As the cryptocurrency business attempts to rebound from a protracted period of severe bearishness, it has no shortage of vociferous fans and detractors, like Dr. Nicholas Weaver of The University of California, Berkeley, who expressed scathing comments about the sector.
In a podcast hosted by Rich Goldberg and broadcast on June 26, Dr. Weaver referred to the cryptocurrency market as “a self-assembled Ponzi scam” and “such vapid crap that I can only teach it for the purpose of criticizing it.”
Explaining his position, he emphasized: “Cryptocurrency begins with zero-sum at its core. Therefore, it begins with a paradigm that is not investing but rather betting and gambling. Therefore, it cannot be used for its intended function, namely making payments. In addition, it has systems and characteristics that make it a very negative-sum.”
‘A Ponzi scam utilized for other Ponzi schemes’
In addition, Dr. Weaver highlighted that this implies that every individual who “win” does so “at the price of an equivalent amount of loss somewhere,” and that “the system has inherent inefficiencies that result in billions of dollars being physically wasted every year.” As a result, it resembles nothing other than a pyramid scam.”
In other terms: “Every incoming money is sucked out by someone else. You cannot profit from cryptocurrencies. You succeed on the backs of others. And the only genuine uses inside this broader Ponzi scheme seem to be gaming, unlicensed security, and, surprise, many more Ponzi scams.”
In response to a question from the host about what he means when he states that cryptocurrencies do not function as a payment system, Dr. Weaver said that their value is “constantly fluctuating” and resembles “an epileptic episode.”
According to him, due to the absence of central entities such as banks, a limitation of “three to seven transactions per second worldwide,” and the fact that it requires a Bitcoin transaction to create a lightning network channel and fund it, and if funds ever go to zero, you’ll have to refund the channel, it simply cannot be used for legitimate payments. It solely applies to illegal activities.”
Also Read: Three Arrows Capital Gets A Default Notice For Failing To Make Due Payments
Wallets