> To write off this activity as a scam or criminal seems to be missing a bigger picture that we don't quite understand yet.

That’s how a lot of scams fly under the radar, _it’s not a scam, you just don’t get it_.

Outside of cryptocurrency you can look at Theranos, it raised close to a billion dollars and was fraud from top to bottom. Within the cryptocurrency world you can look at Tether.

A few hundred million in funding from cryptocurrency investors means nothing when it comes to credibility.

Yeah but they clearly said revenues after the funding, which far eclipse the funding, which moves this far beyond any comparison to Theranos or high flying companies you might actually respect

This is such a Hackernews take "I thought it was gambling and immoral, but now that it has made billions there might be a point".

It can still be gambling and/or a Ponzi schemes.

Adding obfuscation over methods to tap into greed and gambling euphoria does not technical innovation make. Cryptocurrency already attracts people who like to gamble and want to get rich quickly, so this is just docking onto a natural pipeline of marks to deploy their scheme.

I have nothing but disgust for these types of games, even without the block chain veneer. No hate against the players and we know prohibition doesn't work so not calling for a ban, but at least I can contribute a small bit of social stigma against those that profit by hijacking their customers reward functions like this.

> "I thought it was gambling and immoral, but now that it has made billions there might be a point"

That is an inaccurate/misleading summarization of my post. It is a least-charitable interpretation structured to forward your own viewpoint.

When I thought the game was simply gambling I ignored it (and in fact I assumed it was earning high revenue). This financial times article explained that the game is not gambling and instead is something more complex. The mechanic of ownership allowing players to lend in-game assets to free players for the purposes of in-game currency generation is novel to me. The additional fact that the earned in-game currency can be converted to real world cash is not novel but certainly interesting when combined with the former.

Ostensibly, someone can find a sponsor who will lend them in-game assets. They can then apply/increase their skill in playing the game to earn a share of in-game currency. So for zero stake they can earn in-game currency that is convertible to real world cash. That, to me, is NOT gambling.

Another person can invest real-world cash to buy in-game assets. They can then seek out people willing to play the game on their behalf. By finding and retaining the best players they can earn a share of the most in-game currency. That, to me, is close to gambling. It reminds me of horse owners who participate in competitive racing. People gamble on the outcome of races to be sure. But it is a stretch to me to think of the horse owners as gambling. They are investing in the best horses, the best trainers, the best jockeys with the hope that those investments will lead to enough wins to turn a profit.

A growing market, especially on Twitch, are competitive gaming orgs. These orgs seek out the best game players and sign them to contracts. They then turn a profit by leveraging the players success into brand sponsorships. I see a lot of parallels between the mechanisms behind this game and real-world economic activity.

The fact that a pretty prosaic mobile looking game ballooned to such a valuation and attention suggests to me there is something worth being curious about here. It is causing me to think. Apparently it is causing you to turn away in disgust.

> Sky Mavis has acknowledged that Axie relies on new entrants for growth and promised to release new features that will make the game more desirable for people who are not primarily motivated by cashing out their earnings.

Right now, it's difficult to differentiate from a pyramid scheme. There are RNG elements related to breeding, which means the best this game can hope to be compared to is poker, except it has the added layer of cryptocurrency "investment" which taps into the same energy as gambling and pyramid schemes, which I guess makes sense.

Without being mean spirited: do you also see something profound and interesting in GME and other meme stocks? Because in my opinion, just because it got a lot of attention and money doesn't mean that there is something meaningful there. Bernie Madoffs scheme took from the 90s (maybe 70s) to 2008 to implode, bitconnect rose and fell faster.

