Amid the Chinese language authorities persevering with to rejoice the huge decline of cryptocurrency markets this 12 months, one key native blockchain knowledgeable has referred to crypto as a Ponzi scheme.
Yifan He, CEO of Purple Date Expertise — a serious tech agency concerned within the improvement of China’s main blockchain undertaking 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 Folks’s Every day on Sunday, the piece refers to personal cryptocurrencies because the “greatest Ponzi scheme in human historical past.”
The creator talked about the Terra network’s collapse, with the native token Terra (LUNA) — now generally known as Luna Traditional (LUNC) — crashing 99% and the algorithmic TerraUSD Traditional (USTC) stablecoin losing its 1:1 peg worth to the USA greenback in Could 2022. He additionally criticized the more and more fashionable digital forex idea generally known as X-to-earn, referring to move-to-earn or play-to-earn initiatives, calling the mannequin a “phishing technique.”
He’s not a fan of Bitcoin or any related cryptocurrencies himself as properly. “Presently, all unregulated cryptocurrencies together with Bitcoin are Ponzi schemes primarily based on my understanding, simply completely different threat ranges primarily based in the marketplace caps and variety of customers,” He stated in a press release to Cointelegraph on Monday.
The BSN chair added that he had not had any cryptocurrency pockets or associated belongings ever: “I don’t contact them and gained’t contact them sooner or later even when they develop into regulated as a result of I do not contemplate that they’ve any worth in any respect.”
In line with He, governments like El Salvador — which opted to adopt BTC as legal tender — “critically want fundamental financing coaching.” “In any other case, they put total international locations in danger except their authentic intentions have 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 plenty of different crypto initiatives, He nonetheless believes that some a part of the crypto market may very well be doing simply positive 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 belongings. As soon as they’re absolutely regulated, they’re positive.”
He beforehand talked in favor of stablecoins in 2020. The chief as soon as planned to integrate stablecoin payments into BSN as of 2021. The plan was ultimately scrapped on account of China’s hostility to crypto.
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. In line with information from the Cambridge Bitcoin Electrical energy Consumption Index, China was the second largest BTC mining hash rate producer after the USA as of January 2022.