.. nothing?) is just fraud. Why can't they just get sued as soon as they put a website up that is inciting people to send them money under false pretenses?
I'm not sure what else you'd expect. Those things are caused by humans taking advantage of whatever system of value transfer exists, of course people will do the best they can to reinvent these things on top of new value systems.
On the other hand, unlike the actual infinite money printer central bank, nobody forces you to use obvious scams like tether. You don't need to use a centralised exchange because smart contracts make it possible to use decentralised exchanges. Smart contracts allow you to do things on a small scale that would have required enormous institutions in the past. The ability for any individual to create their own tokens obviously allows institutions to do it too.
Since cryptocurrencies are more powerful than previous systems, it shouldn't be surprising that they support a superset of the scams that previously ran.
They also support an unprecedented level of programmability, default to open api access, a new spectrum of choices for trust, the ability to run transactions across financial products from different providers, faster settlement, are based on actually modern methods of cryptography (unlike bank accounts), and have injected a massive amount of energy into some extremely interesting zero knowledge cryptography.
It's actually pretty surprising to me that the majority of 'hackers' on 'hackernews' don't seem more excited about the ability to create programmable tokens of their own.
> Those things are caused by humans taking advantage of whatever system of value transfer exists, of course people will do the best they can to reinvent these things on top of new value systems.
It would be nice if at least one person would leapfrog all this 1850s US Frontier West banking history, which was dominated by frauds and theft, and offer us a system working under modern reforms: Glass–Steagall Act, Sarbanes–Oxley, similar rules-that-make-it-work from Europe. Best practices.
To use the same approach that the modern financial system uses, we'll need legal systems to catch up, I presume that that will happen, even if a lot of the community don't really want it to. Some of it can be addressed in new ways of course, but there are some aspects that fundamentally need a working legal system to implement.
I am not a large BTC holder (haha), but I would be happy that it collapses (if it is really not backed) and Bitcoin can move forward. I am really happy that Celsius, FTX, Luna etc are cleaned up and hope people will take a lesson and stick with basics.
That remains to be seen (for example I'm crossing fingers Brian Armstrong, the CEO of Coinbase, which is an HN unicorn, ain't at the head of a ponzi) but meanwhile something is certain: SBF was running a Ponzi (guaranteeing insane returns using previous investors and people's money: yup, that's a plain ponzi).
And he was lying in nearly every single of his tweet, up to a few days before the downfall when he was tweeting that everything was fine. Or when he was saying the money was FDIC insured. Deleted the tweets? Too bad, people have copies of that.
To me it seems like quite some people are pushing this "every crypto is a ponzi" now that their poster ponzi boy got caught with the hand in the cookie jar.
But I'm not sure they'll succeed.
I think there could be a future where, just as energy and commodities are still a thing after the Enron ponzi, Bitcoin may still exist after FTX/Alameda ponzi.
> For stable funding, what you really need is retail deposits
I would disagree. For stable funding what you need is the belief that the underlying currency will continue to have value. The fact that BTC hasn't gone to zero means there are some people who still believe it has value.
As a lay person who hasn't followed cryptocurrencies since Bitcoin was invented, could someone help correct my understanding of how modern ones work?
It seems like owning a crypto token in a blockchain is conceptually the same as owning a share in a company. You purchase or mine a voting stake in that blockchain, correct? And the process by which new tokens can be minted is laid out ahead of time, like a gradual continuous stock split.
Are there fundamental differences that I'm missing, or has the genius of crypto been to put enough window dressing around the idea to avoid being regulated as a stock market or traditional corporate entity?
There is, at least, some demand for crypto that relates to real-world economics.
It's an excellent intermediary currency. People use it successfully in hyper-inflationary countries and people use it to bypass currency transfer difficulties. These are definite and real use-cases.
The rest of the demand looks like pure and simple speculation based on faith that the other various claimed uses will come good, i.e. a ponzi.
It's not a complete ponzi, but I'd say about 80% of it is.
>...crypto are every bit as dependent on a constant supply of greater fools.
But it isn't really. The crypto market goes in approx four year cycles and the number of greater fools goes up and down but things like bitcoin don't cease to exist, they just go up and down in price.
The dream is over. How we came from Satoshi to here is just one more example of how our civilization is weird. In one hand we create great technologies and at the same time, we have already people working to complete destroy it.
short answer not.
banks in fractional reserves make money for the commission of lending,if your account get more interest this year this means they also lend to more interest.
yes isn't 100 but chase bank and citi bank is here for 200 YEARS.
short answer no it isn't, i don't like the banking system but that doesn't mean is pyramid scheme.
does crypto is inescapable pyramid scheme, no. even when the landscape is full of scam it doesn't mean that stripe or bitwage or usdt who pay you in crypto to easy international transfer process, they make small cut in the transaction like any other transfers company, for the contrast the number of companies whose only proposition ins the pump and dump the value of their virtual games from shinucrypto to literal ponzi scheme like bitconect.
i wish you understand what i say, i will clarify what i say if you need, English inst my first langues
> This is of course far too good to be true. But no doubt some suckers will believe it and hand over their dollar stablecoins. And that is exactly what the platform wants.