And as I clarified in another comment, what is causing me to voice disgust is the fact people are using these schemes to get rich off of others. And I think that even if we cannot to anything else, social shunning still has its place as a soft regulatory mechanism. If it people want to go to Vegas, let them have Vegas, if they want to gamble in this, let them gamble, but we can still express our distaste and deny respect. (Not that I think I matter much here, even if people were to follow my lead I'm sure the founders will dry their tears with dollar bills)

Not every person or every culture has the same sets of values around gambling. Not every ethical philosophy thinks of gambling the same way. In many developed countries gambling is legal and regulated in many forms. Governments around the world spend a lot of energy deciding what the lines for regulating gambling is. When I see ethical takes like this, I feel like I'm missing a _lot_ of context. The Islamic world for example sees consumption of alcohol as a sin. Is this a Christian ethical take? What's the difference between markets and gambling in this ethical philosophy? Islamic states see any form of interest as sin after all.

Answering directly to your questions, I don't have any religious background on this, I just see hijacking of our primitive vices for personal profit as immoral and shun-worthy. I think prohibition is bad (just creates Shadow markets) and the main thing to stop is running profitable gambling houses and advertising/incitement - if nobody could make a profit off of it, people would still gamble, but at least it would be intrinsically motivated and you don't get the consolidating and exploitative effects that arise from privatised gambling. Same with all other "sins" - don't stop the sin, stop the profiteering and the exploitation. The sins are fine and fun

Hijacking of our primitive vices, isn't that the basis for most economic activity? The food industry, television/movie industry, all of social media including the site we're on right now, the list goes on indefinitely.

Normal video games without a crypto element do this as well. I currently have real money tokens in at least 4 of the most popular games, none of which I can ever get anything back from except in game cosmetics. But even games like Stardew Valley that wouldn't dream of taking extra money from you are tapping into our vice centers to keep us playing.

As someone deep into video games to me this is just an evolution of world of warcraft gold, or what steam has going on with their in game items and trading cards. I can exchange wow gold/steam items for real money, which blizzard or valve takes a generous % of. I can then only use that money to buy blizzard/steam products from their respective stores. People grind for countless hours in games even for these relatively worthless (when compared to crypto/nfts) currencies. Hell people spend countless hours grinding for in game currencies that will never have any real world value at all. Mostly because it can be wildly fun to do.

I feel like a whole lot of the hatred towards the crypto space will go down in history as an old man yells at cloud moment.

Well, yes,you have rediscovered a core theme of criticism against the capitalist, consumerist mode of production anarchists and other leftists tend to raise, together with commodification. There is a coherent view that most AAA video games are skinner boxes aimed at extracting cash and Indie Games being closer to the "original" idea of them, and there are real discussions to be had about grinding on that context as a worthwhile escapism vs. a symptom of a bigger problem vs. a tool to build emotional investment that will keep you subscribing.

Don't get me wrong, I'm the old man yelling at the crypto cloud as well, but in this case I'm the old man yelling at business foundations of questionable morality. Providing healthy food, fodder for emotional and personal comfort and growth or shelter has very different business models and foundations from providing fast food/sweets, skinner Box Dopamine drips or artificially hyped status Symbols.

I agree with you entirely. Our society is very unhealthy in it's current form. But the fact is unless we want the economy to go into complete shambles (which we very well may need to happen to survive what's coming) we can't stop doing what we're doing. The difference I see with something like Axie, if done properly, is that instead of the big daddy corporation taking all the money from on high, there's potential for the consumer to partake in the success of the game.

As an example I play a bunch of league of legends currently. During the pandemic it's been a godsend for spending time with my friends. We've all bought multiple skins during this time which has amounted to probably a couple of hundred dollars between all of us. You can also earn random skins, but because typically people don't play most champions these random skins often just sit there wasted. What if instead those random skins could be sold or traded to other players? Take it one step further, what if there were unique skins that only 1 player could have at a time? I could see something like that selling for thousands of dollars. It creates a load of economic activity at the cost of absolutely nothing. We're all already using the systems in droves, crypto/nfts are just a way to have some form of actual ownership.

It's a brilliant concept, and the moral argument against it really is also moral argument against everything already in place in most of the biggest industries around.

It feels like you are agreeing with me only to go back to defending the thing you call sick? My whole point is that we might not be able to change the system, but we can at least refuse to accept it.

