I'll suggest that the difference isn't that people know the details of how for example checks clear, few non-experts learn all the details, BUT virtually everyone knows where to go if there is a problem (bank branch). Most non-experts at this point in crypto currency would have no idea where to even go to investigate a problem.
If expensive ugly paintings are not a Ponzi scheme, then cryptocurrencies are not a Ponzi scheme.
Even if all of those beliefs above were true, it still wouldn't be a Ponzi scheme. As someone else posted in here, Ponzi Scheme has a fairly specific definition which "Gold" doesn't meet.
Even if all of those beliefs above were true, it still wouldn't be a Ponzi scheme. As someone else posted in here, Ponzi Scheme has a fairly specific definition which "[Cryptocurrency]" doesn't meet.
On the other hand, it is not likely you can deploy some magic oil machine in your closet with almost 0 investments and start producing $5c / barrel oil.
There's no way an economy can be defined by something of no practical value.
[1] https://ethereum.stackexchange.com/questions/3/what-is-meant...
Bitcoin matches this definition exactly since pumping up the currency is not connected to any real world productive activity.
Ethereum has some theoretical practical uses but most of the ICO nonsense is pure Ponzi.
Defining a Ponzi can be difficult because in order for something to truly be a Ponzi scheme it must be engaged in with fraudulent intent.
Really stupid people who "invest" in really stupid things and waste their money on useless stupid activity don't count as a Ponzi because they don't have fraudulent intent. They are just really stupid.
Whatever participants in digital currencies are not in the first category are in the second category so it isn't much to be excited about.
You are buying the currency, once you receive it the contract with the coin's creators is fulfilled, you are not an investor, you do not own any shares of any company. It is a one-way transaction.
Perhaps you meant pyramid scheme, of which ICOs are also not an example.
The way to tell your understanding is wrong is that it would describe every currency, and every possible asset (land, valuables, etc).
... I get the other advantages to Ethereum, but it's not Bitcoin where there is actually a distributed number of people managing it.
Are you sure you're talking about Ethereum, and not Ripple? The vast majority of ether is not controlled by one company.
It is quite rare in history that a fiat currency was put in place, that didn't have a corresponding broad based tax in order to enforce its use and give the issuer, usually a sovereign or government, an advantage in being the source of the fiat.
You can redeem them for the privilege of operating a legally distinct incorporated business entity in the US.
At a strictly technical level, I believe it may still be possible to live your life entirely lawfully, without being taxed, but the amount of legal analysis necessary to work out exactly how that may be accomplished is beyond me. It's far easier to just earn enough dollars, and then pay up.
(Note that relying on Supreme Court opinions will not get you to anywhere you might want to be if the IRS decides you need to pay them.)
You have a right to vote, so levying a tax upon the act of voting is not permissible. Obviously, if it is a right, it means that even someone with zero money should be able to do it, and you can't pay a tax if you have zero money. The tax prevents poor people from fully exercising their rights.
As such, taxes that appear to be on the exercise of a right are usually worded such that they are actually excises on a legal privilege that is suspiciously similar, or upon an accessory privilege, without which the exercise of the right is largely pointless.
You can build as many steel mills as you want on your own property. But doing so is pointless if you cannot transport the steel over public roads or sell it to customers in the public marketplace, unless you have a great need for vast quantities of steel on your own property. There are quite a lot of foil-hat-wearers out there that try to tease out the line of separation between taxable privileges and untaxable rights, but the reality is that none of their opinions hold any sway unless they have millions of dollars to spend on lawyers and lobbyists, or millions of supporters to march on the capital. As such, a lot of "Sovereign Citizen" propaganda revolves around the insane idea that a state with near unlimited power may be compelled to obey its own laws, even when doing so would be contrary to its own interests.
This is the same phenomenon that results in your tabletop RPG's resident rules lawyer getting their characters killed off. For any obscure rule they can argue to their own advantage, the GM can always just roll behind a screen and say, "Oh dear, the goblin scored a critical hit. What an unlucky occurrence. Your character dies. Again."
For instance, the Supreme Court has also ruled that it is permissible to prevent someone from growing a crop on their own property, never to be exported off of that property, because that satisfies some demand that would otherwise impact prices in interstate commerce. Essentially, the state said it can prevent you from growing corn in your garden, because that means you won't buy as much corn--which could be imported from another state--at the grocery store. In order for that ruling to be consistent with the poll tax opinion, the US cannot recognize that engaging in commerce and providing for your own livelihood is a natural right. Because that would mean it couldn't be taxed, and the government needs those taxes more than you need to buy your own food and shelter.
Anyway, the point I'm trying to make is that many of the things you may call "legal right" are probably just legal privileges, and that if something is taxed, the government does not recognize that you have a right to have it or do it. This is disturbing to some people, because it provides a practical test to unequivocally show that they have far fewer rights recognized by law than they believe themselves to have.
If the power has shifted to an elite who controls the great majority of the currency, and has the power to withdraw/dump coins (basicaly influencing the supply side of the market, and control the value) - I'm pretty sure there are people/organizations who invested into such positions - and have the power to simulate value and draw people into this gold rush...
Where is the line drawn between this and a scam/fraud?
Is it when the control party withdraws all the value from it and dumps it?
For as long as everything is being valued in a positive way, everything is fine?