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Tulip mania is the go-to comment for every post about crypto on HN, you don't need the link. Shocked no one called this a Ponzi scheme yet.

sofixa 4y ago
TFA isn't describing a Ponzi scheme because (as far as we know) the person doing the machinations doesn't run the scheme (underlying "coin") and doesn't use new investors' money to pay off existing ones. It's just a pump and dump (buy while something is cheap, hype it up to make the price go up, then sell at the top).
- phabricator 4y ago
  I know, still surprised no one has called it that
efficax 4y ago
tulip mania and ponzi schemes come up for a good reason
- johnnymorgan 4y ago
  ..and those reason are what exactly in relation to the solve of the Byzantium Generals problem? USD is still the goto choice for ponzi and scams in general, does that invalidate it's utility?
  - Swenrekcah 4y ago
    False equivalency, since USD has actual uncontested utility and is backed by real world value.
    - rout39574 4y ago
      Backed by fiat. I mean, the US has got some really sharp and explodey fiat, arguably the most fiat fiat in the world. But we stopped pretending it was backed by anything else in the 70s.
      - Swenrekcah 4y ago
        It isn’t backed by fiat. Fiat isn’t a thing, it is a description. USD is fiat money, built on trust sure, but in practice backed by the wealth and power of the United States.
        johnnymorgan 4y ago
        Nice circular logic there
  - JshWright 4y ago
    > USD is still the goto choice for ponzi and scams in general, does that invalidate it's utility? What percentage of circulating USD is involved in that sort of activity?
    - johnnymorgan 4y ago
      How about absolutely value over percentage as that is a total BS metric in this context and you know it. Give us absolutely values...yeah nice way to deflect but doesn't hold up bud.
      - JshWright 4y ago
        Why wouldn't percentages be relevant? If one currency delivers a massive amount of utility and value to society while a tiny fraction of it is used for illicit purposes (i.e. USD), and another currency is overwhelming used for illicit purposes, with only a tiny fraction being used for actual utility, that is a meaningful comparison.
        johnnymorgan 4y ago
        Because it's a way to hide the true depth of an issue by boiling it down to % of market cap. Deal with absolute numbers and it pales in comparison, and again it's used for scams is a null argument unless you hide it in percentages. The argument applies to any fungible asset and isn't unique to blockchain. Also check the history of the dollar and financial networks.. clever shitty people will always be ahead of the curve. It's why I support regulation, people are very good at identifying bad behaviours and mitigating it..that is until they end up running it.
        JshWright 4y ago
        You're not making an argument here, you're just saying "percentages bad, absolute value good". The only argument you're making is that using percentages "hides" the negatives USD, but the reverse of that is equally true (absolute values hides the problems w/ cryptocurrency). My argument is that the net impact of USD is positive, while the net impact of cryptocurrency is negative.
  - jwozn 4y ago
    USD is the go-to choice, but the percentage of total volume that is involved in ponzi's and scams is much, much lower than in crypto.
  - jameshart 4y ago
    All scams are actually denominated in a currency that has actual value. The goal of a scammer is for them to obtain something valuable (US Dollars, say) from their victim and leave their victims with something worthless (a crypto coin, say).
    - johnnymorgan 4y ago
      Again how does that invalidate the utility of blockchain? Protip: don't FOMO into anything as you will always be a bag holder. That's about the jist of your response and has nothing to do with the utility of blockchain
      - jameshart 4y ago
        It doesn’t. Any more than tulip mania invalidated the utility of planting bulbs to get flowers to come up in the spring. The posts you are responding to never said blockchain consensus protocols don’t work. All they are saying is that hype coins tend to have the shape of a scam. Now, if you want to get back to us just as soon as you find an application for blockchain consensus protocols that isn’t basically a hype coin, we’d be happy to hear about that.
        johnnymorgan 4y ago
        I'm responding to you not OP, nice try but very dishonest of you. IPFS, storj, any number of infrastructure projects/value props. Hellium, which is a wireless access point blockchain, there are a bunch but you aren't actually interested in any of this. > Get back to us Dude speak for yourself only, I have no idea who you think you represent but you're wrong if you think it's anyone but yourself. It's clear your not a genuine actor in this dialogue. Let's see you move that goal post.
        jameshart 4y ago
