Why bitcoin is not a pyramid scheme

[PaulConventionWV]

The difference is sustainability. An example of a ponzi scheme is when a person or group of people asks for money for some cause under the condition that they will return it with interest. They may call this an investment. If they take $10 from the first person and another $10 from the second person, they will then take $1 from the second person's contribution and add it to the first person's to pay them back. Then they only have $9, so they must take $2 from the 3rd person's $10 contribution to pay back the 2nd person, and so on in that fashion. The number of people paying into the scheme would have to increase exponentially in order to keep paying back, but it is mathematically impossible to pay everyone back.

Now that you know what a pyramid or ponzi scheme is, the differences are pretty self-explanatory. The mere existence of a core group of early adopters who hype their investment does not make it a pyramid scheme. If that was the case, then you could call Ford or Google a pyramid scheme because there were early adopters who believed in what they were doing. Bitcoin is just as sustainable as any other currency because the funds will never run out like they would in a ponzi scheme, which is DESIGNED specifically to lose money. The whole point is that the people who perpetuate the ponzi scheme run off with the money before they pay off a significant number of people. The early adopters of bitcoin had no such plan because there was always the possibility that a legitimate market would develop.

So those of you who call it a pyramid scheme, you have no idea what you're talking about and you can stop perpetuating that myth now. Bitcoin is no more a ponzi scheme than any other legitimate investment.

[Jordan]

What people were probably trying to say when they said "Ponzi" was that Bitcoin, like silver and gold, is an "investment" that relies on a Greater Fool (http://en.wikipedia.org/wiki/Greater_fool_theory) to acquire them at a higher price some day in the future for "investors" to realize a profit.

[Petar]

What people were probably trying to say when they said "Ponzi" was that Bitcoin, like silver and gold, is an "investment" that relies on a Greater Fool (http://en.wikipedia.org/wiki/Greater_fool_theory) to acquire them at a higher price some day in the future for "investors" to realize a profit.

If bitcoin investment "relies on greater fools" then why is it necessary to mischaracterize it as a "ponzi-scheme"?

Could it be possible that fools are simply relying on slander because they lack any sort of logical point?

[TheGrinch]

What people were probably trying to say when they said "Ponzi" was that Bitcoin, like silver and gold, is an "investment" that relies on a Greater Fool (http://en.wikipedia.org/wiki/Greater_fool_theory) to acquire them at a higher price some day in the future for "investors" to realize a profit.

Was going to say something similar, but kudos on the actual theory.

Calling it a ponzi scheme is mistaken, but to me the concern is like investing in a stock without being sure that the company is viable in the long-term.

Where I have concerns about bitcoin is that as far as I can tell, it's not based on a commodity (or other investment type) that you can be sure people are going to continue to want and support... I mean, yes scarcity could enhance the value of other commodities to back a currency, but it isn't like computing power is going to be tied to bitcoin the way that other commodities like gold can be tied to a currency.

I dunno, I'm having trouble trying to express what I mean, but it just feels too much like the whole thing hinges on society's acceptance like the dollar currently does, rather than gaining acceptance through it's intrinsic value, if that makes sense.

[TheGrinch]

If bitcoin investment "relies on greater fools" then why is it necessary to mischaracterize it as a "ponzi-scheme"?

Could it be possible that fools are simply relying on slander because they lack any sort of logical point?

It could also be that these kind of things are extremely complex, and people frequently confuse ponzi scheme to refer to anything where someone is left holding the bag... It could also be slander of course, but I've seen worse misuses of terms.

[Jordan]

If bitcoin investment "relies on greater fools" then why is it necessary to mischaracterize it as a "ponzi-scheme"?

Could it be possible that fools are simply relying on slander because they lack any sort of logical point?

I wasn't the one to incorrectly label it a ponzi scheme. Either way, "investments" that rely on a ponzi scheme or a greater fool have some similarities because returns come solely from the input of additional investment capital.

I'm sorry the greater fool theory doesn't have a better name. It seems you're stuck on the fact it calls investors fools.

[muh_roads]

The blame here should be placed more on Gox. Bitcoin can't be blamed for the front-end services utilizing it from growing too large for their own britches.

Give it time. Things are still maturing. More exchanges are opening all the time. Rome wasn't built in a day.

[Zippyjuan]

I wasn't the one to incorrectly label it a ponzi scheme. Either way, "investments" that rely on a ponzi scheme or a greater fool have some similarities because returns come solely from the input of additional investment capital.

I'm sorry the greater fool theory doesn't have a better name. It seems you're stuck on the fact it calls investors fools.

