Just got very lightly flamed by another user for making fun of crypto and was told that Lemmy and crypto have “the exact same advantages and disadvantages”. Now I disagree heavily there, since even if it shares some principles I’d argue that the scale of the problems change when you’re talking about a global finance system versus a social media platform filled with beans. But it did get me curious- how many of you are crypto supporters?
God, I hope not. Crypto is an interesting technology that’s been used to promote what’s essentially a scam. Just ask yourself this: Are the people into crypto using it to buy things? Or are they going to sell it for dollars at a high value and then walk away?
Most are the latter. Very few people even bother setting up software wallets. They just keep their crypto on markets and try to sell high.
That means that for most people, it’s not a currency at all, it’s an investment. But a normal investment is backed by something of value, while crypto is just backed by pure speculation - that is, it’s backed by all the other people who are trying to sell high, too. The name for a system where you get people to buy valueless assets and drive up their price so you can sell yours and leave others holding the bag is: “Ponzi scheme.”
The name for a system where you get people to buy valueless assets and drive up their price so you can sell yours and leave others holding the bag is: “Ponzi scheme.”
No, that’s a Greater Fool scheme. A Ponzi is more centralized and the people who get paid out are not supposed to be aware that the money is coming from new investors. Ponzi schemes hide that aspect of it. In a Greater Fool you are betting on someone being dumber than yourself enough to buy your worthless investment at a higher price.
A lot of crypto is Greater Fool, but there have been crypto Ponzi schemes.
As a side note, there is a cultural tendency to call all scams Ponzis when they are not. It is a specific type of scam.
