Reasons why if crypto is a Ponzi, then companies are Ponzis (so neither is).
Let’s start with the definition: “A Ponzi scheme is a fraudulent investing scam which generates returns for earlier investors with money taken from later investors.”
A thread ↓
1] Generating returns
- Crypto projects generate returns whether they are networks (staking rewards) or dapps (operation fees that are actual revenue)
- Companies generate returns when they pay a small % of what they earn from selling things and offering services
2] Generating returns for earlier investors
- If you buy a crypto coin before anyone notices it has potential value, you earn from its appreciation over time
- If you buy a stock before anyone notices it has potential value, you earn from its appreciation over time
3] Returning money to earlier investors using money taken from later investors
- From 2], an investor would like to realize profits by selling its crypto coins to other investors that want to buy it
- From 2], .... by selling its stocks to other investors that want to buy it
So both are Ponzis. Or maybe not, because neither are scam. Or they could be, selectively. Just like some stock can be a scam (Madoff, remember?), some coin can be a scam.
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@ijaack94
Growing @routescan_io | Avalanche OG @avascanexplorer | #DeFi researcher | Collector @pokejaack | Tennis amateur. RT ≠ endorsement. My views are only mine.