Is Crypto a massive Ponzi? Re: FTX
As I try to read & understand crypto, it’s workings, the exchanges, tokens etc. the less it makes sense, and to top it I hear companies failing one bigger than the other. The latest being FTX, how does this massive ‘$32B’ exchange have a liquidity crunch?! Where do they stash these funds away only to declare they’re bankrupt. Their founder looks like a hobo anyway. Should I just sell the 0.5 doge I hold? Can someone please explain this to me like I’m five? #tech #crypto #investments
The entire economy is a giant Ponzi scheme.
I love how people can’t wrap their heads around then mechanics of money.
It’s another form of gambling, which combined with leverage has destroyed rhe industryi within the last 6 months
Yes, yes it is.
Bitcoin isn’t a Ponzi. Majority of crypto, however, is a giant Ponzi.
Because you HODL BTC? 😂
No retard, because for some strange reason there are a lot of banks developing infrastructure to support crypto transactions (namely btc).
Basic explanation of the liquidity issue: 1. Investors purchase crypto using USD on a centralized exchange. 2. Exchange invests the coins/USD to try and make money. 3. If the investment choice is down and the exchange is required to sell, they sell at a loss. 4. If the exchange loses enough money, they can’t guarantee fulfilling all liquidity requests because there isn’t enough money to complete all the transactions. Bigger story: avoid centralized exchanges like the plague
Yes it’s a Ponzi scheme, it’s also a ‘Pump & Dump’ scheme and pretty much every illegal scheme that’s been used to fleece marks over the years.
How long until quantum computing comes along and ruins all of them by quickly solving the hashing algorithms?
The ecosystem can decide to use another algo with a hard fork.
Their deranged founder literally a week ago posted a mile long thread as to how secure their assets are, regulated & with enough to cover incase of an emergency. Where TF is the accountability now that his ass is exposed (thanks to the leaks I read)
Of course it is. What else justify the price of crypto besides the price itself? People will bs saying the value is related to scarcity, but that only applies to things that are actually irreplaceable (contrary to tons of alternative cryptos that are created daily) and people are willing to acquire. I can say there is scarcity to my trimmed finger nails, but that alone doesn't make it valuable. A stock share has intrinsic value backed by their profits and assets. Crypto is a Ponzi scheme. If everyone decides to sell their coins, price will tank to zero.
Yes. It is worse: crypto is like fashion. Popularity dictates value. Fashion changes as new cryptos are introduced. Anyone can make more fashion. Anyone can make 'more' crypto. As a result they will not hold value forever