A Ponzi scheme has a specific name because it's an especially nasty type of fraud which has ruined a LOT of people in the past.
What makes a Ponzi scheme is when some bad guy:
1. Starts taking people's money, telling them that he's investing it in <some asset>
2. But this is a lie, the asset does not exist, he just takes their money and holds it
3. And he falsely represents the "stock" as going up in value, and uses the money to pay investors who want to cash out
4. Until he runs out, then he skips town and everybody remaining loses everything
If you don't have a bad guy taking people's money and lying about what he's doing with it, it's not a Ponzi scheme.
Ponzi schemes are actually quite rare in crypto because it's too transparent to allow "the lie" to happen.
But because Ponzi schemes are SO DAMAGING (See: 1997 Albanian civil unrest), high-functioning retards use the term to refer to anything speculative in nature which they don't like. It's the financial equivalent of the "literally Hitler" meme.
Caleb James DeLisle /
npub1mh…q233h
2024-10-07 08:36:57
in reply to nevent1q…hel5
Author Public Key
npub1mh5a6mhm4u78glqxhltq7uexv6kddphycthlguvn0ux8ch72tc8q6q233hPublished at
2024-10-07 08:36:57Event JSON
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"content": "A Ponzi scheme has a specific name because it's an especially nasty type of fraud which has ruined a LOT of people in the past.\n\nWhat makes a Ponzi scheme is when some bad guy:\n\n1. Starts taking people's money, telling them that he's investing it in \u003csome asset\u003e\n\n2. But this is a lie, the asset does not exist, he just takes their money and holds it\n\n3. And he falsely represents the \"stock\" as going up in value, and uses the money to pay investors who want to cash out\n\n4. Until he runs out, then he skips town and everybody remaining loses everything\n\nIf you don't have a bad guy taking people's money and lying about what he's doing with it, it's not a Ponzi scheme.\n\nPonzi schemes are actually quite rare in crypto because it's too transparent to allow \"the lie\" to happen.\n\nBut because Ponzi schemes are SO DAMAGING (See: 1997 Albanian civil unrest), high-functioning retards use the term to refer to anything speculative in nature which they don't like. It's the financial equivalent of the \"literally Hitler\" meme.",
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