[douglaswlance]

This isn't a crypto failure. Crypto works.

This is a human failure. FTX didn't collapse because of the technology. It collapsed because of human error.

The fix is rather simple. If an organization looks like a bank and quacks like a bank; it should be regulated like a bank.

[bmitc]

People keep saying this, but I don't follow. FTT was a token manufactured out of thin air. Crypto works as a concept, I suppose, but people saying crypto works is like the people that say Agile works. How long do we have to wait to see crypto working? Where are the success stories of crypto? There's a long laundry list of hacks, scams, company failures, "tokenomics", NFTs, <x> on blockchain, etc. Saying crypto works as a technology base is not enough. Currencies and tradeable "assets" are a social thing. It isn't just a technology.

[Nursie]

This is what the entire cryptosphere always seems to miss - society. People have pitched cryptocurrency/blockchain/NFTs for all sorts of things, and every one is a pure tech solution that misses the social aspect.

I had someone try to tell me blockchain voting would fix Russian democracy, because it would ensure transparent, accountable elections. OK, so how are you getting it in there? Just going to stroll into the Kremlin and make the current leadership implement it? You’ll be laughed at shortly before your arrest. No, fixing Russian politics is primarily a social issue. Transparent, accountable voting could be part of a possible future effort at reform, but first you need to somehow gain the power to implement reform at all.

Coming up with a software solution alone does nothing. And this is what is often missed.

“I can imagine a better future in which my amazing software solution plays a pivotal role, therefore if I create that software, things are sure to turn out that way”

[capkutay]

FTX is a centralized (not DeFi) exchange that used their own coin as collateral and obfuscated their liquidity. This wouldn’t be possible in open decentralized exchanges that many in web3/crypto were advocating for. However SBF made it his mission to lobby regulation on DeFi and a blind eye to CeFi exchanges like his own.

https://www.politico.com/newsletters/morning-money/2022/10/2...

[hiq]

You just get a different set of tradeoff on a decentralized exchange. E.g. many users don't have the basic opsec required to protect their private key without losing it.

For a cryptocurrency owner taken at random, I think it's likelier that they make a mistake with their private key than they lose tokens held in a Coinbase (or another CEX among the less dodgy, regulated, etc.) account.

[boppo1]

>basic opsec required to protect their private key without losing it.

Exactly. I've long wondered if there's any way to overcome this without essentially going back to a 'trusted broker/custodian' model

[vkou]

> many in web3/crypto were advocating for.

If many people in this space are advocating for decentralized exchanges, how come everyone uses centralized ones?

If there's ever a time and place for voting with your wallet, this seems to be it, and the wallets are speaking loudly and clearly.

[zeroclip]

The wallets are speaking clearly, DeFi volume is through the roof right now.

https://defillama.com/dexs

A lot of people put money on CEX because they are ignorant, or willing to take on some risk for slightly cheaper and faster trades. Those people probably regret their decision now. If they used Uniswap and Aave they could not have withdrawals paused because of one company’s insolvency.

[apienx]

"If many people in this space are advocating for decentralized exchanges, how come everyone uses centralized ones?"

Convenience.

[boppo1]

DeFi doesn't interface with fiat.

[naijaboiler]

Its really a viewpoint common to tech workers. They see and solve the technological aspects of a problem while remaining blind to the larger more complex social aspects that remain unsolved, but think the problem is solved.

Here are other examples:

- promising self driving cars (driving is more than a technical activity, it's a social activity. AI is nowhere close to driving the easier technical aspects, much less the more complex social aspects)

- AI is already better than or will replace doctors. As of all doctors do is look at symptoms and up with diagnosis. The social part of medicine is the larger job by far, not diagnosis.

- algorithms can't biased. My AI predicts some function that has some real life impact. That the input data is biased, and therefore the output data is just as biased or even more biased. Well that's not my problem. I only build models, and lines of codes are not biased. But the result of your work is being used in the society to perpetuate bias. It's not okay to remain wilfully oblivious to that.

[netheril96]

Lumping diagonally opposed things (centralized coins like FTT or decentralized coins like BTC) under the same category (crypto) is quite misleading.

> How long do we have to wait to see crypto working?

BTC (on chain) is still working as intended, after all these years.

