Sure, there's fraudlent accounting, and wash trading, and other bullshit, but that's all just the some and mirrors that allows the ponzi scheme to work.

a ponzi scheme reports a profit, and pays out that profit to early investors. (the payout is actually later investors inflow.)

the only one of the ones you mentioned that is actually a ponzi scheme is the "delivering a yield." its the yield delivery, aka dividend, that makes it a ponzi scheme, not just fraudulently running away with the money. the scheme works because people get paid out regularly, and have no reason to believe their money isnt working for them.

exactly how crypto works.

That is not a ponzi scheme. The selling of the asset to the next sucker, and the price going up, and each person in line getting to shave some profit off the next person is not a ponzi scheme. (It's also exactly how non dividend end paying stocks work. The stock is only worth what the next person is willing to pay.) Youve described a pump and dump.

A ponzi scheme has a mechanism to give a fraudulent "RETURN" to investors that HOLD. That is the definition.

Everyone is now using ponzi to mean any sort of scheme including ponzi, pump and dump, etc. But thats not what the word ponzi actually means. And when you say things like "by definition" we need to stick to the actual definition.

""" You can now earn yield on your crypto purchases and deposits, as well as your fiat balances, in your FTX app! By opting in and participating in staking your supported assets in your FTX account, you’ll be eligible to earn up to 8% APY on your assets. """

How does one provide 8% yield on BTC I have no idea.

To me, FTX is a classic Ponzi scheme according to the most uncontroversial definitions of "Ponzi scheme".

Europe's hashrate could disappear overnight and barely anyone would notice.

Is there any country that's dependent on crypto mining? I think you may have meant the inverse--a country that crypto mining isn't dependent on (like it was on China... until China banned it a few years ago).

I'm not mining, I'm heating my winter swimming pool with this ASIC based heating elements!

Tax any externalities and let the problem solve itself. Yes, you might end up with some heated sidewalks or other conspicuous consumption, but at least you end up with resources that can counter the problem.

Why not simply prohibit proof-of-work coins and be done with it? There are so many disadvantages and no benefits, it seems.

It sounds good to perpetuate the "but Amazon.com had extra capacity they could sell" but it's not true.

With that definition, AWS is a startup. So was the iPhone. Both invented their respective markets, and had to grow quickly to do it. If either of them had needed to raise money from VCs, smart VCs would’ve invested. But they didn’t need to raise capital, since they were already a successful company.

But, when the gold rush is over, the shovel-seller may have to do big layoffs.

https://www.cnbc.com/2022/11/14/spacex-just-bought-a-big-ad-...

Your definition for "a bunch" is a bit questionable, but good on you for posting the source.

The ad campaign SpaceX is buying to promote Starlink is called a Twitter “takeover.” When a company buys one of these packages, they typically spend upwards of $250,000 to put their brand on top of the main Twitter timeline for a full day, according to one current and one former Twitter employee who asked to remain unnamed because they were not authorized to speak on behalf of the company.

Which means 160k spent is actually well below typical deal and these deals are pretty normal for Twitter. So one may actually be worried that maybe SpaceX got a deep discount or something.

I think if it had been $500k or $1M I would've called it a bunch, but $160k seems low.

-1- That's right M is for a thousand, because M is a thousand using Roman Numerals. You thought you would never have to remember that.

A uses B uses C

C uses A but not B

B uses C

"Ooooo, A uses B I should use them for C!"

Just selling to other early-stage startups doesn’t generate much growth/revenue or make you look like a solid business to a sophisticated investor. SaaS/B2B companies that make it big do so because they get huge numbers of small-medium businesses using their platform, not just startups - I.e, Slack, Stripe, Square, Shopify, Canva, Zendesk, Zapier, Segment.

Having other startups using your product is a good early source of product feedback and a strong signal to very early-stage investors, but that alone doesn’t give you the huge growth you need for bigger funding rounds.

It’s very different to the scenario PG was describing in the 90s; in those days, a startup would be founded, quickly IPO to raise several $million from unsophisticated retail investors, then spend much of it on advertising on Yahoo to drive traffic and artificially push the share price up. Hence when the music stopped in 2000 all that ad spend dried up and Yahoo’s share price crashed.

All those companies I mentioned above are going fine; slowed growth, sure, but they have real businesses with broad customer bases well beyond the startup ecosystem, so they’re all able to continue operating and doing OK.

Same way with games I enjoy. I never tend to buy the "skins" or "cosmetics" unless one _really_ clicks with me.

You aren't spending $25 on video game shit, you're spending $25 on a fun skin to show your pals, or upgrades to help your friends beat some boss, or whatever

Once you get on that path, it can lead pretty normal people to some very dark places indeed

Maybe you've already found a decent app (or realised that your camera has a built-in scanner), but the confusingly-named Barcode Scanner (https://play.google.com/store/apps/details?id=com.google.zxi...) scans QR codes without fuss.

I’m on iOS, tried a few but they all wanted a subscription and were a terrible experience without it. So I wrote simplescan.vercel.app / https://github.com/mcintyre94/simplescan which does the job for me! Though Apple have broken using the camera when you save it to your Home Screen and open it as an app which is annoying.

Ah, that explains it! Your usecase explains it, but I'm reasonably assuming Android because recent iOS versions have it built-in.

As does Android, just open the Camera app and point to the code.

There is a way to rate and classify derivatives appropriately, you just can't hold the ratings people hostage. I don't think there's a way to do that with crypto.

The banks weren’t to blame for 2008 any more than were the hoardes of FOMO buyers - in that they were both pretty culpable but neither of them were the real problem.

