“The biggest Ponzi of all time”: why Ben McKenzie became a crypto critic | Hacker News Reader

“The biggest Ponzi of all time”: why Ben McKenzie became a crypto critic

newstatesman.com

17 pointspseudolus30 comments

> Bitcoin and crypto is only marketing. It’s only a story

It's interesting when people make such blanket statements because then all you need is one counterexample to prove them wrong. When I was a teeneager in a third world country with a pegged and tightly controlled currency, Bitcoin was the only way I could pay for books and servers online. It was thanks to Bitcoin that I truly felt connected to the rest of the world. To me Bitcoin was a currency and nothing can take that away from me.

Whether or not that still holds today is arguable but to claim something is outright useless just because you haven't found a valid use for it is narrow-minded.

In USA many cannabis business settle deals with BTC (and others) so, I think it's still functioning as a currency.

They have little or no choice, because the federal governments lack of pace changing the status of THC means financial institutions are reluctant to service the msrket. They pay higher marginal rates of exchange in effect, and are at risk of sudden valuation fluctuations.

Seriously, do you think the storefronts would do this, if they could stick to fiat?

You've described a valid use case for cryptocurrency, but you haven't described a valid reason people should invest in it.

Useful currencies are inflationary and good investments are deflationary.

Inflation is an exploit used to grant more money to the bank admins any time they feel like it. A correctly functioning trading economy has zero net inflation.

You say the currency was tightly controlled? So, presumably, the fact that it was hard to obtain foreign exchange or pay for things abroad was a deliberate choice by your government, and not a technical problem?

The use case of crypto is the circumvention of regulation. Your story seems to confirm it.

Calling it circumvention presupposes that the government is the defacto controller of currency. The position is already heavily biased.

The standard means of currency was historically just rare materials with natural scarcity. I could easily say that government backed currencies are themselves a “circumvention” of trading scarce elements.

This is the guy that lost several hundred thousand dollars trying to time the market shorting crypto (as an enthusiast, I think you have to be crazy to use perpetual futures for anything except hedging strategies). Since then he has pivoted from being a journeyman actor to joining the anti-crypto speaking circuit. There are a lot of people in government that despise crypto, and these people get elevated at committee hearings, NYT articles, etc.

Also, I did not know this was a thing:

> a 24-part online course on cryptocurrencies, taught by the current US Securities and Exchange Commission chair Gary Gensler

As much as I love the SEC, they're going to be ever slightly biased against crypto currencies...

So, you're saying that understanding cryptocurrencies well enough to be able to teach a course about it (at MIT, no less) will bias one against it?

Sounds reasonable to me.

I was not saying that.

Step 1: Lose a lot of money in crypto.

Step 2: Try to make a career out of hating crypto.

Step 1: Lose a lot of money in crypto.

Step 2: Understand that it's a ponzi scheme.

Which is true? What a most vexing conundrum!

¿Pourquoi pas les deux?

Step 1: Lose a lot of money in crypto.

Step 2: ¿

Step 3: Understand that it's a ponzi scheme & try to use what you've learned to recoup some of the loss.

Also, I've taken the liberty of adding the inexplicably missing crucial "step 2" in the comments from both of you. You're welcome.

https://archive.md/TlTbU

Seeing people still argue about the legitimacy of the crypto space, after FTX, after so many hacks and rug pulls gives me more hope for the future of this space than anything else.

Actual developments in the space are quite technically dense, so I don't expect to see those discussed in HN.

> Actual developments in the space are quite technically dense, so I don't expect to see those discussed in HN.

You seem to suggest that the technology behind cryptocurrencies is too difficult for HN people to understand. While that might be true, it is still not an argument in favor of cryptocurrencies. That something is more complex does not automatically imply that it is more valuable.

One example is traditional alchemy. Sometimes extremely smart people find an outlet for the intelligence and end up building enormous intellectual edifices for the sake of building them, irrespective of actual practical value. Cryptocurrencies are like a giant puzzle game where players solve problems designed by their own community.

I'm not suggesting that at all. Just that there are technically sophisticated developments taking place in the space but most of the conversation that surfaces here is just related to politics or law or just personal opinion.

There is hardly any discussion here about zk, or wallet abstraction, or even breakdowns of the hacks.

Once the hivemind takes a position in social media, deeper technical discussions have no point. So even serious people in the space would just avoid it outside of some limited spaces.

There are an infinite amount of impressive technical things that we could be talking about. I'd rather focus on the things that are providing value to most people. The only value that I see cryptocurrencies provide is to people in non-liberal countries, but even there it's just a matter of time for the governments to block these currencies. Cryptocurrencies are just a hack even there.

> Once the hivemind takes a position in social media, deeper technical discussions have no point. So even serious people in the space would just avoid it outside of some limited spaces.

What is the point exactly?

> That something is more complex does not automatically imply that it is more valuable.

I believe the statement is that there are valuable things (in parent opinion), but they are not discussed on HN due to being technically difficult. This statement doesn't claim 1st half is implied by 2nd half at any point.

It would not matter if this title were changed to

"The biggest fraud of all time": why Ben Mckenzie became a crypto critic

yet HN commenters will often zero-in on the name "Ponzi". I always enjoy when HN commenters defend crypto by focusing on the definition of "Ponzi Scheme". It illustrates a commenter's moral and ethical blindspot.

Perhaps the victims and critics of cryptocurrency only care that fraud is being committed.

Of course it matters.

You can't just call a bank robber a rapist and label everybody who corrects your statement a morally and ethically flawed person.

> You can't just call a bank robber a rapist and label everybody who corrects your statement a morally and ethically flawed person.

Yes, but that isn't what is happening here. It sounds like you might be one of the people with the aforementioned blindspot.

Yes, but I'm still wrong, without elaboration, and add then a touch of gaslighting? Jez.

You're an adult, people aren't going to spoon-feed every tiny thing in the world to you.

But every Ponzi scheme is a fraud, and crypto has multiple flavours of fraud using the misnomer of Ponzi but it's still adjacent (or part of the same superset "fraud").

So if it's to be pedantic, your analogy is also rather flawed since a bank robber and rapist do not share much of a superset except for the larger "criminal" set (which "fraudster" is also part of).

As @patdennis famously tweeted:

> Sick of people calling everything in crypto a Ponzi scheme. Some crypto projects are pump and dump schemes, while others are pyramid schemes. Others are just standard issue fraud. Others are just middlemen skimming off the top. Stop glossing over the diversity in the industry.

https://twitter.com/patdennis/status/1518637225789042688

It’s clearly a misnomer.

We should call it what it is, and what people will call it in a 100 years: Crypto Scheme

Note that this page hijacks the back button, and is paywalled.

Reply on news.ycombinator.com