[grumpyprole]

> BTC (on chain) is still working as intended, after all these years.

It's certainly working on destroying the planet with its obscene energy requirements.

[irusensei]

Energy which was paid for. If there is a problem with that then price it accordingly.

[me551ah]

Energy which is used to mindlessly calculate dumb hashes, trillions of which are discarded every second for the winning 'hash'. Proof of Work is basically lottery, but which consumes energy instead of tickets.

[irusensei]

Not a miner. I do use a computer to calculate dumb stuff all the time for entertainment purposes.

I mean… Cyberpunk 2077 could run acceptably on an integrated 65W APU but instead I chose to crank everything on max with ray tracing through a 4090 just to see some dumb frames on a screen that are discarded at a hundred per second.

And I don’t ever remember having to ask permission to use the kW h I’m paying for.

[paulgb]

Nobody has the power to unilaterally “set the price” of energy, it’s set by the market.

Free markets are great for a lot of things, but pricing in externalities isn’t one of them.

[irusensei]

Agreed but I think people should be looking at power companies and how they generate energy for accountability instead of going for industry A and B. Wiping PoW from the face of the earth won’t make those coal plants in China go away.

[netheril96]

Well, maybe I should raise the example of ETH instead. It is still working as intended, decentralized, and consuming little energy.

[grumpyprole]

Given ETH only switched to proof-of-stake this year, I think perhaps it's a bit early to call it out as a long-standing energy efficiency success.

[systemvoltage]

I am not a fan of "destroying the planet" arguments mainly because anything goes, super ambiguious and not very precise. Buy our razors because cartridge razors are destroying the planet! https://bandisposablerazors.org/

Destroying the planet = Can't question it, can't argue about it, it is the end all of all arguments. How could you ever oppose something that destroys the planet?

They all sound the same: https://en.wikipedia.org/wiki/Greenwashing

[kevinak]

On top of being hard to argue against, it just isn't true. It's a net positive for the environment, at least it will be in a couple of years: https://batcoinz.com/50-landfills-mining-bitcoin-a-zero-emis...

[Stention314]

This is wrong and green washing.

We could also use this energy for better things than Bitcoin.

And while BTC doesn't make any value besides moving money from one person to another, it also produces hardware garbage like ASIC chips and power supply.

It also steals demand from others too.

There is only downside for most of us than benefit of allowing Bitcoin mining independent of it's source.

[systemvoltage]

Generally though, conceptually the argument goes like this "You can't do X because it destroys the planet. Since we cannot destroy the planet, there is no other option but to accept banning of X". But, there is no limits or guards to this. You can easily go down the slippery slope and say X is the city of Chicago that needs to be destroyed for the collective good. It consumes too many resources.

Riddled with subjectivism. You cannot do less since there are no objective limits to what is "acceptable levels of destruction of the planet" means. It has a different subjective weight to different entities arguing the position. In the limit, this would mean we erase humanity all together and leave the planet alone.

You can bully a lot of things your way before any one can speak up against it. There is a level of insidious moral superiority built into it which makes it prime for exploitation. Corporations are doing exactly that.

[pksebben]

is this paper saying that Bitcoin _will_ all be mined using methane, or that it _could_? because those are two vastly different conclusions.

[YossarianFrPrez]

It's an interesting level of abstraction question. On a fine-grained level, yes, BTC works algorithmically as you have pointed out, and FFT is not the exact same thing as BTC. The question the is whether either of these things work socially / for society.

Whether it's accurate or not, I imagine non-experts would regard the difference between BTC and FFT as pretty negligible, perhaps akin to the difference between "social media" and IG vs. Reddit.

[Bootvis]

The creation, distribution and governance are completely different. The public may not care but in the long run we mow see it matters.

[Bootvis]

To support my point:

https://mobile.twitter.com/whale_alert/status/15916165982801...

This doesn’t happen with BTC because it wasn’t created out of thin air.

[bmitc]

> Lumping diagonally opposed things (centralized coins like FTT or decentralized coins like BTC) under the same category (crypto) is quite misleading.

Crypto generally means digital currency, does it not? I think leaving them out would be actually misleading.

> BTC (on chain) is still working as intended, after all these years.

Working in what sense?