With bitcoin, you are really not buying anything. With gold you are getting a metal. With stocks you are getting a share in a company (which can sometimes turn out to be worth nothing). With bitcoin you are getting electronic bits- an answer to a question somebody's computer figured out. The only source of value is perception. When people start to realize this the value will evaporate. Right now it is popular because.... well, frankly because it is popular. That drives the price up- not because the value of the questions solved are worth more but because people think they can make money buying and selling it.

I remember this happening with things like Beenie Babies. They were cute. People started buying them. They became more popular. Then the price started to rise. More people started to buy them- not because they were cute but because they thought they could resell them for more money. Or baseball or basketball cards. I remember Michael Jordan rookie cards going for over $10,000 in mint condition. Now they are considerably less.

[Petar]

I wasn't the one to incorrectly label it a ponzi scheme. Either way, "investments" that rely on a ponzi scheme or a greater fool have some similarities because returns come solely from the input of additional investment capital.

I'm sorry the greater fool theory doesn't have a better name. It seems you're stuck on the fact it calls investors fools.

Holy shit you are incredibly arrogant sometimes.

Just because you are too obstinate to appreciate bitcoin's value that does not mean that everyone who buys or starts using one is a "fool".

It's called the "open market" Jordan, and if bitcoin dramatically rises in value in the long term then the only fools I see are those who are too stubborn to get in early before mass adoption develops.

[Petar]

With bitcoin, you are really not buying anything. With gold you are getting a metal. With stocks you are getting a share in a company (which can sometimes turn out to be worth nothing). With bitcoin you are getting electronic bits- an answer to a question somebody's computer figured out. The only source of value is perception. When people start to realize this the value will evaporate. Right now it is popular because.... well, frankly because it is popular. That drives the price up- not because the value of the questions solved are worth more but because people think they can make money buying and selling it.

I remember this happening with things like Beenie Babies. They were cute. People started buying them. They became more popular. Then the price started to rise. More people started to buy them- not because they were cute but because they thought they could resell them for more money. Or baseball or basketball cards. I remember Michael Jordan rookie cards going for over $10,000 in mint condition. Now they are considerably less.

What you fail to appreciate is the sound-money qualities that are built into BTC, including the ways in which an open-source/PTP community secures its own integrity.

Considering everything that BTC is capable of, as far as sound-money for the digital age is concerned, comparing it to Beanie Babies or Michael Jordan cards is incredibly silly and unimaginative.

[Jordan]

Holy shit you are incredibly arrogant sometimes.

Just because you are too obstinate to appreciate bitcoin's value that does not mean that everyone who buys or starts using one is a "fool".

It's called the "open market" Jordan, and if bitcoin dramatically rises in value in the long term then the only fools I see are those who are too stubborn to get in early before mass adoption develops.

I never said you had to like me.

The theory, which I did not name or think up, is named the "greater fool theory." I'm not calling anyone a fool. That's just what the theory is called.

[Petar]

I never said you had to like me.

The theory, which I did not name or think up, is named the "greater fool theory." I'm not calling anyone a fool. That's just what the theory is called.

Well, it's a pretty stupid and arrogant theory to just arbitrarily apply to bitcoins.

Were the people who bought Ford's cars "greater fools" because they caused the value of Ford stock to rise on the market?

And what about the "greater fools" who continue to place value is FRN's despite QE infinity?

Wait until the economic reality in that whole market finally sets in and then we'll really see who the fools are...

[Jordan]

Maybe more background information is necessary.

There is a very big difference between an investment and a commodity, such as a bitcoin or an ounce of gold or silver.

If I buy a lawnmower, I can use it to mow lawns. Over its useful life, I might mow 100 lawns each year for 5 years. My capital investment is $250, and I charge $10 per lawn. Therefore, this investment makes me $4,750 in pre-tax income.

Gold, silver, or a bitcoin does not produce something on its own. Rather, they sit there, doing nothing. For a bitcoin, silver, or gold to create value for me, someone must agree to pay me more for that bitcoin, silver, or gold than I paid for it. Thus, they rely on a greater fool to make me rich. The phrase "greater fool" is not meant to be offensive. I'm simply referring to the idea that someone has to pay me more for what I bought to generate a beneficial economic outcome for myself.

Note the difference. A lawnmower is an investment because it provides value without requiring me to sell it at a higher price than I paid for it. A bitcoin, silver, or gold is an "investment" only in the sense that someone else will pay me more for it in the future.

[Petar]

Currency is it's own tool.

