Amid the Chinese language authorities persevering with to have fun the huge decline of cryptocurrency markets this 12 months, one key native blockchain skilled has referred to crypto as a “Ponzi scheme.”
Yifan He, CEO of Crimson Date Know-how, a serious tech agency concerned within the improvement of China’s main blockchain venture, the Blockchain Service Community (BSN), has penned a brand new article devoted to varied sorts of cryptocurrencies and their supposed Ponzi-like nature.
Published within the native newspaper The Folks’s Day by day on June 26, the piece refers to personal cryptocurrencies because the “greatest Ponzi scheme in human historical past.”
The writer talked about the Terra community’s collapse, with the native token LUNA crashing 99% and the algorithmic UST stablecoin shedding its 1:1 peg worth to the U.S. greenback in Might 2022. He additionally criticized the more and more in style digital foreign money idea generally known as 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 Invoice Gates and legendary investor Warren Buffett.
He isn’t a fan of Bitcoin or any related cryptocurrencies himself as nicely. “Presently all unregulated cryptocurrencies together with Bitcoin are Ponzi schemes based mostly on my understanding, simply totally different danger 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 do not contact them and will not contact them sooner or later even when they grow to be regulated as a result of I do not think about that they’ve any worth in any way.”
In keeping with He, governments like El Salvador — which opted to undertake BTC as authorized tender — “critically want primary financing coaching.” “In any other case, they put complete international locations in danger until their unique intentions have been to construct state-owned crypto buying and selling platforms and rip-off off on their residents,” the exec advised Cointelegraph.
Whereas criticizing Bitcoin and plenty of different crypto initiatives, He nonetheless believes that some a part of the crypto market might be doing simply positive if it’s correctly regulated. Money-backed stablecoins like Tether (USDT) and Circle’s USD Coin (USDC) shouldn’t be seen 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 positive.”
He beforehand talked in favor of stablecoins in 2020. The manager as soon as deliberate to combine stablecoin funds into BSN as of 2021. The plan was ultimately scrapped as a consequence of China’s hostility to crypto.
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The information comes amid the Chinese language authorities capitalizing on the continuing crypto market crash to justify its a number of bans on the trade. The most recent coordinated ban was enacted in September 2021, with a number of Chinese language authorities taking motion to ban every kind of crypto transactions within the nation.
Regardless of all efforts, China continued to be a dominant Bitcoin mining provider worldwide. In keeping with knowledge from the Cambridge Bitcoin Electrical energy Consumption Index, China was the second largest BTC mining hash price producer after america as of January 2022.
