On the FT’s Alphaville blog, Izabella Kaminska points to a paper by Italian academics arguing that the Ethereum technology tends to incubate Ponzi schemes. The uniqueness of the “smart Ponzi” is its capacity to protect the identity of the initiator but also its ability to persist even after being exposed. Since contracts are unmodifiable and thus unstoppable there is no central authority to terminate the execution of the scheme or force the initiator to refund victims. What’s more, the inability to shut it down means victims can be led to believe the scheme will last forever.
Topics:
Dirk Niepelt considers the following as important: Blockchain, Crime, Distributed ledger, Ethereum, Notes, Ponzi game
This could be interesting, too:
Dirk Niepelt writes SNB Annual Report
Dirk Niepelt writes Banks and Privacy, U.S. vs Canada
Dirk Niepelt writes Bank of England CBDC Academic Advisory Group
Dirk Niepelt writes Panel on “Will the digital euro take off?,” CEPR, 2023
On the FT’s Alphaville blog, Izabella Kaminska points to a paper by Italian academics arguing that the Ethereum technology tends to incubate Ponzi schemes.
The uniqueness of the “smart Ponzi” is its capacity to protect the identity of the initiator but also its ability to persist even after being exposed. Since contracts are unmodifiable and thus unstoppable there is no central authority to terminate the execution of the scheme or force the initiator to refund victims. What’s more, the inability to shut it down means victims can be led to believe the scheme will last forever.