The only reason you cannot say Coinbase is isn't a scam is because it is impossible to prove that the people involved were lying in regards to the viability of crypto not being effectively a Ponzi scheme.
It is very difficult to believe Brian Armstrong was cynically cashing in on what he perceived as a Ponzi ten years ago when he founded Coinbase (he posted an ad for a co-founder here on HN).
Unless you personally know him well and have spoken with him at length about this, I don't think that opinion is based on anything substantial. A post on HN looking for a cofounder tells you only what the person wants you to believe they're thinking and feeling about what they're doing.
My opinion is based on it being completely insane to stake multiple years of your life on starting a cryptocurrency exchange in 2012 unless you had a sincere belief in the promise of blockchain technology. Crypto circa 2012 didn't look anything like what it is now.
Agree with the sibling that people make insane gambles all the time.
But beyond that, I don't think your premise holds true. People do often start companies because they believe in (or even have a passion for) the thing their company will be doing. But people often just start companies because they believe those companies can make them money. That doesn't mean that the thing the company does is going to be good and sustainable over the longer term. Just that there's some money to be made, even if it's on the backs of speculators and gamblers that don't provide much value to the ecosystem.
People make insane gambles all the time? Some of the most neurotic people find success.
Imagine you could peer into all the class A gamblers, there'll always be a subset who get lucky and convince themselves they "worked harder' or whatever.
Point is, without proper interrogation, it looks like a gamble and crypto looks like a scam. There's always tops of pyramid schemes.
Not really. Just you don't know what you don't know. You're not going to get a reliable feel for someone's motivations unless you actually know them and spend a bit of time talking to them about what they're doing. A "cofounder wanted" post on HN doesn't remotely cut it.
I think the Ponzi claims stem from the fact that so many people are in the market for speculative profit (and not to revolutionize finance or whatever), and the fact that earlier investors can only capitalize on their investments by proselytizing, recruiting, and ultimately selling their bags to new investors. Framed that way, it’s quite Ponzi-ish.
This is true of any value storage vehicle. You only make money - or get your money back out - by passing it on to the next person. Art, baseball cards, stamps, stocks, gold etc. all work this way.
Unlike cryptos, gold and stocks have real material value behind them, not just community buy-in.
You can make the art/baseball cards/stamps argument, but then you’d be conceding that the value of cryptos — something pitched as a revolutionary technology with limitless profit potential — is, in reality, determined by the same irrational valuation process as niche collectible markets.
There’s a reason we don’t pay for groceries and mortgages with baseball cards and stamps.
I’d love to hear more about the distinction between “real material value” and “community buy-in” value. It’s not a distinction I’m familiar with from my more than 20-year career in finance.
None of the things you mentioned are "value storage vehicles". Currencies may be a stores of value.
Gold is a hedge against hyper inflation and global crisis.
Art is an elaborate mechanism for money laundering.
Baseball, stamps, and pokemon cards are collectibles and eb and flow with the tides of pop culture
And I am too tired to explain stocks to you.
> You only make money - or get your money back out - by passing it on to the next person.
It might actual shock you to learn that the US money supply historically grows faster than inflation.
People can and do speculate on collectables. The difference is that there is underlying value in the collectable. There are people who would like to own a Babe Ruth signed baseball just because it is a unique piece of sports history and have no plan to sell the baseball when the price goes up.
Speculation on that asset can make the price go up far above the underlying value. But that comes at a high risk of the price falling down to the underlying value. For crypto this underlying value is basically zero.
If only I had a dime for every time someone on HN unironically threw around the term “underlying value” like it meant something they could build an argument off.
Coinbase doesn't do the Blockchain part, except as much as needed to enable a blockchain
-adjacent thing for people who don't want the blockchain part.