Amid the Chinese language authorities persevering with to have a good time the large decline of cryptocurrency markets this yr, one key native blockchain knowledgeable has referred to crypto as a Ponzi scheme.
Yifan He, CEO of Pink Date Expertise — a serious tech agency concerned within the growth of China’s main blockchain challenge referred to as the Blockchain Service Community (BSN) — has penned a brand new article devoted to numerous sorts of cryptocurrencies and their supposed Ponzi-like nature.
Published within the native newspaper The Individuals’s Day by day on Sunday, the piece refers to personal cryptocurrencies because the “largest Ponzi scheme in human historical past.”
The writer talked about the Terra network’s collapse, with the native token Terra (LUNA) — now often called Luna Traditional (LUNC) — crashing 99% and the algorithmic TerraUSD Traditional (USTC) stablecoin losing its 1:1 peg worth to america greenback in Could 2022. He additionally criticized the more and more well-liked digital forex idea often called X-to-earn, referring to move-to-earn or play-to-earn initiatives, calling the mannequin a “phishing technique.”
The BSN chair additionally talked about some well-known criticism of Bitcoin (BTC) by Microsoft founder Bill Gates and legendary investor Warren Buffett.
He’s not a fan of Bitcoin or any comparable cryptocurrencies himself as effectively. “At present, all unregulated cryptocurrencies together with Bitcoin are Ponzi schemes based mostly on my understanding, simply completely different threat ranges based mostly in the marketplace caps and variety of customers,” He stated in an announcement to Cointelegraph on Monday.
The BSN chair added that he had not had any cryptocurrency pockets or associated property ever: “I don’t contact them and received’t contact them sooner or later even when they change into regulated as a result of I do not contemplate that they’ve any worth in any way.”
Based on He, governments like El Salvador — which opted to adopt BTC as legal tender — “significantly want primary financing coaching.” “In any other case, they put total nations in danger until their unique intentions had been to construct state-owned crypto buying and selling platforms and rip-off off on their residents,” the exec instructed Cointelegraph.
Whereas criticizing Bitcoin and lots of different crypto initiatives, He nonetheless believes that some a part of the crypto market may very well be doing simply advantageous if it’s correctly regulated. Money-backed stablecoins like Tether (USDT) and Circle’s USD Coin (USDC) shouldn’t be considered as Ponzi-like schemes, the BSN chair stated, stating:
“USDC or USDT are payment-related currencies, not speculative property. As soon as they’re totally regulated, they’re advantageous.”
He beforehand talked in favor of stablecoins in 2020. The manager as soon as planned to integrate stablecoin payments into BSN as of 2021. The plan was finally scrapped on account of China’s hostility to crypto.
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The information comes amid the Chinese language authorities capitalizing on the continued crypto market crash to justify its a number of bans on the trade. The newest coordinated ban was enacted in September 2021, with a number of Chinese language authorities taking motion to ban all types of crypto transactions within the nation.
Regardless of all efforts, China continued to be a dominant Bitcoin mining provider worldwide. Based on knowledge from the Cambridge Bitcoin Electrical energy Consumption Index, China was the second largest BTC mining hash rate producer after america as of January 2022.
