Similar to the SEC’s Howey Test except for the last criteria, I proposed the Madoff test:
1. An investment of money
2. In a common enterprise
3. With the expectation of profit
4. To be derived from the funds contributed by new investors
Matt Levine’s witty and engaging ‘The Crypto Story’ ultimately fails to grasp crypto’s fatal flaw. He comes perilously close to revelation, but frustratingly remains mired in illusions and disinformation that have been internalized by the public.
I have assumed intent based primarily on what has been designed and built, as opposed to the more credulous method of assuming intent based on what someone has said anonymously on the internet. If we are to assume intent at all, we should at the very least be skeptical of those whose actions can only be defended by a claim to ignorance.
In actuality, categorizing the mother of all crypto as Ponzi or pyramid is an attempt to fit a square peg into a round hole. Bitcoin is neither, it belongs to a new genus of fraud. It has several specific qualities that make it unique, and many others that it shares with known forms of investment fraud, notably Ponzi and pyramid schemes. By carefully examining Bitcoin’s construction and observing its relations with other forms of investment fraud, we can better understand the inner workings of the Nakamoto scheme.
An Introduction to CrossConnect & The Three Concerns I am not entirely sure how I arrived at this point. After fifteen years of working in tech I was tired of building for others and wanted to focus on my own projects. I resigned from my position just in time to miss the Great Work-From-Homenning of …
Decentralizing Control — The Future of Digital Spaces Read More »