[wsc981]

> Working in what sense?

That you can securely and cheaply transact value without a third party being involved?

That governments can’t directly block your account the way Trudeau blocked protestors bank accounts?

Probably a few other ways as well ...

[Stention314]

Bitcoin fees are often not cheap at all.

Just a week ago someone got cought and the fbi took his 3 billion dollar worth of BTC.

Sending crypto to someone in Iran or Russia is against the law independent of how you do it.

And just because you can send BTC to Iran someone in Iran also needs to exchange it to something real again.

While banking is more restrictive, when you go to your bank with your passport, you actually can recover your account. I know someone who lost 10k because he lost his key.

For most people it's saver and easier and they are not affected and don't care about all those BTC/crypto benefits at all

[kevinak]

You need to start backing up your statements with facts. Please show us that bitcoin fees are "often not" cheap at all.

Here's some actual data you can look at: https://mempool.space/graphs/mining/block-fee-rates#all

Look at the "Min" fee rate; regularly very close to 1. That's $0.02 at current prices.

[wsc981]

> Sending crypto to someone in Iran or Russia is against the law independent of how you do it.

One thing to keep in mind: laws are not always just.

I believe it's okay to sometimes not follow the law, if the law is unjust. One example: in WW2 Germany there were many laws against minorities that were unjust [0]. Most law obedient people would follow these laws regardless.

Perhaps a person want to support his family in Iran or Russia that's going through difficult times. And perhaps crypto is the only way to help. In such cases I think it's okay to oppose the law.

---

[0]: https://encyclopedia.ushmm.org/content/en/article/the-nuremb...

[me551ah]

Crypto works for what use case exactly? Crypto payments take much longer time than traditional credit card ones , are barely supported by most websites and in many cases cost more in transaction fees than credit cards.

And with a lot of people storing their money in these major crypto banks , what we now have is a fairly centralised structure which kind of defeats the purpose of crypto. Worse, these banks also hold each other’s tokens similar to what your normal banks do. And if that’s not enough some of them even do fractional reserves and use the real money they get for investing.

[rabite]

Perhaps for the use case of the underbanked, which is the majority of the world. That I need to wait for confirmation on the blockchain for a crypto payment is orders of magnitude faster than my other option, which is wait for someone to manually bring in foreign currencies by train. My country is not on SWIFT. My passport will not allow me to get a bank account in any country that would let me process credit cards. I am not allowed to use Paypal.

This kind of comment is the epitome of the Western privilege -- your governments cut off entire countries from the banking system, deny their own citizens access to banks because of their political beliefs, and then tout the alleged superiority of your credit cards, which are now denied to truckers and Kanye West by the same companies that were happy to do business with Pornhub when they were knowingly facilitating the monetization of child sex slaves.

Credit cards and United States dollars are the tools of thieves, thugs, rapists, and warmongers. Bitcoin works for the use case of not staining your hands with the blood and tears of their victims, at the very least.

[me551ah]

I'm from India, one of the most populous countries in the world. And we have instant online transfers with no transaction fee and it's called UPI.

[rabite]

That's not what we were discussing. Here's your quote:

> Crypto payments take much longer time than traditional credit card ones

Everyone in India can process an American credit card? Indians are magically immune from political censorship on the basis of the payment card associations?

[kevinak]

Is everyone in India banked? How do you transfer money outside of the India? Can you do that insta fly with UPI as well?

There are more countries than India, I’d suggest maybe taking a look at South America, Africa and Asia.

[ipython]

This argument always intrigued me. Once you point out cryptocurrencies don’t actually solve the unbanked problem for poor people, then the use case immediately shifts to “well have you tried to move seven figures between countries”?

By the way many African countries have a robust mobile phone based banking infrastructure. Nothing to do with cryptocurrency. See https://qz.com/africa/2161960/gsma-70-percent-of-the-worlds-... for example.

[foogazi]

> This is a human failure

Is there any crypto out there without humans ?

Is there an undo button to reverse the transaction?

All financial systems involve humans

[hestefisk]

Spot on. Money is a social construct after all and thus subject to human fallacy.

[imgabe]

There is the same undo button that exists for every other financial institution that commits fraud: lawsuits.

