[izzydata]

It's weird because it seems like you can point to various aspects of crypto and maybe identify them as being a pyramid scheme, but I don't feel like that definition holds up as it gets sufficiently large and self sustaining. Otherwise you could point to a number of other very large money machines like the stock market or even money itself and say it is also a pyramid scheme. Maybe it is though. Perhaps the entire economy is a pyramid scheme that is dependent on an infinitely growing population.

As soon as we hit a population limit on the planet there will be no bigger fool to sell to in the future and the economy becomes stagnant.

As for the literal definition of ponzi scheme I don't think it holds up because everyone is fully aware, or should be of what it is they are buying and where the money is coming from if they want to sell.

[EGreg]

The same can be said of any startups. They are pyramid schemes until they finally offer utility to customers.

What is sometimes up for debate is whether something is serious utility, such as “owning” a picture anyone can look at, or a digital experience in the metaverse with artificial scarcity.

But then again, under the capitalist system, we need to introduce scarcity even where it’s not easy to do so, in order to recoup initial venture capital. So for example, I remember stories about SWAT teams raising grandmas for downloading movies illegally, or about manufacturing companies all forced to cripple their software with DRM, or the blowup at the W3C, or crackz of popular software that kiddies handed out until all these companies like Adobe went full SAAS. It’s an antipattern that is the direct result of any capitalist system.

By contrast, open source, creative commons etc. doesn’t have that issue.