I'd argue the time to get out passed long before delays. The time to get out is when a competitor has delays(if you're so lucky). I remember reading and studying Celsius vs Voyager for about a month before I put low 5 figures into Voyager. Hey, free money right?
Then Celsius hit snags, and people were -still- recommending Voyager. I noped right out and withdrew it all.
What do you know, a couple weeks later Voyager suspends all withdrawals. I believe I have like 9 dollars tied up still with them, because I keep getting weekly updates in their 'plan.'
I do feel for people who lost more than I put in, but at some point you have to expect people to know money isn't free and the gravy train doesn't last forever.
Since all of these systems are negative-sum, in almost all cases, the majority lose more than they put in. That's how these scams work.
I would discourage everyone from developing the apetite for "free money" in these cases, because it isnt free. You were just lucky enough to be early in the pyramid scheme which ends with the vast majority losing everything. It was their cash you withdrew, that's the source of your "free" money.
If people want to know why these scams are so common, its because they work. People early-in, early-out extract money from the rest.
Nevertheless, in almost all cases, by the time you hear about the opportunity, you're too late to scam people. If nothing else, at least presume this.
(which is the anti-dote to FOMO: by the time you feel FOMO it's too late, you'll be the dupe)
Yes, or more bluntly: if you identify something as a Ponzi but are able to get in and out fast enough to profit, that is stolen money and you are as culpable as the original founders.
> Investors who profited in good faith from Bernie Madoff’s Ponzi scheme must return millions they received in excess of their principal, the Second Circuit ruled, affirming judgments allowing the firm’s liquidating trustee to claw back the funds.
> Net winners of Madoff’s infamous Ponzi scheme don’t have property or contract rights to profits earned over and above what they invested, even though they were unaware of Madoff’s fraud, the U.S. Court of Appeals for the Second Circuit ruled Thursday.
> Since all of these systems are negative-sum, in almost all cases, the majority lose more than they put in.
This is a solid argument and I'd have made it once. But given how the situation is shaping up it is difficult to avoid the comparison to gold which is also a net-negative system, has been waddling on for several thousand years now and has proven irrepressible as an asset (despite many credible efforts to stamp it out).
The argument about whether crypto as a system can create value has been settled in the affirmative. We've never seen these sort of reliable transaction guarantees before in a monetary system and some people are willing to pay for that. Value is being created. The only question still open is what cost is appropriate. So far the market has been consistently saying "more" but maybe that is an aberration.
I anticipate these being common points so here is my quick rebuttal to each:
> it's a physical object
That isn't an argument for or against crypto. Crypto is a virtual object and that is desirable, makes it easier to get past a border. I can't easily get my gold out of the country - this is one of my considerations when I started buying in to Monero. There'd be a lot less interest from inside China if crypto was a physical object.
> it has use value in jewelry
Yep. Think about that deeply. One of its primary functions is looking good, and it isn't do so well at that job compared to coloured glass. The point of gold jewellery is to show off - politely - that someone can afford to own gold. There is nothing happening there that Bitcoin can't do except Bitcoin is even more public about how much someone owns.
> it has use value in electronics and other industrial applications
And they'd be able to afford a lot more of it if the investors would go away. Gold's value has been a thing for literal centuries and electronics have only existed for decades. This isn't driving the value of gold as an investment, gold's corrosion resistance is. Crypto has arguably better, arguably worse properties over long periods of time. Really we are still to find this out, it hasn't been around long enough to know what a decade in crypto looks like (at equilibrium).
> That isn't an argument for or against crypto. Crypto is a virtual object and that is desirable, makes it easier to get past a border.
Crypto is like a family game of monopoly that gets a little out of control. There is this long-running game, and the family are really invested in trying to 'win'. So much so that they were willing to pay with real money to buy monopoly money from one another just to keep playing. As the game progressed, the banker gave out more money as people passed go, but the agreed amount for the monopoly money remained the same.
Neighbours watching the game see the family playing the game and ask to buy some monopoly money seeing it will be more valuable in just a few throws of the dice. This increased demand for a limited supply of monopoly money, which saw the people already holding monopoly money profit more. This further attracted people to the game. Soon the whole neighbourhood is trading in monopoly money, and everyone who does sees a profit.
Off the back of this successful and profitable game of monopoly, others tried to replicate it in a nearby community. Services started popping up where people offered to hold the monopoly money for people, and would allow it to be exchanged for other monopoly monies. Secretly though, the monopoly exchanges were busy trading those people's monopoly money so that they too could invest it further in the game. They justified it to themselves, promising they would return it as soon as they made it back.
Some of these exchange services played way too dangerously, and lost all of their monopoly money. This startled players of the game, and they decided to withdraw their monopoly money investment for real money they trusted before playing the game. This in turn triggered those exchanges that also gambled monopoly money to have to admit that it was no longer there.
Now to current day. More and more people get startled by losses and start pulling out to recover what they can, as promises of returning to the glory days of high value monopoly money never materialize. Most of the exchanges have their liquidity in other monopoly money exchanges, and as these 'assets' diminish, so do their own. Some hold real world liquid assets, but the people running the exchanges quickly pull this out for themselves.
It's the future, and anybody left holding monopoly money once again has a token money for a game people stopped playing a long time ago. They hold onto it because they either couldn't get out before it all imploded, or they delude themselves into thinking everybody will come back to the table and start playing again.
The monopoly game is over, and the family no longer talk to each other. Some of the family are now mega rich, but this was at the cost of the majority of players that joined the game, mostly those with smaller amounts invested and those who turned up late.
> And they'd be able to afford a lot more of it if the investors would go away.
They wouldn't. Gold is super valuable because it has tonnes of special properties, and there isn't much of it.
Gold has kept its value for thousands of years because it's not net-negative. People happily buy gold and "lose" money on the deal, because they value the gold more than the money.
So investors can gain money, buyers can gain gold, and everyone can come out ahead.
Unlike crypto, where one investor's gains come at the expense of another investor who loses, because few people buy crypto for its own sake.
that kind of assumes the tokens produced have no value which in the case of stuff like bitcoin seems empirically not to be true. Even after all the crashes etc. you can sell them for >$10k each
And if you say the people paying $10k+ for bitcoins are just mugs, it's all 0s and 1s, it is hard to differentiate from regular currency which is also just bits of paper or 0s or 1s. Both have value because in practice you can exchange them for real stuff.
The whataboutism kinda falls flat since both can be true: fiat currency from a govt and crypto can both have zero real value, propped up only by shared delusions.
However, govt currency is propped up some by it's taxing authority (the govts ability to take value from its residents)
I'd argue the time to get out passed long before delays. The time to get out is when a competitor has delays(if you're so lucky). I remember reading and studying Celsius vs Voyager for about a month before I put low 5 figures into Voyager. Hey, free money right?
Then Celsius hit snags, and people were -still- recommending Voyager. I noped right out and withdrew it all.
What do you know, a couple weeks later Voyager suspends all withdrawals. I believe I have like 9 dollars tied up still with them, because I keep getting weekly updates in their 'plan.'
I do feel for people who lost more than I put in, but at some point you have to expect people to know money isn't free and the gravy train doesn't last forever.