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Comment by boomer_joe | Hacker News Reader

>Non-collateralized stablecoins

read: "ponzi scheme". This is pretty funny.

You used to have to build your Ponzi scheme, now it builds itself and is fully automated. Such advances. Much technology. Wow.

We truly are witnessing the next-generation of Ponzi schemes.

Is that related to IRON somehow?

PlusToken was certainly a Ponzi, I don't see anything in this article that suggests IRON is/was one.

Tether is also non-collateralised, they just pretend the money is in ‘corporate paper’. All of these stable coins are a fraud.

FRAX has so far pretty successfully pulled off a partially collateralized stablecoin

A Ponzi scheme requires a central actor like Charles Ponzi, you're quoting a description of a "purely algorithmic stablecoin" which implies no central actor to channel new investors' money to old, no central actor to defraud the new investors and by telling them they've gained money when they haven't.

I guess they are comparable in the way that they both require a inflow of capital, is that what you're saying? That would make them similar to pyramid schemes and startups too. "Ponzi scheme" is more specific than "scheme."

A ponzi scheme largely refers to a scheme where you invest capital to get access to the future inflow of capital, where that future inflow of capital comes from other investors who are hoping to access future inflows of capital, etc.

The difference between this and a startup is obvious- a startup intends to become financially independent at some point

It certainly doesn't largely refer to that. It requires a central actor to defraud new investors, promise investors returns that haven't actually been realized, channel their money to pay off the old ones. If you read up on why it's named a Ponzi scheme you can understand how they work.

> It requires a central actor

I see exactly zero existing definitions of ”ponzi scheme” that mentions any "central actor" so you seem to be creating an entirely new definition purely to avoid the "ponzi scheme" label.

Then you didn't look at wikipedia which mentions "the con artist" and "the operator of the scheme" several times.

If you're having to google the definition of the term maybe there's still a little more you need to learn about it.

I don't see either of those as at all synonymous with "central actor".

I would consider all the founders and early investors who knowingly promote the ponzi scheme as con artists.

I google the definition to charitably give your argument the benefit of the doubt. I don't see how you think phrases like the following make for effective communication or a strong argument:

> If you're having to google the definition of the term maybe there's still a little more you need to learn about it.

Why isn't "the operator of the scheme" synonymous with "the central actor?"

Either:

    1. I'm trying to dodge the label "Ponzi scheme" for a reason you haven't provided (maybe you think I have millions invested in this shitcoin?)
    2. This isn't a Ponzi scheme, and you don't know what a Ponzi scheme is

Which explanation is simpler?

> Why isn't "the operator of the scheme" synonymous with "the central actor?"

There can be multiple operators.

I see zero good reasons why decentralized schemes can't be ponzi schemes.

Your argument is akin to claiming that a three legged dog is not a dog because dogs have four legs.

I wouldn't be so uncharitable as to presume to know why you have chosen to make this argument.

I think your argument would be clearer if you took a step back and explained why you think that "central actor" is such a critical part of the meaning of "ponzi scheme" rather than a incidental feature common to ponzi schemes.

So why isn't "the operator of the scheme" synonymous with "the central actor?"

>I see zero good reasons why decentralized schemes can't be ponzi schemes.

Do you know who Charles Ponzi was or why Ponzi schemes are named after him?

Do you know what he did or what Bernie Madoff did? They operated the Ponzi scheme. That's why they were a critical part.

This money really was going into the smart contract, wasn't directly given to old investors, wasn't being siphoned directly into the operator's pocket, all unlike a Ponzi.

You don't know what a Ponzi is and you're trying to save face, I get it.

> $272 million worth of USDC is still locked up in in the contract. Why hasn’t everyone recovered their 74 cents?

Why didn't the masterminds behind this scheme walk away with that cash? Because it was a mistake. Not a genius scheme being run in the shadows.

You should work harder on understanding what other people are saying. I've tried to give you the benefit of the doubt several times but your tone keeps getting worse.

> Why didn't the masterminds behind this scheme walk away with that cash? Because it was a mistake. Not a genius scheme being run in the shadows.

Please fet your basic facts right. Nobody in this thread is accusing IRON of being a ponzi scheme. IRON was a partially collaterized stablecoin. The quote about how non-collateralized stable coins require constant growth is from the founders of IRON explaining why they made IRON collaterized.

> So why isn't "the operator of the scheme" synonymous with "the central actor?"

Already explained in my last comment.

> You don't know what a Ponzi is and you're trying to save face, I get it

If you really thought you had an argument, you wouldn't feel the need to descend to this level.

Technically it has to be run from the Ponzi region of France.

He was Italian, C− for effort

I think we're splitting hairs with the definition, it's not a ponzi but it acts like a ponzi. It's a weird distinction I suppose, I personally have no qualms calling it a ponzi scheme because new money is needed to pay old money.

A Ponzi scheme without anyone running it isn't a Ponzi scheme.

> new money is needed to pay old money

WOW that's a broad definition. Turns out my 401k is a Ponzi!

Do you know the difference between, say, a pyramid scheme and a Ponzi scheme? Or is "new money is needed to pay old money" the most nuanced understanding you have?

> A Ponzi scheme without anyone running it isn't a Ponzi scheme.

Citation please.

> Do you know the difference between, say, a pyramid scheme and a Ponzi scheme?

A pyramid scheme can make money for all participants but makes much more money for people high on the pyramid. Rising up the pyramid depends more on recruiting skill than time of entry.

A ponzi scheme doesn't actually make any money but merely redistrubtes money from later investors to earlier investors.

Your pension, if you have one is a ponzi. Your 401k is your money subject to special tax rules.

It's pretty common, in the US context, to call Social Security a "Ponzi scheme".

The label is also controversial, but it should be an undisputed fact that people call it that, and it's obviously not particularly similar to Madoff's scheme.

Similarly, it's not hard to find people calling (particularly public) pension funds Ponzi schemes.

Forget "central actors" or whatever.

A ponzi scheme is a description of a certain type of fraud. We can reduce it to it being the fraud of claiming new capital as investor dividends. It's a little more complex, but at its heart, that's what you got to do.

If there is no lie about the source of the money, it's not technically not a ponzi scheme.

If that's your definition, fine, but lots of people use it in a looser sense and have forever.

Nobody wins in an argument over which definition of a word or phrase is correct.

Whatever happened to the debates over whether something was ironic?

That argument can be used in a lot of contexts where people wouldn't. Regardless/irregardless, literally, gif, decimate, etc.

And I'm not saying don't say it's like one, I'm just saying it's technically not one.

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