Lax regulation of the rating agencies was the real smoking gun. I’m not even sure it was ever addressed given all the banker witch hunts that ensued, and will next time too.

Dave Chappelle was on Saturday Night Live this past week and did a bit in the monologue about why we can’t have good regulations. Worth checking out:

https://m.youtube.com/watch?v=_m-gO0HSCYk

(Starts at 8:50)

The spent their HELOC and never had to pay it back, they took the "first time homebuyers tax credit", and many of them lived in the house they "bought" for a year or two without paying any mortgage payment until the bank finally took it back. They never paid income tax on any forgiven debt, and they never paid income tax on the imputed income from living in a nice house for a couple of years rent-free until the bank finally was able to take possession of it.

Nothing wrong at all, it's good to bootstrap an initial customer base and get some user-feedback, but until the chasm is crossed to "real" customers, one could argue that this is the same case nowadays. So the dotcom time was no better nor worse than right now in terms of startup viability.

In some cases you could see it being positive not having your stock price drop everytime the Fed announces a new rate increase or jump everytime they don't (or etc etc with other events) if your primary goal is to continue at a steady pace to achieve some goal.

That’s a rather fine and unimportant distinction.

It is characteristic of crypto, just not only crypto.

And, in the case of crypto, the asset never represents anything but itself.

> in the case of crypto, the asset never represents anything but itself.

This is the foul taste of all crypto "assets". They are not assets because they have no intrinsic value for anything.

The nearest real economy analogy is the art market, which is hopelessly inflated, utterly riddled with fraud, and with very little intrinsic value.

But you can hang a painting on a wall and look at it. Even if it is a fake it still looks good on the wall.

Crypto has none of that. All it has is the scam, the fake, the hope of a bigger fool.

Shame on us for letting this happen. It gives a bad name to geeks in general and cryptography specifically.

Crypto doesn't have the same properties, but if a crypto token isn't a security then you can get some other tax benefits via wash sales.

Don't know the "real" price because it's infrequently (or never) traded.

Tokens, etc. are easiest to think of as securities (aka stock) generally, albeit securities in a more abstract thing than a company.

Also; stock in private companies is often not tradeable at all, but no accountant is going to call those fake.

There are multiple ways of plausibly pricing assets.

None are generally accepted that would let someone just make up a ridiculous valuation and stand up to any scrutiny, but people can always do what they want until the auditors show up anyway.

Now, whether or not this is how banks act in practice is another question. It is, perhaps, how they should act if they're being conservative, but it is likely that others will swoop in and often enough grab that interest for themselves. And in the rate environment we've been in until very recently, those are likely the banks that have managed to survive in many cases.

The fundamentals for your ponzi coins are so bad they might as well be worth zero, so why would that insignificant value difference matter anyway?

Crypto tokens are unable to generate revenue.

In the case of crypto companies who create their own tokens and then use them as collateral, they never actually paid anything for the tokens they own. There's not even a cost basis. It's entirely made up.

Not only is what the crypto companies doing much worse, but it is rare for VCs to leverage their investments in companies. It's not like their fund is levering up 2:1 and buying companies, like a PE fund does, because in the case of VCs their investments are usually not producing cash flow. But in the case of some of these crypto companies, they were levering up using collateral of tokens they made up that they never paid anything for.

It's much, much worse than anything recently seen in finance. CDOs were bad in 2008, but at least the mortgages were a secured claim on a physical asset that someone actually paid something for.

Also my phone does not flag DogeCoin as a misspelled word.

Anyone who invests in this stuff is either really dumb, or morally impaired yet smart enough to exploit people who are really dumb.

Nobody cares as long as the spice is flowing.

This is well understood and goes on all the time in NFTs, it's usually called wash trading.

People in crypto know this is happening. The reason they still speculate is because it's hard to predict when it will collapse, and some people think they have an edge predicting that sort of thing.

These shenanigans have been going on for a long time in wealthy groups.

Isn't this what happened with Quadriga exchange?

The regulator said Thursday that Vancouver-based Quadriga's late founder Gerald Cotten committed fraud by opening accounts under aliases and crediting himself with fictitious currency and crypto asset balances, which he traded with unsuspecting clients.

On Thursday, the OSC attributed about $115 million of the $169 million clients lost to Cotten's "fraudulent" trading.

Another $28 million was lost when Cotten used client assets on three external crypto asset trading platforms without authorization or disclosure.

The OSC said he also misappropriated millions in client assets to fund his "lavish" lifestyle and because he was in sole control of the company ever since 2016, he "ran the business as he saw fit, with no proper system of internal oversight or controls or proper books and records."

https://www.cbc.ca/news/business/osc-quadriga-gerald-cotten-...

Anybody can do that, true. What you also need is credibility and willingness to destroy that. Look at Fried Bankman, he had had tons of pedigree and knew what ears to wisper too. He apparently wasn't saying anything smart and yet people believed him. He was even rude and playing videgames during meetings and yet people believed him. It's easy and yet it isn't. I think scammers have qualities normal people don't have and when all those line up we get a super bankrun like what happened in this case.

Here are the docs for V1 (V3 is different, but the core pieces remain) https://docs.uniswap.org/protocol/V1/introduction.

V2 docs have fun diagrams if that is useful for you https://docs.uniswap.org/protocol/V2/concepts/protocol-overv...

It's quite interesting, and essentially what happens is that a pairing pool is created, ETH <> Shtcoin for example. So now for that shtcoin to have "value" it needs to be liquid within the pool, ie can go into ETH. The cost of the coin is determined mathematically based on the ratio each side of the pool.