[Thorrez]

And if you can't find the person to sue because the person is an anoymous hacker? With fiat the court will tell the banks to reverse the transactions.

[imgabe]

That isn’t the case here. Anyway, people get defrauded through banks all the time with advance fee fraud, 419, and other scams and banks don’t reverse those.

[Thorrez]

>That isn’t the case here.

What do you mean? Are you saying FTX wasn't hacked by an anonymous hacker?

Banks reverse transactions sometimes. It sounds like in many cases the reason they can't be reversed is because the money got converted into cryptocurrency.

>Wire Fraud Recovery is Difficult, but Possible[1]

>When the stolen funds arrive in the fraudster’s bank account, they engage a network of money launderers who immediately withdraw funds in cash, wire the money to a number of different accounts and/or convert it to cryptocurrency.[1]

>A full recovery of lost funds was only possible in 29% of cases. In 40% of the cases, less than 10% of the funds were recovered.[2]

That means that 60% of the time at least 10% of the money is recovered.

>Cyber perpetrators are moving stolen funds between bank accounts and cryptocurrency wallets at a rapid rate.[2]

[1] https://www.certifid.com/article/how-to-recover-from-wire-fr...

[2] https://blog.alta.org/2021/04/survey-title-professionals-tar...

[miguelmota]

If someone sends physical cash to a person across the world, is there an undo button?

[Thorrez]

* People rarely deal with large amounts physical cash. They deal with abstractions built upon cash (checks, credit cards, ACH, other electronic transfers).

* I think it's the same for banks. I think banks also mainly operate on abstractions built upon cash.

* An attacker who wants to steal physical cash needs to be physically present. That means there's a more limited set of people who could attempt the attack. With hacking, people across the entire world can attempt the attack. With physical attacks, you're at risk of being physically apprehended and caught through physical investigations. With hacking you can be behind proxies and avoid getting caught. Additional, with hacking you can do the hack from a jurisdiction that won't care, so even if the victim and the victim's government know you did it, you won't face any consequences. You might even be on your own government's payroll.

[miguelmota]

> Is there any crypto out there without humans ?

What OP is referring to is that you don't need to trust people if the dex is on-chain and verifiable. FTX was a non-transparent and insolvent centralized exchange which wouldn't be possible if it was on-chain because anyone can see the funds that are available and the protocol would not allow leverage backed by non-existing collateral.

> Is there an undo button to reverse the transaction?

No there isn't. This is a double edge sword.

> All financial systems involve humans

To a degree, but centralized exchanges have more knobs controlled by humans while an on-chain dex and just be deployed once and require no human intervention. A dex can be audited fully on-chain and anyone can see if the contract has any master holder keys. The FTX fiasco is because they own all your crypto because they have the master keys. The future of finance is people being in charge of their own money and where no unexpected entity can arbitrarily inflate the supply, which is only possible with crypto.

[blueblisters]

What foogazi was perhaps suggesting is that no financial system can work if it doesn't account for fundamental human behavior - we make mistakes and we are greedy if not held accountable "off chain".

The blockchain is perfect when everyone acts in good faith and makes no mistakes.

In the real world, that's not the case. Unfortunately, you need centralized institutions to regulate financial transactions, control the supply of money and enforce laws when they're broken, reverse mistakes when they happen.

> The future of finance is people being in charge of their own money and where no unexpected entity can arbitrarily inflate the supply, which is only possible with crypto.

This is not the future, and it'll almost certainly never happen with crypto.

[miguelmota]

Then what is the future? Certainly not the government going haywire with the printer. It’s impossible to trustlessly verify the exact number of US dollars in circulation, but it’s trivial to do with cryptocurrencies.

[lottin]

Removing the possibility for human intervention doesn't make things more resilient quite the contrary. Removing human control of public policies, such as those involving the management of public resources, is downright anti-democratic and dumb. If you people intend to build a monetary system, you need to educate yourselves about monetary systems. The money supply must be managed (i.e. inflated and deflated in your unconventional parlance) in order to keep prices stable. An currency in which prices are not stable will never be used as currency by businesses because it would put them in danger of going out business due to price swings. Restricting the issuance of currency doesn't make the supply of such currency fixed. Look up how money is created by the banking system. Only a small part of the money supply is money created by central banks.

