Wondering if I can bump this thread as more and more MN coins are launched.
From what I've just researched on this topic this connection is made because:
1. You buy in and start a MN, like a PS.
2. You generate profits passively, increasing your passive income and MN worth as more people buy in and hold.
3. Like a PS, once:
- so many people buy in and the rewards/MN are so high
- additional MN aren't needed for the network
--> MN holders will sell and crash the price/network as few MN's exist to support the network.
4. The price and rewards are highly dependant on getting people to buy in and hold MN.
5. Those that buy in first make the most, and those that buy in last get screwed, like in a PS.
So, I see two analyses that could point toward NOT a PS.
1. The % of coins locked up in all MN of a coin is low relative to total supply. That would mean MN aren't running the show. I wonder what % is acceptable, if this is correct?
2. There is financial/economic incentive to not sell like described above.
Let's look at how ALQO's economics factor into this. This project is designed to result in a specific range of number of MN, therefore a constantly increasing number of MN shouldn't happen due to the coin economics, due to what they call "Libra Effect". IF they successfully launch their exchange called Bitfineon, investors will have equal incentives to either:
1. Run a MN or
2. Stake in their wallets or
3. Stake in Bitfineon
Although it sounds like #2 is easiest and everybody will choose that, the reward payouts adjust depending on the share of these 3. So, if everybody rushes to do #2 and the split is 10/80/10, the reward payouts to 1/3 will be super high, causing investors to shift their coins there, and thus shifting the overall balance. It is intended to result in 33/33/33 share of those 3.
Therefore, for a project like this, I don't see the pyramid scheme connection? Am I missing something?