        IPFS is not a blockchain consensus protocol though? And the first five hits on google for storj talk about its investment potential, so.. that looks a lot like a hypecoin to me. But that’s not really important. Personally I haven’t even seen the goalposts in this interaction since you decided that, in a discussion of a shitcoin pump-and-dump scam, the fact that said coin is built on a solution to the Byzantine Generals problem is somehow important, and… means that people shouldn’t criticize scammers taking advantage of credulous investors to fleece them? It does not matter if a shitcoin is built using quantum manipulation of the space time continuum, if all that is being done with it is selling it to rubes to obtain their dollars. You can be excited about blockchain, that’s fine, and you can believe it has actual value. But when people point out that your favorite technology is actually continually being used to perpetrate scams, you should get angry with the scammers, not the people who are pointing that out. Personally, I like JavaScript. When people shout about tracker-infested slow loading websites, I don’t respond by saying ‘you’re wrong because actually the object dictionary duality in JS is a really elegant system’. That doesn’t matter. I reserve my anger for the people who are using JavaScript for evil.
  - efficax 4y ago
    crypto solves the byzantium generals problem, sure, but that's not a problem we were struggling with in the financial system, and it creates more problems than it solves
    - johnnymorgan 4y ago
      Knowing who to trust is absolutely a major problem in financial networking, whether it's crypto, digital or physical. FUD & FOMO are exactly derived from this problem.
      - NateEag 4y ago
        > Knowing who to trust is absolutely a major problem in financial networking, whether it's crypto, digital or physical. Solving the Byzantine Generals problem doesn't help you know who to trust. With a large enough network, it makes it extremely difficult for malicious actors to subvert the process of exchanging money. It does nothing to solve other crucial aspects of "who do I trust with my money", such as having recourse when someone scams you into giving them money. In fact, the technology's spread has enabled terrible abuses of trust like cryptolocker attacks, and has probably made scamming much more profitable and practical. If the solution to those problem has even a whiff of "user error" in it, then I submit that the problem is not actually with the users (it so rarely is).
      - prepend 4y ago
        I don’t think so as evidenced by financial systems moving trillions of dollars that have figured out who to trust. There are exchanges that have “solved” the trust issue and they seem pretty solvent and successful.
    - 8note 4y ago
      Does it actually save the Byzantine generals problem though? How do you prove that only the attacker doesn't also have access to a private key?
  - TomSwirly 4y ago
    Blockchain doesn't actually solve the Byzantine Generals problem, because that is in principle unsolvable. It mitigates the issue by making a 51% attack or its equivalent harder. Outside cryptocurrencies, there is literally no practical application for even an approximate solution for the Byzantine Generals problem. Outside cryptocurrencies, you can always use a 1970s vintage Merkle tree without the 10000x weight of the blockchain.
    - johnnymorgan 4y ago
      Byzantium would disagree with your analysis...except it doesn't exist anymore because it couldn't solve the problem. You are splitting hairs on the solve and it comes off as petty. Bitcoin 100% has solved it, prove me wrong by showing me how it's failed. > Outside cryptocurrencies, there is literally no practical application for even an approximate solution for the Byzantine Generals problem Hmmm sure
      - svnt 4y ago
        > prove me wrong by showing me how it's failed. This shifts the work for your position to another person, and in the negative. Certainly it makes your life easier, but in traps you in a bubble of your own creation. It’s essentially the same as admitting “I can’t prove it, so you have to prove the inverse” and hoping the other person will Marty McFly for you, and waste their time instead. It’s a solid method for reinforcing confirmation bias because whether they try or forget about it and move on you get to continue in your assumed position.
      - recursive 4y ago
        Sure, bitcoin "solves" byzantine generals the same way TCP "solves" it. The theoretical construction is probably unsolvable, like the halting problem. In practice, you can "solve" the halting problem for most inputs too. In the general construction of byzantine generals, there's essentially an adversarial agent preventing arbitrary communications. As far as I know, a distributed ledger can't generally survive in such an environment. Nor can TCP.
      - rovolo 4y ago
deleted 4y ago
[deleted]

sofixa 4y ago

TFA isn't describing a Ponzi scheme because (as far as we know) the person doing the machinations doesn't run the scheme (underlying "coin") and doesn't use new investors' money to pay off existing ones. It's just a pump and dump (buy while something is cheap, hype it up to make the price go up, then sell at the top).

