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0 pointsAJRF8y ago0 comments

He is totally right about ICO's though. They are essentially Ponzi schemes as investors think the coins have value and that their initial investment is generating more value, but that is not what is happening.

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Jabanga8y ago

None of the token sales I've seen are ponzi schemes. "Ponzi scheme" seems to be the buzzword used to describe any irrational or bubbly investment. It's incorrect usage of the term.

AJRFOP8y ago

You are categorically wrong about this.

Ponzi schemes are financial frauds where, under the promise of high profits, users put their money, recovering their investment and interests only if enough users after them continue to invest money.

Further to this, its qualatively provable, as you can look at the contracts and actually class the type of Ponzi scheme they are.

* https://ftalphaville.ft.com/2017/06/01/2189634/its-not-just-... https://stratechery.com/2017/tulips-myths-and-cryptocurrenci... * https://arxiv.org/pdf/1703.03779.pdf

dgacmu8y ago

The wikipedia article on Ponzi Schemes draws a fairly subtle distinction between a classical Ponzi schemes, economic bubbles, and pump-and-dump schemes:

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

Most ICOs seem more like pump-and-dump by that nomenclature, than like true Ponzi schemes, in which the Ponzi operator is directly involved in all of the transactions in and out of the system.

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

Jabanga8y ago

You're quoting from the Birch-Kaminska circle, which has been bashing cryptocurrency since 2012.

A ponzi scheme is where people pay a fee to join a scheme where members are guaranteed a payment that comes out of the membership fees paid by members that join after them.

No token sale has given out payments, let alone guaranteed one. A speculative price gain is not a "ponzi scheme".

AJRFOP8y ago

So tell me, what is the goal of an ICO? And by extension, how do you ensure an ICO is successful?

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Jabanga8y ago

None of the token sales I've seen are ponzi schemes. "Ponzi scheme" seems to be the buzzword used to describe any irrational or bubbly investment. It's incorrect usage of the term.

AJRFOP8y ago

You are categorically wrong about this.

Ponzi schemes are financial frauds where, under the promise of high profits, users put their money, recovering their investment and interests only if enough users after them continue to invest money.

Further to this, its qualatively provable, as you can look at the contracts and actually class the type of Ponzi scheme they are.

* https://ftalphaville.ft.com/2017/06/01/2189634/its-not-just-... https://stratechery.com/2017/tulips-myths-and-cryptocurrenci... * https://arxiv.org/pdf/1703.03779.pdf

dgacmu8y ago

The wikipedia article on Ponzi Schemes draws a fairly subtle distinction between a classical Ponzi schemes, economic bubbles, and pump-and-dump schemes:

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

Most ICOs seem more like pump-and-dump by that nomenclature, than like true Ponzi schemes, in which the Ponzi operator is directly involved in all of the transactions in and out of the system.

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

Jabanga8y ago

You're quoting from the Birch-Kaminska circle, which has been bashing cryptocurrency since 2012.

A ponzi scheme is where people pay a fee to join a scheme where members are guaranteed a payment that comes out of the membership fees paid by members that join after them.

No token sale has given out payments, let alone guaranteed one. A speculative price gain is not a "ponzi scheme".

AJRFOP8y ago

So tell me, what is the goal of an ICO? And by extension, how do you ensure an ICO is successful?

1 more reply

j / k navigate · click thread line to collapse