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Comment by panarky | Hacker News Reader

>>> Did you fly to the Super Bowl in a private plane?

> all crypto is a scam

Most people think SBF spent all his customers' deposits on private jets and luxury condos, and blew the rest on shitcoin bets that went bad.

But despite the insinuations of prosecutors, the PJ trips just don't add up to much in the scheme of things, and the real estate is still there and can be sold.

Yes, some shitcoin bets were bad, but they're offset by investments that paid off like the Anthropic stake.

It's likely that the only haircut depositors will have to take is the billion dollars in bankruptcy lawyer billings.

> the bloody Washington Post told you it's either a Ponzi or a pyramid scheme in 2015

If you put in $10K when WaPo told you it was a Ponzi, you'd have $1.6M today.

Maybe next time the bloody Washington Post gives you investment advice, you should do the opposite.

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> If you put in $10K when WaPo told you it was a Ponzi, you'd have $1.6M today.

This is the fuel that drove crypto. Yes it's a scam; I'm just hoping others will buy in after me and I can cash out with their money.

Oh, so stocks must be a ponzi as well.

Investment into a corporation becomes capital. It is used to buy resources which when combined properly can be sold for more than the raw cost. You are entitled to a share of these profits in the form of dividends.

On the other hand, buying crypto"currency" becomes ... just that. It sits there until you sell it to someone else.

In other words, if you rolled back all transactions in a stock ever made you'd end up with a positive sum totaling dividends paid out. If you rolled back all Bitcoin transactions you'd end up with a big fat zero. Minus, in both cases, transaction fees but while it's a mere convenience for stocks it's inherent in Bitcoin which makes it a negative sum game and as such a scam.

Unless you take part in a share emission, then no, investment in the form of buying stocks does not become capital.

There's a seller for every buyer, and the company does not care about it any more than having happy owners is good.

Investment in the form of bonds is another thing entirely, that's purely capital.

Clearly currencies don't pay dividends but doesn't matter for this argument. There's a fair chunk of people treating stocks exactly the way gp described. To conclude from that that all stocks are a ponzi is as retarded as it is to conclude all crypto is a ponzi

> as it is to conclude all crypto is a ponzi

Yet we didn't conclude only from this all crypto is a ponzi.

That all crypto is a scam clearly comes from the fact it is a negative sum game. When you have a game where you can tell which set of players in total are going to lose and which set of players in total are going to win without knowing the rules of the game -- that's clearly a scam. All you need here is any commodity with baked in transaction fees. The exact same would be true if you traded with plastic poker chips but you needed to pay someone a fee whenever you bought or sold one. Indeed, reviewing the process with such chips makes it more clear, stripped of high tech mumbo jumbo.

Stolfi argues all crypto is a Ponzi because 1) people invest into it because they expect good profits, and 2) that expectation is sustained by such profits being paid to those who choose to cash out. However, 3) there is no external source of revenue for those payoffs. Instead, 4) the payoffs come entirely from new investment money, 5) while the operators take away a portion of this money. Our argument in the previous section was 3-5, you need to add 1 and 2 for it to become a Ponzi. https://ic.unicamp.br/~stolfi/bitcoin/2020-12-31-bitcoin-pon...

Who's we? Cause I didn't see gp making this point.

The little club derisively called "crypto antagonists", I guess.

Is crypto not a ponzi as an investment, though? Who in their right mind buys currency and sits on it as an investment? If it has utility as a currency, then use it as one, otherwise it is just speculative, and a speculative investment which relies on other people to buy out your stake and has no positive cash flow is a ponzi. No?

Gold.

Y'all really should read Stolfi because he carefully addresses all these, gold stock etc

> gold has a source of revenue besides the investors; namely, the purchases by consumers like jewelers and industry, who take gold out of the market (2/3 of the production) for uses other than re-sale. When one buys 1 oz of gold, one gets a chip of a metal that one can sell to those consumers, and thus obtain some money that does not come from other investors.

This is simply mentally reclassifying "consumers" outside the category of investors.

The argument for crypto, etc is the same. There are consumers who want to make purchases, use contracts, etc.

No, it's saying that gold has value as a commodity as well as a currency. You can't melt down a bitcoin and sell it as jewellery.

The commodity use of gold is very minor. It's liked in jewelry not for its utility, but its prestige. So once again gold jewelry holders look an awful lot like investors. Just like how ETH enthusiasts do, even if they also use it to perform tasks with smart contracts.

Actually, all commodities and it is a known issue with commodity investments (which maybe are more like trading positions therefore).

Stocks are ownership of something real. The company you own a share of does things in the real world. They can make intelligent (or stupid) decisions about the company strategy. They can enter new markets, or launch new products. They can share a dividend with the owners.

Obviously there's still investment bubbles - but underlying it all is ownership in a corporation.

Not necessarily but some financial products based on stocks can be and meme stocks usually function much like ponzi schemes (i.e. buying a stock, telling everyone else to buy the stock because it'll go to the moon, then selling the stock before everyone else finds out they were the only ones adding value to it, forcing them to sell at a loss).

Stocks don't rely on other people buying in to create value. They are buying into something with underlying value.

That doesn't explain GME or BBY. Which have explanations, but I wouldn't call rush underlying value.

Fundamentals define a floor for stock price, but above that it's all vibes. Which is fine, as long as we're on the same page.

I'm not saying rush is underlying value.

The biggest and greatest of them all!

Tell me you lack basic financial literacy without telling me...

> If you put in $10K when WaPo told you it was a Ponzi, you'd have $1.6M today.

In 1999 Harry Markopolos had informed the SEC Madoff was running a fraud. Yet it took until the 2008 financial crisis for Madoff to be exposed. I am sure you've made quite some money if you invested with him in this time period.

> Maybe next time the bloody Washington Post gives you investment advice, you should do the opposite.

I did and I had significant losses. What does that say about your statement?

The price of Bitcoin in 2015 was ~$350. To have significant losses after buying at that price point would have taken very serious skill.

Could you elaborate a bit the "very serious skill" needed to store your bitcoin in e.g. Bitfinex or CuadrigaCX?

Since it's apparently not obvious, long term holding your coins in a centralized exchange misses the entire point of crypto. Not understanding that takes some skill indeed.

Oh, neat. So misplacing your hardware wallet also requires lots of skill. Gotta love that rugged libertarian individualism that turns bad luck into stupidity and good luck into galaxy brains.

You mean to say you didn't make any backups?

Each time it doubled you would have been a fool not to sell it.

Holding is about the same thing as buying but with no transaction cost.

It says the bloody Washington Post has no obvious skill at predicting the future, therefore any statements they make should be taken with a hefty dose of salt.

The article was not predicting the future, though.

https://www.washingtonpost.com/news/wonk/wp/2015/06/08/bitco...

> The thing is, I don't actually use it. I just hoard it. I'm waiting for some greater fools to push up the price by using theirs.

And what is this made up quote (not to call it a strawman, as the wapo is certainly a prestigious outlet with very high standards) supposed to prove?

you should have hodld

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