I noticed that. What do you think the reason is for that? Protecting YC-invested crypto companies? It’s very unfortunate because it was a well written recap of recent events.
> We tend to call it the 'overheated discussion detector' these days, since it detects more than flamewars. However, that phrase is more awkward to say than 'flamewar detector'. If anyone can come up with a better name I'd love to hear it.
> Turning that software off is not an option, because HN would be overwhelmingly more dominated by flamewars if we did so. It's not primarily the individual threads that I fear, it's the systemic effects of having them be more dominant. HN exists most of all for the quieter, deeper, more out-of-the-way finds that would be the first to get excluded under such a regime. That would really be an existential risk to HN.
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This post got too much attention, too quickly, with too many votes and comments. Just look at all of the flagged, dead, green name, comments that have gotten significant downvotes too.
The moderation work needed to maintain the site if this isn't down ranked is in excess of the amount of value that the post brings to the site.
This is one of those distraction comments that really adds nothing to the discussion. The article has real points about how crypto is deeply seeded with ponzi schemes all over and the entire currency in fact looks like a ponzi scheme, and the response is just "yeah but sometimes other things are kinda ponzi schemes".
Yes, the stock/bond markets resemble ponzi schemes particularly for certain securities (cough Uber cough), but the existence of other things being sorta ponzi schemes doesn't remove or forgive all the evidence of deep-seeded ponzi schemes throughout the crypto ecosystem.
I don’t think that is true at all. There is economic value in a piece of equity in google. The price someone is willing to pay for it changes frequently.
Crypto is closer to art than anything else. I get less value from a rothko than someone else may
You are right about the general case (not everything is a ponzi) but you’re wrong about the example.
If you make money out of a piece of equity in Google, then somebody made that money but didn’t get it, either by buying the same amount of equity for more money then you, or by creating value through working at google but not getting that value paid in salary. This sounds like a ponzi with investors at the top of the pyramid and workers at the bottom.
A better example of something that isn’t a ponzi are taxes (or any common funds), you pay into a common fund that then is used to provide services and infrastructure that anyone can use for fun and profit. Another example is a traditional savings account. The bank (actually a credit union is an even more pristine example) holds on to your money while you are not using it, and lends it to people that need it, they will give you a small interest as compensation (part of the profit of that money) but also spend some of it to buy insurance so that you will never be at risk of actually loosing that money.
> There is economic value in a piece of equity in google.
It doesn't entitle you to profits, it doesn't entitle you to assets (except in bankruptcy), you can't eat it, and it's only worth what other people will pay you for it. Unlike a rothko, I can't hang it in my living room. Where's the value?
If Google stock were really worthless, someone could buy all of it for pennies and do whatever they want with the company. Owning and controlling a company with $80B yearly profits isn’t worth anything to you?
A single Google share isn’t really worth anything on its own. But its value is tied to the collective value of _all_ Google shares, which _are_ worth something.
> If Google stock were really worthless, someone could buy all of it for pennies
Nobody is disputing that it has market value. My argument is that it has much less intrinsic value than some people would like to believe.
> A single Google share isn’t really worth anything on its own. But its value is tied to the collective value of _all_ Google shares, which _are_ worth something.
Not really, unless there's some non-zero chance that Alphabet will be bought out. By my understanding, that chance is pretty close to zero. Am I wrong?
The classic finance answer--which is indeed perhaps zero in the case of Alphabet--is that the value of a stock is the net present value of its dividend payouts. Buybacks complicate that simple formula as do a lot of other things but, in theory, a share of stock does entitle you to a share of the profits of a company.
The value is partly in Google, the corporation. Google is effectively a bundle of legal contracts, shared knowledge and habits that together tend to spit out money.
The rest of the value is in society. Laws, practices and habits mean that sliver of ownership tends to rise if Google works well, fall if not.
If you prefer to store your savings in whatevercoins, I hope you enjoy whatever you end up with on the other side. But please don't get back to me about it, I am utterly fucking sick of hearing crypto pitches.
Just because I can't walk into Google headquarters and demand a dividend doesn't mean that I don't still own some portion of those profits. Yes, finance is complicated, but there's no corporate board on this planet that would accept indefinite stockpiling of cash, which is why buybacks happen, including for Google!
> Just because I can't walk into Google headquarters and demand a dividend doesn't mean that I don't still own some portion of those profits.
"Own" in what sense? You can't request them, you can't even vote for them to be spent in a certain way, and there's no guarantee that they'll be paid to you.