Other points touching on ideas you raise:

1. If I understand correctly, has a 20% premine system of AXS that represents ownership of the platform. Even if it didn't have a premine, this is the same as having a public corporation owning the platform. If Axie was a co-op where every player had 1 vote and would share equally in the profits, it'd be a bit differen, but otherwise, you can just buy tencent share if you want t participate in the success of the game 2. You are describing any game with tradeable assets, e.g. Pokemon. Right now, millionaires are making more money with pokemon unboxing (or maybe that fad died already), and similarly whoever has the best starting position will cash in on Axie...as long as enough people FOMO in 3. Which goes back to the dual fundamental sicknesses of capital tendency to concentrate and corrupt if left unchecked and profiting off of these easily exploited human desires without providing value in return. If you enjoy playing a game, you will pay for a game. That's fine. But we call artificial sparsity, spaced random rewards etc. dark patterns for a reason. Acting like the business model of e.g. brother's a tale of two sons and Axie are the same is disingenuous (and DotA existed without needing a company running the skinner Box...)

> Well, yes,you have rediscovered a core theme of criticism against the capitalist, consumerist mode of production anarchists and other leftists tend to raise, together with commodification.

I think this is a much more fruitful (if ultimately tautological due to its very definition) form of argument; you're a modern socialist and modern socialist mores drive your criticism. That brings up two questions for me:

1. What's the point of bothering with commenting or thinking about cryptocurrency at all? Cryptocurrency is all about a belief in some market, which socialists reject. It would be like a market libertarian criticizing the Soviet Union on the basis of not having a market; ultimately fruitless.

2. Do you voice similar opinions on all capitalist issues in which marketing and commodification are present? It would seem from a perspective of utility that cryptocurrency is probably one of the least harmful examples of this phenomenon. Do we disagree on our utility metric? Does utility not factor into your ethical judgement (e.g. are you a virtue ethicist)?

First of all, it's simplistic to say socialists reject markets see

https://en.m.wikipedia.org/wiki/Libertarian_socialism

https://en.m.wikipedia.org/wiki/Market_socialism

>Early models of market socialism trace their roots to the work of Adam Smith and the theories of classical economics, which consisted of proposals for co-operative enterprises operating in a free-market economy.

Second, just because you reject something still means you are allowed to present arguments against it. Otherwise only those who hold crypto would be allowed to think or criticize it. You aren't giving arguments against the critiques presented right now, you are just going "ah, you are a socialist, that's why". If you disagree with the critique I'd love to hear your reasoning, but what does labelling and rejecting add?

Third, yes, I do in fact. Marketing, exploitation and hostile business practices are my main problems with the current system, I don't have a moral problem with property, capital etc. If we can configure a capitalist system to be non-exploitative I'm down. One way (not realisable, semi-joking) could be to impose a hard cap on individual wealth (say 100 million, or a multiple of the median to make it timeless) with the excess poured into a UBI (land would need its own treatment but I'm just being funny right now). This would even out power dynamics, avoid dynasties and allow market forces to take hold. We can add a form of new-game-plus for those that need extra motivation, if you build up more wealth and hit 500mil, 1bn , etc you get a progressively more impressive Roman-style triumph as recognition - you still don't get to keep it though.

Fourth, you are making a nonsequitur going to utility now without taking the time to define terms. I don't think of myself as a virtue ethicist nor a utilitarian, but I do think there are some things people want that a utilitarian would still say has negative utility. Is selling crack, fixing up people to opiods or drawing them into cults providing positive utility for you? How about adding extra sugar, salt, MSG and fat to food to make it more palatable with cheaper ingredients, and possibly more unhealthy and addictive? Is it positive utility to use marketing to create a perceived problem and then selling the solution?

> First of all, it's simplistic to say socialists reject markets see

Yes I am familiar with this fact. That's why I said "modern socialist mores" in my above post, which was admittedly probably doing too much work in my head and not explaining enough. I find that libertarian socialists, market socialists, minarchists, and market anarchists are not really popular leftist positions anymore. Most socialist spaces I encounter these days mostly consider communism, socialism, anarcho-communism, or anarcho-socialism.