[miguelmota]

The money supply managed by an on-chain protocol where it’s fully open, trustless, and predictable is 100% times better then a small group of people at the treasury deciding to print money and inflate peoples savings always.

[lottin]

> is 100% times better

I think this says it all.

[YossarianFrPrez]

I agree that the algorithms powering crypto are sophisticated pieces of technology. Just look at the zero-knowledge proofs.

The thing is that "not being regulated like a bank" is exactly what many people like / liked about it. (Yield farming, using DeFi for mortgages, etc.)

What I'm saying is that Crypto seems to be headed to being taught alongside, if not the Therac-25, then the Mars Climate Orbiter (which was lost to some people working in metric vs standard.)

[ISL]

If there were a clear and well-regulated equivalent of Tether, with obvious and transparent dollar-backing, I suspect it would find a lot of usage.

Might cost $1.15 to mint a new USD-coin redeemable for $1.00, but I suspect there would be an appetite.

Massive volatility and the occasional collapse of a crypto-bank are probably hindering the appetite of many people for anything in the crypto market. That population probably would dwarf any yield-farmers.

[atdrummond]

Right now stablecoins are a pretty profitable business because of interest rates.

An attestation report available 24/7 should be generated easily if you’re doing things properly, as well as frictionless burning and minting.

Note: I work for Glo, a non-profit stablecoin, so have a vested interest in this space. I do not and am not speaking on behalf of our group.

[everfree]

> If there were a clear and well-regulated equivalent of Tether, with obvious and transparent dollar-backing

There are several. I compiled a list of them a few months ago.

https://news.ycombinator.com/item?id=31381864

[jl2718]

A CEX is "like a bank" because it's a human that takes custody of assets, not because it does trades and loans. Smart Contracts, however, can't be regulated the same way that human custodians can, but they are also designed not to be able to do unexpected things.

[threeseed]

There have been plenty of examples of Smart Contracts doing unexpected things because all of the myriad of edge cases were not anticipated for.

It's one of the reasons the classic financial system works so well because it has the flexibility of manual fail-safes in cases where mistakes have been made. Smart Contracts will never really work unless it has the same.

[pksebben]

I don't really have a dog in either kennel, but something about the idea that a human absolutely must be in the control loop for a currency to work feels... not wrong, but maybe "not wrong so far".

We've managed to get computers to do some really batshit stuff. Drive cars, make art, algorithmically trade to a level of success a human could never dream of, etc. I don't know if a solution to the problem of managing the stability of a currency is around the corner, but I'm fairly sure somewhere in the future it exists.

And then, I can't help but think of how just about every disaster we've had in the financial system was a result of the humans with their hands on the economic knobs being knobs themselves. The solutions we provide when in crisis wouldn't be necessary if we didn't have such a strong tendency to drive ourselves off cliffs - not to mention that our current financial system has gotten so complicated I'm not sure there's anyone out there who truly, thoroughly, groks it without being reductive.

[hestefisk]

Indeed. Beyond the failure of human greed in the crypto Ponzi schemes, FTX is also a massive regulatory failure. These firms have been allowed to play with people’s money for too long.

[tenpies]

It's probably no accident that SBF made substantial donations to one of the major US political parties. And by substantial, I mean that party's second biggest donor in the '20-21 cycle.

[JamesianP]

I think the new laws and regulations are coming out as we speak. Since it's such a new area they have been slow. The SEC just hired a bunch of new people. They have been busy prosecuting people too.

I also think FTX has been violating plenty of them already from the sounds of it. They probably thought they were being clever, but wouldn't pass the "duck test".

[polygamous_bat]

> This isn't a crypto failure. Crypto works. This is a human failure.

"Guns don't kill people, people kill people."

[mjburgess]

A point no one who wants to ban guns would disagree with.

[pksebben]

the edge here being that if a tool is powerful enough to take someone's head off, we should probably do something to mitigate the risk of folks using it.

[threeseed]

> it should be regulated like a bank

And how would they implement KYC/AML regulations which are fundamental to banking ?

[TEP_Kim_Il_Sung]

By force, if necessary.

[threeseed]

No technically. There are seemingly endless ways to move funds anonymously.

[MacsHeadroom]

There's endless ways to move cash.

