Thanks @wingspan. I don’t have any extra comments on that yet. Thank you very much for your voice of support.
Wasn’t “stable value” part of the project from day one? Why invest in a project with a feature that you don’t like?
I really wish we could get away from this “early supporters want to make big money” narrative. Its ridiculous. I invested in Radix in 2013. 2013! I am still here today. You think I’ve been waiting 6 years so that Radix can make me a lot of money and I can go ahead and retire already? Hell no. Radix represents probably 1/200th of my net worth. Like many other Radix investors I made other crypto investments, I diversified in crypto, as well as online and offline businesses for 25 years. Most of us early adopters did and do other things and are ahead of the curve in most of the things we do do. That’s why we were drawn to Radix. When we give feedback its because we are experienced in crypto. And we know a broken model when we see one. It has nothing to do with how much money I expect to make from Radix. Hell, if I break even from Radix one day, I’ll call it a success. My concern and that of others is not for genesis investors, its for the masses coming in stage one. Listen to what we say and stop jumping to unfair and incorrect conclusions about our motives.
No one is against a stable value. But the question is if this can be achieved. The current model doesn’t really achieve it.
Stability is with respect to FIAT meaning the underlying important value is FIAT.
Pmin ensures a minimal value for your holdings.
Let’s consider the following scenario, you invest on day 1, you paid $1000.
In 20 years the market cap is billions, Pmin is 0.9 and your holdings multiplied by Pmin is $200,000.
Sounds amazing right? You are ENSURED to receive $200,000 in the worst possible scenario (even more if you sell above Pmin).
So, what is the issue with this? Well, it’s a zero-sum game, right? We can’t print USD. This means that if you bought in with $1000 and now you have at least $200,000 that means there are many people who are actually at a loss (they bought at Pmax, received no redistribution, meaning they lost 10% the moment they bought in).
So now you can argue that if they hold on long enough and don’t sell and enough new people join - they will break even and even make a profit. Right?
Sounds a little like Pyramid scheme - Wikipedia : “a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. As recruiting multiplies, recruiting becomes quickly impossible, and most members are unable to profit”
When does is this model good? When considering the anarchist point of view which assumes that all economies crash and XRD will be the accepted currency globally. As I hardly believe anyone, especially the team, believe in this point of view - this model isn’t good.
That’s not the worst possible scenario. The market cap could be much less than billions after 20 years. The worst possible scenario is a market cap of zero.
No, if they buy in at Pmax it means the current market price is Pmax. They haven’t lost 10% unless they wait and sell at a value 10% less than Pmax, but why would they?
No, they just have to wait for the next redistribution. After that they can sell at Pmax if that’s still the current market price. Or they can wait longer and receive more.
No, it’s not like a pyramid scheme. In a pyramid scheme you lose 100% the moment you join. Then you HAVE TO recruit more people who end up below you in the pyramid. With the Radix Economic Model you don’t have to personally recruit anyone. There is no one “below you in the pyramid”. Please read the Wikipedia article that you posted a link to.
You know exactly what I meant. I discussed the minimal value of your holdings in the given scenario.
Then following your assessment, if everyone sells then no one is at a loss right? In this system you can only win and there are no losers.
Yes, as I said - they can wait longer for more people to join on-board. However, the time it takes for a new investor to cover the Pmax-Pmin difference grows exponentially with the size of the economy. In a huge economy, new users will see near zero ROI and live with a 20% potential risk.
I am sorry, you are 100% correct. It’s more similar to a Ponzi scheme - Wikipedia , these small nuances are a little confusing but essentially the same concept
No, I don’t know how you came to that conclusion. If everyone sells then the price goes down to Pmin.
Right, it is more attractive to invest early, but then the risk is higher too since Pmin is lower. Later in a huge economy, the point is that we should reach a stable value. Most likely the stable value will not be near Pmax, so you don’t necessarily have a 20% risk.
No, it’s not small nuances. A pyramid scheme is very different from a ponzi scheme and both are very different from the Radix Economic Model. Just follow the links you have posted and you can see it for yourself. In a ponzi scheme you have a fraudster who pretends to have a profitable business. The fraudster “lures investors and pays profits to earlier investors by using funds obtained from more recent investors. The victims are led to believe that the profits are coming from product sales or other means, and they remain unaware that other investors are the source of profits. A Ponzi scheme is able to maintain the illusion of a sustainable business…”
The only thing these three have in common is that there need to be more investments for anyone to make profit, but that’s something we see with the stock market and bitcoin as well. If you can come up with an economic model where people make profit without new investments, then that would be very interesting.
Awesome so we are on the same page.
Now consider this, we are currently trying to lure investors by showing them graphs of how their potential ROI will look like - for instance the he3 model and the spreadsheet. Now these assume a constant influx of new currency into the system, yet ignores the effect on players joining late in the game. As new investors join, the surplus, e.g., the difference between the price they bought in and Pmin is distributed to previous investors.
So we hope people will join under the understanding that if enough people join after them - they will make good ROI.
What I’m trying to say is that this whole economic model is problematic. It tries to appease all parties involved but eventually results in too many potential issues - one of which is that people may view it as a Ponzi scheme.
So by that logic then bitcoin (and all crypto) can be considered a ponzi.
No, because in other non stable coins you can end up with 0 value even if you entered at day 1.
With Radix your minimal value is Pmin * XRD holdings. This can grow higher than your initial investment.
I invested in Radix in 2013. 2013!
Wow… what did you get in return for your money? Tokens? Shares?
Hm. Why is Bitcoin getting accepted by merchants? Not because they were the first adopting it, isnt it? Just the interest of masses brought BTC/Crypto to this point where it is nowadays. Big companies and rich individual that see the financial potential are driving the development by investing fiat to back the development. Besides all small ICO contributors. Why should someone “invest” in something when the price will not rise eventually? Otherwise you can call it better “donateing” or “lending”.
As history showed, it’s often not the better technology which wins. And unfortunately also not idealism, these movements are often taken over by the powerful elite. As crypto is dominated by “banker” not anarchists
In fact crypto and other assets can. A price does not depend on the money flowing in. Because there is no “flow in”. USD ist just transfered to a bank account of another user, no USD is turned into BTC. This is a wrong metaphor commonly used. The value depends on what people think it is wort. This is why any new crypto currency can really print USD, as long as people believe in it. Same for Gold and all other assets which have no real demand (especially those that have nur further value, who is really using/working with Gold nowadays except of investing?? Gold standard is gone since a while). Or if all old people die that were collecting and paying for post stamps… what happens with the value of stamps? It simply disappears… the same way as value can appear.