> Second, just because you reject something still means you are allowed to present arguments against it. Otherwise only those who hold crypto would be allowed to think or criticize it. You aren't giving arguments against the critiques presented right now, you are just going "ah, you are a socialist, that's why". If you disagree with the critique I'd love to hear your reasoning, but what does labelling and rejecting add?

Imagine if someone in the comments critiques the West's decadence and ascribes it to the West's consumption of pork. To many ethical frameworks, the reasoning would be odd; why pork of all things? In Islamic ethics, however, that is in fact a reasonable line of criticism. Likewise your positions seemed to reject a lot of things taken for granted in everyday life in many developed countries which is why your remark about being a socialist makes more sense. I'm not rejecting socialism; knowing you're a socialist makes your critique more understandable.

> Is selling crack, fixing up people to opiods or drawing them into cults providing positive utility for you? How about adding extra sugar, salt, MSG and fat to food to make it more palatable with cheaper ingredients, and possibly more unhealthy and addictive? Is it positive utility to use marketing to create a perceived problem and then selling the solution?

I don't believe it's the role of the State to police any but the most deleterious mores. I believe that humans can form social mores against the excesses of vices and that having the State enforce social mores often results in more negative than positive externalities. When there's a large collective action problem, say environmentalism, I _do_ think in terms of utility, which is why I was asking about utility. I largely think the negative utility imposed by cryptocurrency scams upon the environment is far outweighed by the negative utility of other things so, much like the renter that uses more water than they should because their management pays for water, I consider it one of the many tiny sources of negative utility out there that is only worth tackling once bigger targets have been tackled.

Thanks for the clarifications on your first two points. On the last:

You are using very wavy forms of utility. How do you define utility? I was thinking on the utility of the individual, asking about whether something like getting lost in gambling addiction after someone caught you in their funnel is truly positive utility because you "want" it.

In the same vein as your 2nd point, I'm also gonna guess you are more of a libertarian/minarchich bent because of this because while in my experience statist tend to oversimplify and wishful-think the impact of the state and anarchists tend to oversimplify and wishful-think the willingness and ableness of a group to self-organise in an anarchist way, libertarians in the US style/minarchists tend to oversimplify the question of self determinism and have inconsistent thought on what exactly the role of the state should be (it should exist because otherwise you can't have private property, but everything else...) and don't consistently acknowledge predatory behaviour that preys on human vices exists and works (AGAIN: I don't want to police the vices, I want to curtail profits on it. Self-organised vices without additional motivators are fine with me).

I also find it interesting that you claim you think term of utility and externality on collective action problems but then don't consider price of action - we don't lose anything big with crypto right now, but we would gain at least a finlands worth of energy to blow on other things ( https://www.nytimes.com/interactive/2021/09/03/climate/bitco... ).

You can think that gambling is moral. You can think that gambling is immoral. To think that gambling is immoral unless it's earning a lot of money is... something.

I mean sure but that's not what GP is saying. GP is purely laying into gambling by itself.

> I have nothing but disgust for these types of games, even without the block chain veneer

That's where my question arises.

I'm specifically laying into people getting rich off of other people gambling and making a business out of it. If a group of friends wants to play poker, or if the Axie platform was a co-op owned by all of the players (and no 20% dev stake like most premined cryptocurrencies) I'd say "eh, it's their choice". But making money off of hooking into and pushing our vices is something I personally disagree with.

Sure but what about the folks that run casinos, pachinko parlors, mahjongg dens, card clubs, horse race betting owners, claw machine owners, etc, etc. There's a _lot_ of gambling around the world and it's the owners' job to market these gambling houses. Why are these crypto scams so deleterious when there's probably an order of magnitude more people gambling their money away in more traditional gambling houses designed to keep you inside, fed, and spending money for as long as possible? Is your position that all gambling like this should be run by the state?