If/when the movement of cash/crypto is peer-to-peer or interacting with a machine only (a machine that gives quarters for dollar bills or a DEX, for example) KYC is entirely unnecessary.

[threeseed]

Dealing with large volumes of cash is very difficult.

It's physically large so you can't move it between countries with drawing attention from customs and security. You can't exchange it between currencies easily since brokers are required to implement KYC/AML. Banks have automatic triggers on their internal systems to notify regulators if you deposit/withdraw large sums.

And if it's being tracked then washing it requires you having to go through exotic means like poker machines since all simpler options have been locked down over the decades.

It's one of the reasons crypto is so popular with states like North Korea, Iran etc because it's scalable enough to allow them to move billions.

[himinlomax]

Bad user interfaces have caused catastrophes (see for example Three Miles Island or the Mont Saint Odile Airbus crash) that have also been labeled "human error", but those catastrophes wouldn't have happened without the bad UI.

[baq]

The fraud going on in there was not human error. Reuters wrote about a backdoor sbf used to make transactions with ftx assets off the books, without alerting controls. If this is true, it’s oceans eleven stuff.

[listenallyall]

This seems like a simplification. Crypto, like any currency, needs to be able to be easily converted to and from other currencies. I can walk up to thousands of money changers and exchange USD for Euros, Pounds, and plenty of small countries' currencies. Meanwhile it may be technically possible to do the same with crypto, virtually nobody is, and the places that do offer a conversion, like BTC ATMs, charge enormous fees.

[MrMan]

as SBF himself allowed in the Bloomberg interview, this system only works if humans, driven by FOMO and greed, bid up the tokens. that, more than the technology underpinning the system, is a necessary condition for defi or centralized crypto to "work."

defi is rife with hacks theft and rug pulls. but a form of fraud that is built into the entire ecosystem are tokenomics that carve out allocations of tokens to early holders, so they front run every one else.

this cannot be escaped - there is no refuge from the grift built in to the entire ecosystem. decentralized is a lie propagated to support a scam on everyone who got in later than early holders.

[Thorrez]

If a bank gets hacked, generally the transactions get reversed. If a cryptocurrency exchange gets hacked, that generally can't be reversed.

Regulation can make things more secure, but I don't think it can realistically stop all attacks. Regulation is slower than attackers. The ability to reverse transactions is what's really needed to prevent attackers from getting away with money.

[lottin]

Who will be in charge of deciding which transactions need to be reversed and when? It seems to me that the ability to have reversible transactions is at odds with the descentralised nature of blockchains.

[Thorrez]

I agree with you. There doesn't seem to be a good way to allow transactions to be reversed while keeping decentralization.

My point is that this decentralization is bringing in a risk that traditional banks don't have. So saying "regulating it like a bank will make it as secure as a bank" is incorrect.

[iamacyborg]

Tell that to the folks who forked Ethereum.

[albertopv]

All crypto currencies are a ponzi scheme. Change my mind.

[everfree]

In a ponzi scheme, there is a fictitious business model that's purported to be turning a profit, and its lack of profit is hidden by secretly using new inflows to pay off old investors.

In crypto, none of that is hidden. It's widely known that dollars cashed out by earlier investors come from the coffers of later investors. Since e.g. Bitcoin doesn't deceive people about being a profitable company, it's by definition not a ponzi scheme. It's important to use this terminology correctly.

[lamontcg]

"It can't be a Ponzi because they're honest about it being a scam right up front"

[everfree]

That's how the definition works, yes.

By the way, who is the "they" that your sentence refers to?

[paulgb]

Saying it’s not a Ponzi doesn’t mean everfree is defending it, it’s just useful to have precise definitions about these things.

[JamesianP]

well you have to draw a line somewhere. Call it something else if you want to criticize it. Like a bunch of fools racing towards a cliff.

But if they're honest about something being a scam how can it be a scam? Seems like a paradox.

[lamontcg]

Literally only a paradox in places like Hacker News by people who are motivated to question calling crypto a Ponzi.

I've got bad news. It is still a Ponzi if people are "honest" about it being a Ponzi, it is still a Ponzi if it started out as an investment idea and it went Ponzi as losses added up. Arguing that clear Ponzis aren't really Ponzis due to some kind of semantic rules is a gigantic display of "copium".

