> But a crypto project is not a traditional scalable company
Why is that true? There are DeFi crypto projects that are scalable companies with big revenue streams. Sure, the space is driven by speculation, but you can argue the same about Robinhood.
These venues can be distinguished from a Ponzi scheme because the participants are traders in a market, not investors in a company or managed financial product.
But retail traders can use the markets to make bets on overall economic growth. Buying a stake in hundreds or thousands of public companies is a clear bet, and you actually do own something in a legal sense.
With crypto trading, it's unclear what your bet is -- other than the continuation of the Ponzi scheme. You don't own anything, and the coin has no value as soon as people stop believing in it.
If retail investors understood that nature of crypto, I'd be fine with them gambling on it. But most of them are tricked into believing there is underlying value in the coin when there actually isn't (see also: NFTs).
The state (us government) has made it clear that there is no distinction it can stand behind anymore
sometimes earlier investors get paid out by newer investors
whether it’s a high yield investment program, a poorly run hedge fund, or the entire corporate bond market, or social security, or herbalife, or defi
The debate over the name of the payout system is no longer productive, as ponzi scheme - as a pejorative term - doesn’t tell you anything
"Fraud" works for me.
All nascent markets are wildcat melees. https://en.wikipedia.org/wiki/Wildcatter
Useful markets are eventually regulated. To save the market from itself, to calm down the townsfolk brandishing pitchforks and torches, to assert central control over a proven grift.
Time will tell if all these crypto kittens prove useful for more than fraud.
Your proposal of using it would at best case simply dilute that word until it was no longer useful, and worst case open its users up to libel due to being a legal term
In practice, nobody's doing this (even those game devs who are minting assets as NFTs are keeping the assets to one game, making the whole exercise pointless) and it seems probable that nobody really wants it.
But the point being I do believe theoretically there are "legitimate" applications where the decentralization of assets is useful. I just have yet to see an example in the wild (or even to imagine a concrete thing I could make where this would really be the case).
And they already do that. The third party is states backing traditional banking systems.
There is value - with a trusted third party, you are "trusting" that the third party will stick around, won't block you, and won't arbitrarily change the rules on you.
Worse, if your game currency is a decentraliced ledger, then it's much harder to do something about the rogue participant. That's by design. If it's instead a central entity, they can kick out that party on a whim.
[edit] Just try and leverage some NBA Top Shots on your own website and let me know how that goes.
> But the point being I do believe theoretically there are "legitimate" applications where the decentralization of assets is useful.
It's been 14 years, it's not still early, there's just no "there" there.
Although I agree with everything else you wrote, I don't think this follows.
As a counterexample, Secure Scuttlebutt was created for a specific problem, which was that the creator was a sailor and wanted an offline-friendly social media platform. By using a blockchain, users would have a copy of the database locally that they could interact with and then synchronize when they either cross paths with other sailors (because as long as there's a local network, they can synchronize with peers without the need for internet access) or reconnect to the internet. In this case, the blockchain is relevant in that it enables the network to work independently of internet access and provides decentralized eventual consistency guarantees. A centralized solution would unavoidably require internet access.
It's not a million-dollar idea, and further development is fragmented due to there deliberately being no centralized leadership of the project, but it seems to fit its intended niche use case.
With crypto/VC/normal stocks all having many characteristics in common with Ponzi schemes, at least the game is relatively well understood. For all of them, there are institutional investors capable of market manipulation, as well as the information and know-how so as to typically adjust their positions so that the majority of the people left holding the bag are retail investors.