Someone once said this about NFTs but it also applies to the idea of Google stock as "ownership of profits" - it's like having a wife that you never seem to have time with, but you don't have to worry because you have the paperwork which says you are married to her.
> there's no corporate board on this planet that would accept indefinite stockpiling of cash, which is why buybacks happen, including for Google!
The board is appointed by voters. Those voters are Sergey and Larry. Sergey and Larry determine whether buybacks happen.
Board members have a fiduciary responsibility -- there is legal recourse here by minority shareholders even if that's not "realistic" for your average shareholder.
dude, everything crashed, stocks and even bonds. UK just bailed out pension funds. This proves that Bitcoin has became an asset class and it is very early.
There is economic value in inflation resistance, censorship resistance, and privacy. The fact most get-rich-traders do not care about these things and -also- speculate is irrelevant to the fundamental value.
Tell me how many BTC a new TV is going to be in two years, I'll tell you how many USD it'll be. As a stable, inflation-resistant currency, the BTC value should be easy to predict
The simple moving average for 1BTC should be around $50,000, so a $500 TV will be about 0.01BTC.
Hype or fear may drive the price higher or lower than that, but if you regularly buy and spend bitcoin then the swings average out back to the simple moving average over time, which reliably increases against USD.
I get paid a fixed USD amount of Bitcoin every month regardless of price so my exposure to it similarly averages out.
> fixed total amount of Bitcoin that will ever exist
It has a fixed supply. (Currently. An unknown number of miners could always increase it.)
> Bitcoin is not inflationary
Of course it is. One Bitcoin buys 75% fewer goods and services than it did a year ago. Taking advantage of people who mistake money supply for inflation is one of crypto’s scams.
When one says bitcoin is not inflationary, they mean that the supply does not inflate. You are accurate that bitcoin's purchasing power can wane aka deflate. In my opinion and many others it is moot because everything deflates. As far as we know, there is not a single thing in existence that is void of inflation by your usage of the term. Therefore, we move beyond that version of the definition to the practical and useful definition which is that it cannot be added to numerically.
English is my first language and those sentences are crap, but I think you get what I mean.
> When one says bitcoin is not inflationary, they mean that the supply does not inflate
This is wrong. Not matter of opinion wrong, factually wrong.
> bitcoin's purchasing power can wane aka deflate
This is also wrong. Waning purchasing power is the definition of inflation. Bitcoin was marketed as an inflation hedge. It hyperinflated. Solving that by redefining inflation is dishonest.
> the practical and useful definition which is that it cannot be added to numerically
This is the opposite. It’s taking the practical definition, which relates to purchasing power, and replacing it with a technical curiosity. Which is also, again, wrong: a small group of miners can amend the protocol to keep the gravy train running.
You mean a large group of miners, right? And please don't negate what someone says with just "that's wrong". How is that helpful? I clearly said the literal definition of inflation is not useful because every single thing in existence is inflationary meaning bitcoin is as inflationary as every other thing. We use the term in regards to money as meaning the supply doesn't increase and I believe you are fully aware of that.
This. Today's stock market bears little relation to "a thing where you can buy shares of a company, and if it does well you can get paid by selling it."
That's what it says in the textbook, but you are woefully misinformed if you believe that this strongly matches reality, especially for individuals and smaller players in this thing.
and yet every time it is actually prosecuted in court (not settled or plea dealed) the distinction blurs because the difference between something legal and illegal can’t be found
> This. Today's stock market bears little relation to "a thing where you can buy shares of a company, and if it does well you can get paid by selling it."
So speculation? Seems like that is the primary way it works today. Also, dividends represent a major source of market returns. Some searching suggests as much as 30%.
at the end of the day it all comes from the same place, web3 just democratizes the path
there are a small amout of scams that are overblown by people trying to control the narrative which won't work because the blockchains are decenteralized and free for all to investigate
> it all comes from the same place, web3 just democratizes the path
To scamming people. Early guys will be fine. But I’d say the odds are good that any gains from here out will be subject to clawback in most competent jurisdictions.
A small number by which metric? Is FTX collapse small? Was Bitconnect small?
> the blockchains are decenteralized and free for all to investigate
What does this have to do with anything? How can you prevent a scam by looking at the decentralized blockchain? At a maximum you can try to read contract source code, but even then only a tiny number of experts would be able to catch potential issues.
Now there are all manner of divergences from the above paragraph. Coins that are totally controlled and issued by a small group or company. Black box rules rather than transparent.
There are also huge trade offs with not having a central entity - lose your private key and lose your money for example.
Does this make the entire industry a Ponzi? No. There are legitimate uses for crypto, and even if I listed a whole bunch here the HN skeptics would disagree, but certainly buying drugs online is a real use case, which crypto excels at. You may say that’s morally wrong but it is still a use case, for better or worse.