Re:Bitcoin pyramid schemes wreak havoc on Brazil's 'New Egypt'
by skybrian on Saturday January 22, 2022 @04:00PM
(#30040766)
Yes, "ponzi scheme" is over-used, though it seems to apply to the schemes in Brazil.
Bitcoin is more like infrastructure that people can use to play pump-and-dump games. We've seen with meme stocks (and previously, penny stocks) that just about any financial asset can be used for these games. It doesn't need to be intentionally set up for that. It's structural in having a limited supply, a volatile price, and continuous trading. Just add hype, which serves as coordination among the players about which financial asset to use to play the game.
One difference is that a cryptocurrency's value can come primarily though not exclusively from its usefulness for playing pump-and-dump games. High fees and volatility deter most usage for payments, and there is no income stream other than new investors buying in.
Bitcoin is more like infrastructure that people can use to play pump-and-dump games. We've seen with meme stocks (and previously, penny stocks) that just about any financial asset can be used for these games. It doesn't need to be intentionally set up for that. It's structural in having a limited supply, a volatile price, and continuous trading. Just add hype, which serves as coordination among the players about which financial asset to use to play the game.
One difference is that a cryptocurrency's value can come primarily though not exclusively from its usefulness for playing pump-and-dump games. High fees and volatility deter most usage for payments, and there is no income stream other than new investors buying in.