By the state or by private individuals without profiting and without advertising. I'm also in support of banning loot boxes in commercial games like we've seen in some European countries.

Again, the problem isn't gambling. The problem is people making money off of pushing people to gamble more than they'd do naturally.

Are you talking about reggieband or igorkraw? I was referring to the former.

Igorkraw

> To write off this activity as a scam or criminal seems to be missing a bigger picture that we don't quite understand yet.

The linked article is literally about the meltdown of the game's unsustainable economy, so maybe the critics understood it better than you're suggesting.

The entire Axie Infinity economic model only worked with an ever-increasing number of new players entering the economy. As player growth slows, the model breaks down.

This is why people are comparing it to an MLM or other scheme that only works as long as you continue to find more and more people to pull into the system.

The money must come from somewhere. If old players are cashing out money put in by new players, the game is up as soon as the supply of new players dries up.

> It really makes me reconsider the group-think on hacker news.

This is pretty bad when it comes to crypto topics. A lot of the crypto ecosystem is toxic and gross. Schemes, scams, marketing fluff, and meme bro attitudes galore. BUT, if you can bear to pay attention and cut through the noise, there are some pretty incredible innovations occurring in crypto, gaming, and defi. HN is very dismissive on these topics. It feels to me this community dates itself when crypto topics come up, reminding me more of my grandma at thanksgiving than young innovative technophiles.

> HN is very dismissive on these topics.

In general, when ever crypto topics come up, the pro-crypto side tends to do a pretty terrible job of establishing that there are "some pretty incredible innovations occurring in crypto, gaming, and defi."

Perhaps you could list some and change our minds?

I just saw on Twitter how some one is minting NFTs using the art of a deceased artist and their family is scrambling to figure out how to stop it. There are a lot of shitty things happening in this space.

I'm not involved in nor have I ever bought anything crypto related. But I'll say this for it, it's the most interesting new tech to hit the internet in the past couple decades.

Everything else has been pretty incremental over that time period, crypto is something really new and I suspect that's why its adherents are so obsessed by it.

Bigger than VR/AR, IoT, AI or smartphones? Chaum was talking about digital currency around the dawn of the web so I’m not sure you could say there’s been anything much less incremental there.

The thing to remember is that by now we’ve had over a decade of people making very big, obviously unfounded claims and failing to deliver much of anything. The people in that space trying to recoup their investment even felt the need to rebrand as “web3” to shake the resulting negative reputation. The obsession makes a lot of sense simply as recognition that, having failed to develop public demand, the only way for anyone involved to maintain their current valuation is by selling the possibility of future usefulness to new buyers.

I suppose I should clarify what I mean. I mean crypto is maybe the most interesting new "protocol" type thing to use the internet in a new and different way.

We used to have lots of protocols that did different things but nowadays a lot of it has mostly been subsumed into http and we've been making and serving incrementally better (or worse depending on your perspective) websites for a couple decades plus now. If you talk to someone about the internet now, the default assumption is WWW, it's that dominant.

The last technology I think I would say was really different, interesting and widely used over the net is probably bittorrent? But even there http sites have gradually chipped away at a lot of the use cases it had.

Crypto is the first really new, interesting and actually popular "protocol" type thing to hit the internet since maybe bittorrent?

Personally I wouldn't put a penny into it because I really don't understand it, BUT if you told me in another 10 years crypto had significantly changed the world I wouldn't be surprised either, internet protocols have the power to do that, HTTP did.

VR was pretty hyped a few years ago.

Edit: Also, what exciting things are you seeing? Almost everything I see is either proposing smart contracts for intractable problems, proposing defi for intractable problems or is a straight up scam.

> HN is very dismissive on these topics

The HN community is very dismissive, embraces feverishly, doesn't care about, [the rest of the stances] "crypto". There are many diverse opinions in the minds of the commenters here and this type of comment, while I've seen it's like more commonly in recent times, is clearly an erroneous over generalization.

If your developer-first finance platform fails to capture the interest of developers, I daresay you've built the wrong product.

