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by sporadicallyjoe 1067 days ago
Ben McKenzie claims the entire sector is a ponzi scheme. This is disingenuous at best.
5 comments

Comparing an unregulated industry that seems to uncover a major scam in a major player at least several times a year to the highly regulated stock market in which major scams involving major players are uncovered at a much lower frequency also seems purposefully disingenuous.
I dunno. When the scams get revealed in the stock market they tank the global economy. The composite risk assessment for the stock market is thusly somewhat higher imo
Now this is a disingenuous redefinition of scam.
What would you call bundling subprime mortgage backed securities and reselling them, while knowing full well that they're toxic?

Just because everyone is in on the scam, doesn't make it not a scam. It just makes it a systemic scam.

of course its not just for ponzi schemes. Other traditional financial crimes are possible and common , as well as financing of embargoed countries and criminal groups. So much possibility! Clearly a growth industry.
Or is it for having your money retain value in a country with high inflation and/or bad economic conditions and capital controls?
Put dollars into your mattress then. That's more secure. The value should be denominated in USD anyway, but in many cases isn't. Often the price is listed as BTC/USDT with USDT being yet another shady enterprise where part of the financial backing is from the value of BTC.
Lots of countries have capital controls that make it hard to get access to dollars. Especially countries with high inflation.

Why are you talking about usdt? The price of usdt has always been the same as usd and no one is forced to use usdt. This seems irrelevant.

Well apart from when the 15 or so times in the past few years where the value of usdt wasn't the same as usd... https://protos.com/history-of-tethers-peg-every-time-usdt-tr...
This just isn't super relevant to the discussion. Tether is a scam, ok, I think everyone agrees about that.

So don't use it.

without the illegal use cases to pump up the value of the coin, you're basically converting your currency to digital IOUs that fluctuate in price and there's no reason for them to have any value at all. The thing that gives all of these coins values is speculation due to all the scams and illegal money moving.
The far majority of the value in gold is essentially speculation as well, so I don't see a big difference.
one is a non expiring real world good with uses outside of speculation, and the other is a digital certificate of ownership of a number on a blockchain. If you truly cannot see the difference between the two, no one can help you.
I agree those are differences. I don't agree that the source of the valuation of these goods has anything to do with the differences you listed.
By now it has also been proven "crypto" isn't a bubble. It has been more than a decade of, for this sort of experimental asset class, pretty steady growth. The market is still there after central banks abandoned zero interest rates. Crypto has proven more resilient than the Tech startups (their bank went bankrupt and needed a bailout) and Credit Suisse.

This isn't a bubble, by this point it is a market for middleman-resistant bookkeeping. It'll be the same as gold, we've had people claiming gold is worthless for all of recorded history and it keeps on going.

>By now it has also been proven "crypto" isn't a bubble. I

It's not a bubble it's a set of scams whose primary value is in allowing bad actors be they oppressive governments or criminal groups to move money around bypassing embargoes and bans. On top of that we also get a new scam bubble every little bit so that we can point and say "see that one isn't a scam" until it turns out it is, or its being used to send money to north Korea or Iran or whatever.

It's not one scam it's a series of scams. It's not useless it also allows large scale financial crimes. It's amazing!

It’s hard to say what’s a long lasting bubble and what’s not until a lot of time has passed. I think one decade is not enough. I also believe that most of the cryptocurrencies (among the thousands of them) don’t live up to the main claims for cryptocurrencies. Perhaps Bitcoin and Monero (and projects very similar to Monero) will stand the test of time. And maybe Ethereum too. Of course, there will be new ones in the future, but most of the current ones…I wouldn’t bet that they aren’t bubbles.
> Someone who believes there isn't a single use case in the entire crypto sector

This is a strawman. There is abundant evidence that crytpo was being treated as a get rich scheme, and the lack of sustainable use cases are why the sector has contracted so much.

It is his stated view as reported in the penultimate graf, so no, it's not a strawman.
The main utility of Monero is being able to make anonymous transactions. The downside of the crime that this enables far outweighs whatever libertarian ideals I may be sympathetic to. It's just a bad idea for society.
This is a baseless claim -- virtually all criminal schemes in crypto have been done via ETH or BTC (most of which are token scams, and a small smattering of ransomware), which have transparent blockchains. Monero simply does not have the record of criminal activity that you claim.

More importantly, the vast majority of anonymous transactions occur via ownership secrecy havens. Quadrillions are held and transferred in offshore havens like Nevis, which has beneficiary and ownership secrecy baked into their constitution. Monero democratizes transaction secrecy, allowing the middle class to have the same level of financial privacy that criminal organizations attain regularly by incorporating in an offshore haven and hiring the appropriate lawyers. If transaction secrecy were a legitimate concern of yours, you would be eliminating it where it actually happens and facilitates crime first.

It’s way better than how the cartels do it. Feels like a win.
I don't think there's any evidence that those same cartels aren't also using cryptocurrencies. In fact, there's significant evidence to the contrary.
If you don't think cartels are using it I have to ask why not?
Do you say the same about cash? I am a fan of some molecules the government has erroneously classified as having "no medical use," and I tend to acquire these via cash routes. So cash also enables crime. Do you think we should transition to a fully networked currency that has perfect auditability for all transactions?

I'm sincerely asking. That appears to me the endpoint of the argument you make here. I might be wrong in my interpretation or conclusion, so please do correct any inaccuracies or leaps you find in my post.

I am not a fan of cryptocurrency, because I think it is stupid. But I am a fan of (actually) anonymous and privacy preserving currencies. So I can continue to not harm or victimize others, but acquire the molecules that make me the most functional.

This is certainly an ideal that libertarians hold, though I do not claim myself or my views as being particularly libertarian.

cash is hard but not impossible to track, especially at high volumes. An investigator could find which bank the bills went through, from there finding who may have withdrawn it. It also needs to be physically transported from place to place, meaning that there's some hope of tracking it down if there's enough reason.