The only real difference is the distributed and decentralized nature of the scams. And the CEO of JPMorgan has described crypto coins exactly as a "distributed Ponzi scheme" before Congress.

If you wind up paying out redemptions with new deposits as fast as you can, right before you fail hard, then it was a Ponzi all along. That's it. That's the definition.

[everfree]

> It is still a Ponzi if people are "honest" about it being a Ponzi

It literally isn't. Please go back to the definition, which requires a specific type of deception. If you wished, perhaps you could call crypto some kind of gamble, confidence game, or other category of scam.

> Arguing that clear Ponzis aren't really Ponzis due to some kind of semantic rules is a gigantic display of "copium".

From your tone it seems like you think I'm trying to defend crypto in this thread. I'm not. I'm trying to defend the meaning of a precise and descriptive term so that it doesn't get watered down to the point of being synonymous with "scam". Because if that were to happen, we would lose a useful phrase in the English language.

It really ticks me off when people knowingly use terminology incorrectly like this out of anger. Just call crypto a scam or a con if you want. There's no need to let your anger leave a mark on the English language itself.

> And the CEO of JPMorgan has described crypto coins exactly as a "distributed Ponzi scheme" before Congress.

Well he was using the term "ponzi scheme" incorrectly then, and should have used a more general term like "scam". Really, this isn't hard. Just read the definition.

It's also worth noting that JPMorgan executed their first trade on a public ("crypto coin") blockchain last week, so maybe he ended up changing his mind? Or maybe there's some internal consistency with JPMorgan investing effort in things they believe to be ponzi schemes - I'm not one to try to make that distinction.

> If you wind up paying out redemptions with new deposits as fast as you can, right before you fail hard, then it was a Ponzi all along. That's it. That's the definition.

That's not even how cryptocurrency works. Not even beanie babies or tulips worked like that.

[JamesianP]

Do you consider social security, or for that matter all government tax and welfare systems which depend on growth via immigration to be ponzi schemes too?

Why do you believe it is bad news to me? It's just semantics.

[px43]

Ponzi schemes by definition use opaque ledgers. Ponzi schemes are custodial. Ponzi schemes guarantee returns.

There exist Ponzi schemes which have disguised themselves as cryptocurrencies, but the idea that all cryptocurrencies are Ponzi schemes demonstrates a complete ignorance of what a Ponzi scheme is.

[polygamous_bat]

> Ponzi schemes by definition use opaque ledgers.

Why? To me a ponzi scheme is where the earlier "investors" get paid out with the money of later "investors". That's it. By that definition it's quite the "decentralized", somewhat stochastic ponzi.

[px43]

Ponzi victims are told on paper that their "investments" are increasing in value, and that they can withdraw at any time, when in reality, the assets don't actually exist. Also a key aspect is that their balance only ever goes up.

[someguydave]

Your definition covers every investable asset.

[cdiddy2]

your definition includes stocks. I suppose you might be right that stocks are a ponzi

[tehjoker]

they weren't back when the reason people bought them were dividends, now the only real exit is if the company goes bankrupt or is purchased. The intervening time is hard to describe as anything other than pure speculation and piling dupes on top of each other

[imtringued]

Take a look at RAI.

[anomaly_]

Do you know what a Ponzi scheme is?

[croes]

So bank regulation worked in 2008, is was just a human failure?

Communism works, it's just human failures?

The measure of whether something works is whether it prevents human failure.

[pksebben]

We had gotten rid of bank regulation, which caused 2008.

https://www.federalreservehistory.org/essays/glass-steagall-....

[croes]

Pretty US centric view.

Banks in other countries were affected too, despite regulations.

[dmichulke]

You forgot:

Regulation works but it was just human failure:

https://en.wikipedia.org/wiki/MF_Global

[hestefisk]

Socialism to some extent has been successful in some countries. Sweden is a good example.

[BlueTemplar]

No it isn't. Pretty sure that they have a lot of private entities owning the means of production in a free(ish) market, and not mostly the government ?

[vinay427]

I agree with your statement, perhaps with a very loose sense of “socialism to some extent”.

However, socialism is not communism, which is what the GP comment mentioned.