I imagine ATM fees on casino floors are pretty lucrative.

Skimming a percentage off every transaction to make a profit is what casinos do. Of course it's possible to make money this way. It's not gambling when you're the casino. It's still gambling for everyone else.

Just because something makes a lot of money doesn't make it ethical.

It's way more ethical for people across the world, primarily in 3rd world countries, to be able to share in the success of a company via its tokens than just being mined for data so some asshole in San Francisco can be paid 10 million dollars a month in rent.

There is no “success of the company that you can share in”.

This is a zero sum game: as long as more people buy tokens to get in the game, then it continue going up, and every one feels like they are getting richer. But anyone selling their tokens is taking money out of the system, from all the players. If everyone sell their tokens, there will be exactly the same amount of money that comes out than that went in, just redistributed differently amongst the players, some will lose some will win.

That’s what makes it a Ponzi scheme. The real winners here are the company behind Axie and the people like the guy from the article that just take money out of the system (from other players) on a regular basis, they are guaranteed to get more out. That's where the real success of the company happens, and you have no mechanism to get a share of that success unless you are an actual investor in $ of that company.

In that story, there are no external consumers that are willingly paying money to the company in exchange for some good or service, that would make the players richer.

Investors also buy tokens because they think it will go up, not only people playing the game. Yes, people will lose if it goes down, but that's what it's like with everything. Some players will win, some players will lose, some investors will win, some investors will lose. There is absolutely nothing wrong with this. This is how the world works. If people think the project has value then it will go up in value and if they don't then it won't. I don't understand why people make it so complicated and try to imply that there's anything wrong with this.

Because that's actually not how the world works.

With traditional company, some consumers are paying it for a service. Apple is making 300B$ a year because a lot of people are willing to partake large amount of money in exchange for some good that they (think they) need such as a laptop or a phone. The consumers have no expectation of getting that money back later, it's a trade.

If you think Apple is a good company and will be more successful in the future, you can decide to invest it in, and you buy a share of that company to some other investor against cash. In theory, it's possible for every single investor of Apple to make more money than what they paid for through dividends: As long as Apple keeps making products that people are willing to pay for, it will make money, and investors get a chunk of that money. Here value is created by work happening in the entire value chain needed to produce the good. Because if you had to make your laptop yourself with a pickaxe, it would be quite inconvenient.

Also, if everyone suddenly decides to dump all their Apple stock, it will go down a lot, but not to zero, because the company as an actual intrisinc value: they have hundreds of billions of $ in cash in their war chest, have a lot of valuable physical things, and will continue to make hundreds of billions every year no matter what people on the stock market think.

Overall it's not a zero sum game, because consumers are providing an external source of cash to the investors.

Now, the more a stock is overbought, the closer it becomes to zero sum. Tesla for example, if it fails to realise the bright future that everyone is betting on, then it will get ugly as it's current stock value is disconnected from it's current intrinsinc value.

Axie is very different, the price of the token only rise because of investors (here players), there is no external source of money going in that could make everyone richer. It's a bunch of people sitting in circle around a pile of cash with the promise that they will be able to take a random piece of the pile later on. And if you want to be able to sit with them, you first have to put cash on the pile yourself. Looking at the pile of cash getting bigger and bigger is exciting, but you will have to fight everyone else to get more than you put in. Oh and while you are sitting there waiting for the pile to get bigger, the people that organise the event are shovelling money out.

All (most?) crypto games today are zero sum. However it's possible in the future that they may not be. I am thinking specifically about the ones that brand themselves as "metaverse". If the game in itself is interesting enough that people are engaging with it for a long time, then companies will want to start advertising in it, and if shares of that revenue are reinvested in the in-game economy and not just entirely taken by the company behind the game, that could be an example of external influx of money.

>Axie is very different, the price of the token only rise because of investors (here players)

There are players and investors who actually only buy the token and don't play the game. These are different people. Here the "external" source of money for players would be the investors who don't play the game and for investors it would be players playing the game because they think it's fun. In Axie's case that's probably a minority of people, but that's obviously not the case for most games, you only need to look at games like Genshin Impact to see that people are willing to spend tons of money on good games just because they want to spend money on it.

