I'm not sure either of your comments are productive here. You assert that it would be hard to find any crypto business that isn't 'rooted in some kind of scam'. But where's the evidence that coinbase for e.g is 'rooted in a scam, greater fool scheme or ponzi'? There are scammy activities in so much of crypto, but what is pointing to the most visible, normie-facing, publicly traded and regulated American crypto company, being 'rooted' in scamming or ponzi schemes? Because this post suggests a bad actor within or close to the company, or at worst the company knowingly associating with sketchy tokens, rather than the entire company's activities being fundamentally rotten. I know HN likes to be extremely skeptical of crypto, often rightly so, but your comment isn't exactly nuanced.
I did address this in a sibling comment - the exchanges are primarily used to buy and sell crypto to greater fools, and thus they are rooted in a greater fool scheme. The vast majority of use for crypto is speculation.
But you see, even if I did agree that that was the case that all exchanges are rotten, you originally said any crypto business. You think the various businesses that focus on staking, or cold wallet businesses for example, that focus on consolidation and/or security are 'rooted in scams, greater fool schemes, or ponzi'? How?
Perhaps my original formulation was insufficiently precise to get my point across - I mean that crypto is rooted in scams and pyramid schemes and whatnot in the sense that the nature of the industry makes it a magnet for those kinds of schemes and they are the primary driving force behind the money flooding the industry. That doesn't mean that the exchanges themselves are explicitly doing these things, or that all the businesses are either directly engaged in or materially supporting this behaviour (though I think the majority are), but that it's the driving force of the industry in that transportation drives the oil extraction industry.
HODLing is also speculation. I'm saying that crypto isn't driving useful economic activity like investing in startups or small businesses can do. It's all just people trying to make money by finding a greater fool. Even speculation in a normal market can drive /some/ innovation through capital allocation.
Defining a multi-year buy & hold strategy as speculation doesn’t sound like something I can get behind. I get what you’re saying, but I think you’re making sweeping generalizations here. There’s plenty of people that invest in useful economic activity, but also save some money in other assets like gold and bitcoin. You are just calling these people speculators hoping for a greater fool?
Or is it possible that these people have grown to trust bitcoin, seeing it as a savings vehicle outside of the usual currencies?
I'm glad you understand what I'm trying to say, even if "speculation" isn't quite the right term for it.
I think scams are an obvious harm, but the highly financialised and speculative nature of crypto is a more subtle harm: most investment produces positive material side effects like products or services, but because the main selling point of crypto is to continually pass it around in a circle, a lot of money, time, and expertise is wasted on something that is completely unproductive. To be fair, I think this criticism mostly applies to Wall Street too, but most people no longer try to argue that Wall Street is a source of meaningful innovation. To say nothing of the proof of work model leading to ever increasing energy consumption during climate change.
I just don't see much real upside to the crypto industry, and quite a lot of downside.
