How do we make people more resistant to ponzi & pyramid schemes? Does regulation stop them? Is the added attention a risk for the rest of the cryptocurrency space? As long as you don’t make the mistake of stealing from the rich, regulators are not very effective at stopping scams. Scams and schemes happen in both thoroughly regulated and unregulated markets. Most of what regulators do involves restricting entrants on both sides of the market, and by consequence limiting liquidity. They will continue to happen. Most investors will have to have to experience losing money (perhaps repeatedly) in order to learn. It’s very hard to just tell them, to convince someone who’s making returns they’ve never seen in their life that they are participating in a scam which will inevitably collapse. What you definitely don’t want to do is tell investors that if they outsource decision-making and risks, they will get bailed out; that will only make them stupider.

Correction: At 0:40, I mentioned a “George Ponzi. I meant to refer to Charles (aka Carlo) Ponzi.

This talk took place at the Riga Art Space for the Baltic Honeybadger conference on November 25th 2017 in Riga, Latvia: https://antonopoulos.com/event/baltic-honeybadger-2017/

RELATED:
Investing in Education instead of Speculation – https://youtu.be/6uXAbJQoZlE
Ethereum, ICOs, and Rocket Science – https://youtu.be/OWI5-AVndgk
Blockchain vs. Bullshit: Thoughts On The Future of Money – https://youtu.be/SMEOKDVXlUo
Unstoppable code – https://youtu.be/AQx3E3F8Kz4
Could governments take over exchanges? – https://youtu.be/9PrJQeKl9w4
Will governments ban cryptocurrencies? – https://youtu.be/LIQkuF_I5Xo
Initial coin offerings (ICOs) – https://youtu.be/Q5R8KuxV4A0
The token ICO explosion – https://youtu.be/vdaW8NtJXuQ
ICOs and responsible investment – https://youtu.be/C8UdbvrWyvg
ICOs and financial regulation – https://youtu.be/Plu_WX3Gs8E
ICOs, disruption, and self-regulation – https://youtu.be/yfjgcI8xX3A
Scams, gambling, and regulation – https://youtu.be/fTI88YrN1UE

Andreas M. Antonopoulos is a technologist and serial entrepreneur who has become one of the most well-known and respected figures in bitcoin.

Follow on Twitter: @aantonop https://twitter.com/aantonop
Website: https://antonopoulos.com/

He is the author of two books: “Mastering Bitcoin,” published by O’Reilly Media and considered the best technical guide to bitcoin; “The Internet of Money,” a book about why bitcoin matters.

THE INTERNET OF MONEY, v1: https://www.amazon.co.uk/Internet-Money-collection-Andreas-Antonopoulos/dp/1537000454/ref=asap_bc?ie=UTF8

[NEW] THE INTERNET OF MONEY, v2: https://www.amazon.com/Internet-Money-Andreas-M-Antonopoulos/dp/194791006X/ref=asap_bc?ie=UTF8

MASTERING BITCOIN: https://www.amazon.co.uk/Mastering-Bitcoin-Unlocking-Digital-Cryptocurrencies/dp/1449374042

[NEW] MASTERING BITCOIN, 2nd Edition: https://www.amazon.com/Mastering-Bitcoin-Programming-Open-Blockchain/dp/1491954388

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Music: “Unbounded” by Orfan (https://www.facebook.com/Orfan/)
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44 COMMENTS

  1. Crypto market many times gets manipulated by wrong news creating FUD, big whales and future contracts. Now why dont the developers make some platfrom where only legit news gets to be published and only by legit people removing false news completely, using lets say a voting system. That way the things like SCAM ICOs, Bitconnet can never grow and only legit things grow.

  2. people laugh, but it is not a laughing matter when people have worked for that money. Those people had real physical "proof of work" and got burned while trying to improve their lives.

  3. Skydivers say, “extreme pain is a wonderful teacher,” meaning it’s hard to teach someone to stop doing something dangerous until they break their legs doing it. Ponzi participants are the same.

  4. OK, of course I completely agree that bitconnect and davor and similar lending schemes are ponzi schemes. In fact I nodded my head throughout the entire video. That is, until the very end. Stocks are ponzi schemes? Car loans and student loans are ponzi schemes? How so? I might give you a pass on saying stocks are ponzi schemes. After all, in order for you to get your investment out of a stock someone else needs to buy it – that is one of the pillars of a good ponzi scheme. However, unlike outright ponzi schemes a stock actually does have a fair value. At the end of that stock price are assets, cash flow, products, and customers. Sometimes the stock price can be overvalued and sometimes a company goes out of business etc etc. Still I have a hard time saying that equates to a ponzi scheme. Then there are car loans and student loans. I am at a complete loss for how these can be considered ponzi schemes at all. I am fortunate enough to not have student loans. I also do not like car loans and I personally avoid them, paying cash for slightly used cars rather than buying a new one, etc. – but a ponzi scheme? It's a loan, you pay interest and principal. There is no pyramid, no referrals, no hierarchy of people involved, and no promises of any return or of getting rich quick. It's just you and bank and you pay flat interest based on whatever you agreed upon at the beginning.

  5. Funny that you talk about Herbalife like a pyramid scheme only because you watched a couple of Netflix shows about it. Do your own research. Money comes from product selling, if somebody wants their money back they can have 100% of what they invested.
    Bitconnect does not have that, that's why it's a ponzi.

  6. I don't think it's the only way to learn a lesson like this if you're somewhat intelligent and know how to do research? Which, granted, might not apply to too many people, but it's not magic. Not everyone is resistant to learning from the experience of others.

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