So yes, in this particular case it's a bad business, and I agree that the same is true for most other crypto games right now, but there's zero reason for it to remain the case in the future. Nothing about the setup fundamentally prevents people from spending real money on real games, and from the token's value to increase as a result, like any normal company.

> Here the "external" source of money for players would be the investors who don't play the game and for investors it would be players playing the game because they think it's fun

They are all part of the same system, both the investor and the players buy or get some AXS, and both hope that AXS will go higher so they can make actual $ later on. None of them are putting $ in the system that they do not want to get back later on, which is very different from someone buying an iPhone: they know Apple will never give them that money back. So it's still a 0 sum game, no matter if some people are playing and others aren't.

> Nothing about the setup fundamentally prevents people from spending real money on real games, and from the token's value to increase as a result, like any normal company.

I agree, that's the last part of my comment. But mechanisms need to be put in place for people to spend (and not invest) actual money in the ecosystem, say through advertising, or buying things (that you cannot resell later at a higher value), and the profit needs to be in part redistributed to the community. That's not happening today in Axie, maybe it will eventually, but today it is indeed a Ponzi scheme.

Sorry but I just disagree. A game that is free to play and where every item is bought and can be sold later for a higher price doesn't stop being fun and engaging just because people can sell what they bought when they feel like they don't wanna play anymore. The idea that there absolutely need to be people who are buying things without the intent of ever selling them isn't what would stop from making it a "ponzi scheme". Like I said, people sharing in the success (and failure) of a company's valuation is not a ponzi scheme.

>and the profit needs to be in part redistributed to the community.

This already happens through the token's increase in value. The notion that this redistribution can ONLY happen if there are money sinks in the system is misguided and old fashioned.

How is the token increasing in value outside of people speculating on it? The only money entering the system is investors and fees drain that out of the system. Without people spending, not investing, the system is doomed to hurt people who are left holding tokens when everyone else has cashed out.

>The only money entering the system is investors and fees drain that out of the system

? Fees are generally extremely small. All the money that enters the system is from investors and from players. The fees are minimal and have almost no effect on this.

>Without people spending, not investing,

Those are the same thing because both players and investors can cash each other's money out. There's literally no distinction between both things.

>the system is doomed to hurt people who are left holding tokens when everyone else has cashed out.

That's the case with every stock that currently exists. When a company fails there will be bag holders who lost a lot of money. Ideally the company doesn't fail and keeps making games forever.

> All the money that enters the system is from investors and from players.

> Those are the same thing because both players and investors can cash each other's money out. There's literally no distinction between both things.

So the only people putting money into the system are investors? Like I said.

> That's the case with every stock that currently exists. When a company fails there will be bag holders who lost a lot of money. Ideally the company doesn't fail and keeps making games forever.

If you hold a share of a company, you get dividends from the profits of company separate from the market. Even if nobody wants to buy your stock it still has value.

So what you're trying to tell me is that trickle-down economics works in the context of an app?

Ponzi schemes don't become ethical when they temporarily enrich people who are lower on the economic totem pole. I would argue they actually become less ethical.

People sharing in the success of a new company is not a ponzi scheme. If a company is started from nothing, is providing value, and early adopters are paid with tokens as a way to jump start the business the tokens are simply being used to extract future value into the present. In some cases there's no actual value in the future because the product isn't good, but that doesn't make it a ponzi scheme, just a poor business.

"Providing value" is doing some serious heavy lifting in that sentence - MLM/Ponzi schemes can definitely argue they "provide value" and its telling that its your metric for not being a con.

In a traditional ponzi scheme many people get paid, until the last people are left holding the bag.

As a video game maker myself I'd say that video games generally provide value. If this particular video game provides as much value as its valued at is not for me to decide, but for the people who play it and invest in it.

