[AnthonyMouse]

You do understand that would be a pyramid scheme, right? You can't sustainably create currency out of nothing like that. At best what you're doing is the same as what the Fed does when they print money, i.e. causing inflation, so that at least there is no big crash at the end where everyone left holding your currency loses everything (though that is exactly what would happen if your site ever experiences a significant reduction in the active user base, as it would cause hyperinflation until there are no sellers left willing to sell anything in exchange for your fake money, making it totally worthless). But you're still removing value from the credit each of the existing users is currently holding every time you do it. And you've set it up so that people can't get rid of the "money" in any way other than by putting it into the hands of some other sucker who has to hold it while its value drops every time you make more of it.

I can certainly see how that benefits your company, but I have a hard time seeing how I should like it as a user, unless I think I'm being savvy by getting in near the root of the pyramid and then immediately exchanging all my fake money for real goods valued higher than those I exchanged for them, and hoping I can make my exchanges before the market saturation point is hit and the free money stops.

[timmyd]

Have you read the sites context ? It's not a pyramid scheme. Lets recall what a pyramid scheme is expressly defined as

"A pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public"

Now lets read what the site does

"We buy your products for Honey. You buy anything using Honey." - all the products you buy using honey are new according to the site. There isn't a second hand market place on this site - so there is not any supply issues here. The supply is the company sending out products based on the current market value of the products interpreted into their model.

You sell your product, they will give you virtual currency in order to lock you into their ecosystem and then you buy a new product based on that honey value. Please explain to me, in lay terms, how that explanation is equal to the definition of pyramid scheme above ?

Frankly speaking, dealing with morons from craigslist is becoming a pain in the ass and if the value is not that different and these guys can give me the convenience, delivery and remove headaches - great. It comes down to their pricing vs. others in the market (gazelle and so on)

[AnthonyMouse]

>You sell your product, they will give you virtual currency in order to lock you into their ecosystem and then you buy a new product based on that honey value. Please explain to me, in lay terms, how that explanation is equal to the definition of pyramid scheme above ?

Thank you for pointing out that you don't use their currency to buy the products they purchased from their other customers (though it makes me wonder what they're doing with them then).

But let me put it this way: There are three ways they can offer you more for your products in fake currency than in real currency. 1) They expect users to hold an ever-increasing amount of their currency in their accounts and not spend it immediately. If too many users tried to spend their currency all at once they would go out of business and you would lose your money; it's a pyramid scheme. 2) They give you $440 instead of $400 for your iPhone, but then a new product that would cost $400 on Amazon costs $440 in their currency. It's not a real discount. 3) They take less as profit than Amazon, even on top of Amazon's economies of scale, which is almost certainly not sustainable.

[timmyd]

I'm terribly sorry. But your continued use of "pyramid scheme" is just wrong.

1) "they expect users to hold an ever-increasing amount of their currency in their accounts and not spend it immediately."

> Where does it say that ? Unfortunately no where. And who wants to hold their currency ? Use case: I want a new phone. I accept the offer from swapidy for X currency and then buy a new iphone at X currency. At what point do I want to hold my currency ? No, I want a new phone and if their pricing makes sense I transact. Thats it.

2) "too many users tried to spend their currency all at once they would go out of business and you would lose your money;"

> At what point would you loose your money ? The currency is valid and you can purchase an item. They send you that item. I am assuming your inference is that they do not stock any of the items they sell and I am unclear where you draw that inference from ? Please let me know if you have some sort of information that I do not other than what is illustrated on the site. If you transact and sell your phone, you send it to them and I assume they will subsequently sell that. You purchase a new phone and they send you that new phone. There is obviously the requirement for inventory and stock and so on. Thats a business and cost inventory issue, nothing else. If the company fails, you become a creditor - like when any company fails. It's a trust issue and up to them to ensure that its trust worthy.

3) "it's a pyramid scheme."

> No, its not. Refer above and please refer to Wikipedia or other sources to learn about pyramid schemes.

4) " They give you $440 instead of $400 for your iPhone, but then a new product that would cost $400 on Amazon costs $440 in their currency. It's not a real discount. "

> Amazon is not a fluctuating pricing market like ebay or other such services. You will receive a standardized cost on Amazon for a extended period of time whereas this site infers you will receive the current daily market rate or close enough. This is the difference and therefore ultimately the difference in the pricing mechanism. If you want cash, transact at some other market and see if the pricing differential is more advantageous than what they offer. Some items will be cheaper and some will not be - don't tell me they actually want to run a site that makes money ? The use of virtual currency is to lock a user into their service and there is nothing wrong with that if you want to accept their buy offer which is more than you would receive elsewhere. No one is forcing your hand to transact.

5) "They take less as profit than Amazon"

> How do you know what profit they take ? Feel free to let me know.

[theswapdaddy]

Thank you for the comment.

First off, as mentioned in the other comments, this is not a pyramid scheme.

Your currency will always be worth the same conversion rate of $1 = 10 Honey. The value won't ever change. As for the products, we try to buy high and sell as low as we possibly can. The aim right now is to get users on board so they can see how awesome the experience is.

The reason we can buy higher than market value is because our overhead is lower than sites that pay up front cash. At the moment, we will buy new products out of pocket for you in exchange for your used product + any difference, if any. Eventually, those used products will be available to the market too for a cost lower than market value.

I invite you to try the site out and see for yourself how it works. Again, the value of the Honey never changes and what we buy your product for always remains of the value you sold it for. Whatever you buy, we will fulfill.

I hope that gives you a little bit of insight of how what we do is possible.

Feel free to ask for any clarifications.

-Adam

[argumentum]

You do understand that would be a pyramid scheme, right?

I think this would be true if there is no value added, as in the case of the Fed. But in this case, the model creates a market restriction which can theoretically benefit both parties.

Consider the following case:

1. Consumer A has an Apple and wants an Orange 2. Consumer B has an Orange and wants an Apple

Trading the Apple for the Orange directly (bartering) is clearly more efficient than A and B both trading for dollars and then trading their dollars for the good they want.

Swapidy will benefit specifically for consumers who have one of the devices they are buying and want one of the (new) devices they are selling. They can get a better deal than the full market would allow.

[AnthonyMouse]

>Trading the Apple for the Orange directly (bartering) is clearly more efficient than A and B both trading for dollars and then trading their dollars for the good they want.

This is theoretically true, but it wrongly assumes that the inefficiency is meaningful. We're talking about computers here. It all gets automated anyway. And if the efficiency is utterly trivial then it can't balance any nontrivial amount of currency manipulation.

[argumentum]

Sure, that's why I used the word theoretical myself, but my hunch is that it's not trivial for the reason that it's a really tiny basket of goods we're talking about.

I even think it's not trivial if your market is restricted to say, 25% of the general market. But in this case the restriction is to a tiny percentage of the complete basket of goods, so (as an amateur) my guess is it's significant.