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Comment by justinator | Hacker News Reader

I was under the impression that crypto currency was thought of as nothing but yet another pyramid scheme.

Please don't HN take threads on generic-indignant tangents. This one has been repeated so often, we definitely don't need it again, regardless of which side anyone's one.

https://news.ycombinator.com/newsguidelines.html

We detached this subthread from https://news.ycombinator.com/item?id=29845594.

> Please don't HN take threads on generic-indignant tangents

It's an idea and topic that's directly referenced in the actual article. I'm having trouble thinking Moxie was referring to anything but cryptocurrency as pyramid scheme theory or why would they use such language?

I mean, yeah, nobody that buys cryptocurrencies expects to buy goods with it, only to sell it to someone else for more money down the road.

A decade ago there was at least Silk Road and similar, offering something tangible in exchange for cryptocurrencies, now the best you can get is a half-assed El Salvador experiment with too many issues to list (but to give two examples, imagine not being able to pay for stuff because AWS's US-East-1 went down, or waking up as a "millionaire" because the app had an integer overflow).

not sure if this is what you're talking about, but there are plenty of darknet markets that use cryptocurrency in very wide use

By definition something with a finite supply cannot be a pyramid scheme, in fact in most cases there are no parallels whatsoever to crypto and pyramid schemes. There are some pyramid schemes within the shitcoin scam and yield farmer communities, but to think that's represents the industry is highly ignorant.

So you're saying the SEC is, "highly ignorant"?

https://www.sec.gov/files/ia_virtualcurrencies.pdf

Ya, do you really think otherwise?

Did you even read what you linked?

The SEC are saying that some operators of proper Ponzi schemes are taking crypto as investment and using crypto hype to justify their insane profits.

Not that crypto in general is a Pyramid or Ponzi scheme.

By your definition, the original Ponzi scheme isn't a pyramid scheme. https://en.wikipedia.org/wiki/Ponzi_scheme

That scheme was based on arbitrage of international reply coupons, of which there were a finite number in circulation.

Poorly worded on my part, I meant > as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own.

As mentioned this happens a lot with shitcoins and yield farmers, its rather easy to setup, but is not indicative of the industry, and the main source to blame for this misconception is the media, because you certainly cannot justify it if you understood the technology.

It just sounds like Bitcoin to me. The proponents tell me how much it's worth and you're stupid to not want to invest. A few get rich and the rest are left poorer than what they started with. Moxie used the phrase, "gold rush" in this essay, and it's fitting for cryptocurrency itself as far as I can tell.

I'm poor, (but not stupid, thank you!), but I've only seen crypto being used as payment for prostitution. Which, hey if that works, good on 'em, I support the idea of safe, legal sex work.

> Poorly worded on my part, I meant > as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own.

Isn't this just saying "something can't be a pyramid scheme unless it has already collapsed"?

Whereas the argument being made is that looking like a pyramid scheme is something that tells you something about the future likelihood of collapse.

(I think there's also an interesting dynamic that's not explored much here about "finite supply" - unless/until every coin except for one or a small handful collapse, it seems like "crypto" as a whole is subject to inflationary pressure from new coins. Would BTC be worth more in USD terms if ETH didn't exist?)

Are you claiming that nothing is a pyramid scheme until it crashes?

I think if you're invested in a pyramid scheme, it's not easy to admit such.

I have to relate this to the whole Allison Mack/NXIVM pyramid scheme.

Funny that we still don't know who the mythical "Satoshi Nakamoto" is. Seems pretty cultish to me, but believe what you wanna believe. To me that's a pretty big red flag. But I'm super into people calling me stupid so have at it.

Wow that's might be an record for worst analogy ever. A cult needs a figurehead and leader which is the exact opposite of this technology is trying to accomplish, here a suggestion, don't use the word "believe", it's technology, go read the white paper and the science behind it.

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