phabricator 4y ago
I know, still surprised no one has called it that

efficax 4y ago

tulip mania and ponzi schemes come up for a good reason

johnnymorgan 4y ago
..and those reason are what exactly in relation to the solve of the Byzantium Generals problem? USD is still the goto choice for ponzi and scams in general, does that invalidate it's utility?
- Swenrekcah 4y ago
  False equivalency, since USD has actual uncontested utility and is backed by real world value.
  - rout39574 4y ago
    Backed by fiat. I mean, the US has got some really sharp and explodey fiat, arguably the most fiat fiat in the world. But we stopped pretending it was backed by anything else in the 70s.
    - Swenrekcah 4y ago
      It isn’t backed by fiat. Fiat isn’t a thing, it is a description. USD is fiat money, built on trust sure, but in practice backed by the wealth and power of the United States.
      - johnnymorgan 4y ago
        Nice circular logic there
- JshWright 4y ago
  > USD is still the goto choice for ponzi and scams in general, does that invalidate it's utility? What percentage of circulating USD is involved in that sort of activity?
  - johnnymorgan 4y ago
    How about absolutely value over percentage as that is a total BS metric in this context and you know it. Give us absolutely values...yeah nice way to deflect but doesn't hold up bud.
    - JshWright 4y ago
      Why wouldn't percentages be relevant? If one currency delivers a massive amount of utility and value to society while a tiny fraction of it is used for illicit purposes (i.e. USD), and another currency is overwhelming used for illicit purposes, with only a tiny fraction being used for actual utility, that is a meaningful comparison.
      - johnnymorgan 4y ago
        Because it's a way to hide the true depth of an issue by boiling it down to % of market cap. Deal with absolute numbers and it pales in comparison, and again it's used for scams is a null argument unless you hide it in percentages. The argument applies to any fungible asset and isn't unique to blockchain. Also check the history of the dollar and financial networks.. clever shitty people will always be ahead of the curve. It's why I support regulation, people are very good at identifying bad behaviours and mitigating it..that is until they end up running it.
        JshWright 4y ago
        You're not making an argument here, you're just saying "percentages bad, absolute value good". The only argument you're making is that using percentages "hides" the negatives USD, but the reverse of that is equally true (absolute values hides the problems w/ cryptocurrency). My argument is that the net impact of USD is positive, while the net impact of cryptocurrency is negative.
- jwozn 4y ago
  USD is the go-to choice, but the percentage of total volume that is involved in ponzi's and scams is much, much lower than in crypto.
- jameshart 4y ago
  All scams are actually denominated in a currency that has actual value. The goal of a scammer is for them to obtain something valuable (US Dollars, say) from their victim and leave their victims with something worthless (a crypto coin, say).
  - johnnymorgan 4y ago
    Again how does that invalidate the utility of blockchain? Protip: don't FOMO into anything as you will always be a bag holder. That's about the jist of your response and has nothing to do with the utility of blockchain
    - jameshart 4y ago
      It doesn’t. Any more than tulip mania invalidated the utility of planting bulbs to get flowers to come up in the spring. The posts you are responding to never said blockchain consensus protocols don’t work. All they are saying is that hype coins tend to have the shape of a scam. Now, if you want to get back to us just as soon as you find an application for blockchain consensus protocols that isn’t basically a hype coin, we’d be happy to hear about that.
      - johnnymorgan 4y ago
        I'm responding to you not OP, nice try but very dishonest of you. IPFS, storj, any number of infrastructure projects/value props. Hellium, which is a wireless access point blockchain, there are a bunch but you aren't actually interested in any of this. > Get back to us Dude speak for yourself only, I have no idea who you think you represent but you're wrong if you think it's anyone but yourself. It's clear your not a genuine actor in this dialogue. Let's see you move that goal post.
        jameshart 4y ago
