Comment by asjdflakjsdf | Hacker News Reader

Comment by asjdflakjsdf | Hacker News Reader

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Ethereum is quite exciting in that regard, but my feeling is that most eth enthusiasts don't actually care about that. They only care about the value and thus it has become another crypto pyramid scheme for now.

The only crypto community who has shown any genuine effort in creating a "currency" is Dogecoin. And that is mainly because they are more aware that their coin has no value without real adoption. But sadly, even that has been infested with the pyramid scheme HODLers after the recent surge in value.

Another problem with Eth is that regular folk are thrown off when they hear things like "smart contracts", "NFT" etc.. So, in terms of a realistic crypto "currency" having widespread adoption, it seems hard to justify any of them at the moment.

I love using crypto for payments as it can be incredibly simple when done right. I really hope to see a crypto that works toward distributing wealth and opportunity though rather than the toxic crypto culture of HODlers we see today!

How do you define a pyramid scheme? Thing go up in value?

I'd basically see it as an investment opportunity that greatly favours early adopters.

70% of ethereum was sold at rock bottom prices to "early adopters" in a presale.

You are right. It is a ponzi.

It must also be unsustainable without new entrants.

Most of the early investors (very early, startup phase) of Amazon and Apple got shares in the company at rock bottom prices. Does that make them a ponzi scheme?

I hope you then also count stocks, land ownership etc. as such.

to a degree but not so much. Land has real value. Stocks are different again. The idea that eth is considered more of a stock than a currency is the root of its problems imo. I have a real itch to one day see a crypto being widely adapted as an actual currency. I think dogecoin is the only one in our current crypto eco-system that has even a fraction of a chance in filling that space. I'm sure it will happen some day, but maybe not with our current crop of cryptos.

Yea, ETH is more like a stock of the biggest crypto lab, its kind of the Apple of crypto (in the way it transferred innovation happening in a field under into its own garden). I think we will see a currency widely adopted, and its going to be BTC or BTC-based (fractional banking but with crypto).

> I have a real itch to one day see a crypto being widely adapted as an actual currency.

Monero is closest to achieving the original cryptocurrency dream. Private and anonymous transactions, good speeds, low fees, ASIC and GPU resistance, committed developers that are actually improving the coin over time, open source wallets even on mobile.

> I think dogecoin is the only one in our current crypto eco-system that has even a fraction of a chance in filling that space.

Why do you say that?

Which investment opportunities don't favor early adopters?

By this defintion any investment is a pyramid scheme. Even savings accounts give the greatest return to those who start early.

A Ponzi is when the returns of early investors are "sustained" by the flux of new investors.

A cashflow producing venture is not a Ponzi since that cashflow is supposed to ensure the returns of all investors.

The problem with this definition is that it’s normal and legitimate for later investors to buy out early investors. You need to know more about what’s really going on to tell whether it’s a fraud or not.

Recommended reading: Lying for Money: How Legendary Frauds Reveal the Workings of Our World

There is no doubt that it's a pyramid scheme.

Everything is a pyramid scheme these days including the entire stock market (especially big tech).

But the modern monetary system is designed to sustain such pyramid schemes. It can keep them going forever. No matter how much net value they destroy; it will offload the costs to fiat salary earners who accept fiat currencies.

TBH I'm confused how the world economy is able to keep running at all with all these extreme inefficiencies everywhere.

Sooner or later it will have to end.

https://en.wikipedia.org/wiki/Minsky_moment

I don't think so because the entire stock market would collapse if the reserve banks stopped printing money.

Smart people look at Bitcoin and Ethereum and think "wow that's inefficient, if the banks raise interest rates, they're going to get wiped out" but they don't realize that most corporations are just as capital inefficient and are in the same position. They are both unprofitable, therefore both worthless... Does it matter that one may be slightly less worthless than the other? The intrinsic market cap (if we had a free market) would be less than 0 in both cases.

Not sure why this is being downvoted.

Before the pandemic, the Fed tried to wipe out the crypto space by raising interest rates... Then when they realized that their policies were threatening to take out the entire stock market instead, they decided to suddenly drop interest rates back to 0.

It seems like the Fed was trying to find a sweet spot of interest rates which would wipe out all speculative investments but would allow non-speculative investments to stay afloat... They simply didn't anticipate that stocks might be more speculative than crypto.

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