What if the only value is speculation or rent seeking on people that are poor? It’s already the case that the pay to earn economy crashed deeply. You keep saying value but without saying what that value actually is. Until a Ponzi scheme crashes everyone in it thinks it’s providing value after all.

As a videogame maker myself I’d rather give my games away for free than setup the kind of economic trap Axie has.

Axie may have done it wrong, but the concept of in game currency has been shown to be wildly lucrative in the past. Let's take Valve as an example. You get a CS:GO knife you're sometimes able to sell that for a large chunk of money. Valve takes a gigantic cut of any of those transactions, and then the money can only be used to buy further products from them. Is that more ethical than what Axie is doing? Wouldn't it be neat if instead of "valve fun bucks" it were real world money that players could pay their rent with?

If someone does this correctly it could end up being a very good thing IMO.

Stuff being wildly lucrative isn’t necessarily a great benchmark. On paper at least Axie has been wildly lucrative. Being wildly lucrative for some people who can pay their rent doesn’t make it moral either. As my sibling comment notes there’s also no free lunch and the lucrative for some people part has negatives for the rest of the player base.

That said I have nothing against player made cosmetics being sold but there are much more obviously equitable ways of doing that.

And then the elephant in the room that cosmetics are not game affecting and there is utterly no reason to use a blockchain for any of this.

Co-opting an existing player base to inject capitalism in it has flooded the market with bots, trade scams, and constant annoying spam "hey do you still want those headphones? how about that group?"

The only people who benefit from the CS:GO knives are the ones who are extremely lucky or constantly performing economic activity at the expense of the community, its not good.

"As a tupperware party host myself, I'd say that tupperware generally provides value. If this particular piece of plastic provides as much value as it's valued isn't for me to decide, but the friends and family I invite to the party."

Doesn't quite have the same ring to it, does it?

It takes an extraordinary level of ignorance about basic elements of how business works (which I am sure the investors in this company have in spades) to think this makes sense.

In order for someone to make money for something, there has to be an activity that generates a cashflow. There is no cash flow being generated, there is no outside money, what value are these people creating for other people? If you are playing a game to make money, you have to be providing some kind of value. So far, this company has convinced people to put money in, the rest of the money is probably coming from investors...there is no other money (and btw, the people playing the game are clearly much smarter than Andressen & Partners, they are taking out whatever isn't nailed down and making a swift exit).

If you look at poker, it is obvious why some people are paid to play that game: they provide liquidity, they provide someone to gamble with, they provide the capital to take risk. It is the same with a bookmaker. This example has none of these characteristics because there is no outside money (the quote from a partner at Andressen's firm is incredible, I worked in fund management, I have seen some incompetent people, people who are truly clueless...what we are seeing in VC is unlike anything that has occurred in financial culture since the 20s).

This reminds me of Football Index: the details of this are complex but they essentially paid people to play a game, there was no outside money, investors didn't understand this, management didn't fully understand this, they went bankrupt earlier this year taking down tens of millions in client money (no-one who plays this games understand that they are investing in an OTC product secured against the developer, it is nothing to do with the underlying game).

The outside money is the value people are willing to pay for in game stuff. If it's a good enough / popular enough game that ends up being billions of dollars. Ask Riot games how well you can do with just cosmetic items that do absolutely nothing but make your character model slightly different. Their net worth is hovering around 25 billion these days, mostly off of things you assume can provide no cash flow.

There's 20 search results on this page at this moment for ponzi. HN missed the boat hard on this and there's a lot of sour grapes.

Technical folks have left the marketing chavs alone and they've taken a concept and made it something that we hate. We hate it so much we can't see its potential.

If a bunch of people put their money into a constrained system and the price goes up that doesn't automatically make it a ponzi scheme.

Edit: 28 search results now

the attraction is the skyrocketing value as more people join in for fear of missing out - but once the growth levels off on one particular token, and it’s no longer the fastest growing asset, then the top of the pyramid cashes out and moves on

people are calling it out because we’ve literally seen it over and over again