        IPFS is not a blockchain consensus protocol though? And the first five hits on google for storj talk about its investment potential, so.. that looks a lot like a hypecoin to me. But that’s not really important. Personally I haven’t even seen the goalposts in this interaction since you decided that, in a discussion of a shitcoin pump-and-dump scam, the fact that said coin is built on a solution to the Byzantine Generals problem is somehow important, and… means that people shouldn’t criticize scammers taking advantage of credulous investors to fleece them? It does not matter if a shitcoin is built using quantum manipulation of the space time continuum, if all that is being done with it is selling it to rubes to obtain their dollars. You can be excited about blockchain, that’s fine, and you can believe it has actual value. But when people point out that your favorite technology is actually continually being used to perpetrate scams, you should get angry with the scammers, not the people who are pointing that out. Personally, I like JavaScript. When people shout about tracker-infested slow loading websites, I don’t respond by saying ‘you’re wrong because actually the object dictionary duality in JS is a really elegant system’. That doesn’t matter. I reserve my anger for the people who are using JavaScript for evil.
- efficax 4y ago
  crypto solves the byzantium generals problem, sure, but that's not a problem we were struggling with in the financial system, and it creates more problems than it solves
  - johnnymorgan 4y ago
    Knowing who to trust is absolutely a major problem in financial networking, whether it's crypto, digital or physical. FUD & FOMO are exactly derived from this problem.
    - NateEag 4y ago
      > Knowing who to trust is absolutely a major problem in financial networking, whether it's crypto, digital or physical. Solving the Byzantine Generals problem doesn't help you know who to trust. With a large enough network, it makes it extremely difficult for malicious actors to subvert the process of exchanging money. It does nothing to solve other crucial aspects of "who do I trust with my money", such as having recourse when someone scams you into giving them money. In fact, the technology's spread has enabled terrible abuses of trust like cryptolocker attacks, and has probably made scamming much more profitable and practical. If the solution to those problem has even a whiff of "user error" in it, then I submit that the problem is not actually with the users (it so rarely is).
    - prepend 4y ago
      I don’t think so as evidenced by financial systems moving trillions of dollars that have figured out who to trust. There are exchanges that have “solved” the trust issue and they seem pretty solvent and successful.
  - 8note 4y ago
    Does it actually save the Byzantine generals problem though? How do you prove that only the attacker doesn't also have access to a private key?
- TomSwirly 4y ago
  Blockchain doesn't actually solve the Byzantine Generals problem, because that is in principle unsolvable. It mitigates the issue by making a 51% attack or its equivalent harder. Outside cryptocurrencies, there is literally no practical application for even an approximate solution for the Byzantine Generals problem. Outside cryptocurrencies, you can always use a 1970s vintage Merkle tree without the 10000x weight of the blockchain.
  - johnnymorgan 4y ago
    Byzantium would disagree with your analysis...except it doesn't exist anymore because it couldn't solve the problem. You are splitting hairs on the solve and it comes off as petty. Bitcoin 100% has solved it, prove me wrong by showing me how it's failed. > Outside cryptocurrencies, there is literally no practical application for even an approximate solution for the Byzantine Generals problem Hmmm sure
    - svnt 4y ago
      > prove me wrong by showing me how it's failed. This shifts the work for your position to another person, and in the negative. Certainly it makes your life easier, but in traps you in a bubble of your own creation. It’s essentially the same as admitting “I can’t prove it, so you have to prove the inverse” and hoping the other person will Marty McFly for you, and waste their time instead. It’s a solid method for reinforcing confirmation bias because whether they try or forget about it and move on you get to continue in your assumed position.
    - recursive 4y ago
      Sure, bitcoin "solves" byzantine generals the same way TCP "solves" it. The theoretical construction is probably unsolvable, like the halting problem. In practice, you can "solve" the halting problem for most inputs too. In the general construction of byzantine generals, there's essentially an adversarial agent preventing arbitrary communications. As far as I know, a distributed ledger can't generally survive in such an environment. Nor can TCP.
    - rovolo 4y ago

deleted 4y ago

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