Wiki:
https://en.wikipedia.org/wiki/Ponzi_scheme
The words gets thrown around a lot these days. Especially in the crypto world. Some say Bitcoin is a big ponzi. Funniest thing tho, some Bitcoiners say all altcoins are a Ponzi. The irony!!!
Some altcoiners say (only) ICO's are a ponzi. Beautiful.
The Wiki definition is quite easy to understand, but it was written pre-crypto.
What constitutes a Ponzi in this forum:
- Everything you, the smartest person in the world, don't understand
- Everything you, the smartest person in the world, believe is overvalued by your own personal metrics
Greater fools theory:
You could apply this not only to crypto but to all equities traded. In each equity trade, there is a greater fool. In the long run, the value of each equity goes to 0 (even apple!). Some equities/companies live longer, others live shorter.
But what about any network. A small network has very little utility, but if enough people use something, all of the sudden it does become very valuable. Self-fulfilling prophecy. Like many startups. Crazy ideas, in hindsight it was obvious that it would work and we forgot all the crazy ideas that did not work.
What if a "scammy" ICO token attracts enough "fools" to be actually used. You can say that these "fools" invested for the "wrong" reasons (get rich quick, greed). After all, you, the smartest person in the world, know the right reasons to do anything. You also need to protect others for their own good, thx for protecting us!
"I guarantee this will fail":
No ****. It's like saying "one day you will die". One day you'll be right. Statistics are also on your side, 90% of all companies die in the first 10 years (or something like that).
Like the people who know (!) that the USD will crash. You, also, will be right one day. You will also have missed many opportunities.
It's all about timing because one day, all of us die. At least you, the smartest person in the world, will be proven right.
"Intrinsic value" argument:
Gold less of Ponzi than Crypto. Gold trades however at a multiple of it's "intrinsic value". Nobody buys tons of gold so that one day they can make jewelry out of it. Weak insurance at best.
Gold has alternative uses, so what. In case gold crashes, you will only lose 95% instead of 100% if your Crypto crashes. Genius!
If I sell and resell my unique stamps for 1000x it's industrial value, is it a ponzi/scam? Hard to defend intrinsic value
If i create my own belief system it's a sect, but if millions do it, it's a religion.
Lesson to be learned:
More humility towards things you have no clue about. Value to others is not what you believe it should be, but what others assign it by their actions.
Fwiw, I have no stake in any ICO. I don't understand the investments good enough and the risk and incentives are not very well aligned for my taste. For this reason, I stay away.
I'm more playing devil's advocate than anything else. Just more careful than others throwing around words like scam or Ponzi at everything.