### id264432800 Ponzi schemes have an inverse network effect > Matt Levine wrote some good stuff (which I can’t link directly) arguing that although lots of crypto projects are Ponzi schemes, that might be good for certain applications. The usual problem with social media is that nobody wants to join new things: it’s pointless to be the fifth user of a new social media site that doesn’t have anyone else you want to talk to, and much easier to just stay on Facebook where your friends are. Ponzi schemes have the exact opposite property: you always want to be one of the first few users, and it’s useless getting in on the same one everyone else is. So social media sites that are also sort of Ponzi schemes might align incentives better than either of those things alone, and that’s what a lot of new crypto apps are. - [View Highlight](https://read.readwise.io/read/01fr78yd3ratepdbc7w62806km) - [[Links for December by Scott Alexander#id264432800 Ponzi schemes have an inverse network effect|View in Vault]]