You can mow a lawn in return for FRN's and by the time Bernanke is done messing with them, you effectively lost 50% of your FRN's.

Gold, Bernanke can't touch in the same way.

Bitcoins, ditto.

[RickyJ]

Gold, silver, or a bitcoin does not produce something on it's own. Rather, they sit there, doing nothing.

You seem to be forgetting that there are practical uses for gold and silver besides just sitting there looking pretty. BitCoin has no uses other than as a currency because it is only electronic digital bits!

[Cowlesy]

I'm just drive-by posting, but doesn't bitcoin have an intangible value in that it's an electronic unit that is more difficult to track than say, paypal? I may be wrong and bitcoins are easy to trace/track, but if it's incrementally more difficult than other forms of payment/trade, then that could be of value (perhaps). Will that value decay over time if more alternatives spring up to do the same thing? I saw somewhere someone suggested it was a bit like Napster with sharing music in that over time, more alternatives popped up due to the demand of the service which lessened the usage/(demand?) of Napster.

[Petar]

I'm just drive-by posting, but doesn't bitcoin have an intangible value in that it's an electronic unit that is more difficult to track than say, paypal? I may be wrong and bitcoins are easy to trace/track, but if it's incrementally more difficult than other forms of payment/trade, then that could be of value (perhaps). Will that value decay over time if more alternatives spring up to do the same thing? I saw somewhere someone suggested it was a bit like Napster with sharing music in that over time, more alternatives popped up due to the demand of the service which lessened the usage/(demand?) of Napster.

Yep, the anonymity is a big part of its intrinsic value. It's pretty anonymous as-is, and about to become even more so. Will it lose value on the open market in relation to competitors? Possible, but I have a feeling it is here to stay. Napster failed because it was centralized. Bit-torrent (decentralized) replaced it, and has been going strong ever since.

[muh_roads]

I'm just drive-by posting, but doesn't bitcoin have an intangible value in that it's an electronic unit that is more difficult to track than say, paypal? I may be wrong and bitcoins are easy to trace/track, but if it's incrementally more difficult than other forms of payment/trade, then that could be of value (perhaps). Will that value decay over time if more alternatives spring up to do the same thing? I saw somewhere someone suggested it was a bit like Napster with sharing music in that over time, more alternatives popped up due to the demand of the service which lessened the usage/(demand?) of Napster.

That's exactly how it works.

People in oppressive countries can wire money to anyone they wish without the government knowing. They just need a PC. Firewalls can't stop it because of the P2P nature of the system. The nodes on the network are random and constantly growing. It isn't centralized and therefore can't be blocked.

What Bitcoin lacks in "intrinsic" value it makes up for in utility. It is best to think of Bitcoin as not just money, but also as a payment processor for the people that easily gets around government control.

It is open-source. Meaning anyone can look at the code to verify if there is anything devious added to new versions. Any competing system that isn't open-source won't be trusted. Anything that anyone tries to do that is actually better than Bitcoin can be assimilated into the Bitcoin code on the next version.

[RickyJ]

That's exactly how it works.

People in oppressive countries can wire money to anyone they wish without the government knowing. They just need a PC. Firewalls can't stop it because of the P2P nature of the system.

Firewalls can stop all traffic, period. I think you meant to say that ISPs can't stop it, and if they want to keep your business that is correct.

[muh_roads]

Firewalls can stop all traffic, period. I think you meant to say that ISPs can't stop it, and if they want to keep your business that is correct.

Yes ISP firewalls I meant to say. They can't anticipate the millions of P2P nodes out there. The internet would need to be entirely shut down.

It won't happen.

[PaulConventionWV]

What people were probably trying to say when they said "Ponzi" was that Bitcoin, like silver and gold, is an "investment" that relies on a Greater Fool (http://en.wikipedia.org/wiki/Greater_fool_theory) to acquire them at a higher price some day in the future for "investors" to realize a profit.

Doesn't make it a ponzi scheme. The investor doesn't necessarily have to be a fool to invest in bitcoin, just as they don't have to be a fool to invest in other legitimate investments.

[PaulConventionWV]

I never said you had to like me.

The theory, which I did not name or think up, is named the "greater fool theory." I'm not calling anyone a fool. That's just what the theory is called.

And like the ponzi scheme, it has absolutely nothing to do with bitcoin.

[PaulConventionWV]

Maybe more background information is necessary.

There is a very big difference between an investment and a commodity, such as a bitcoin or an ounce of gold or silver.

If I buy a lawnmower, I can use it to mow lawns. Over its useful life, I might mow 100 lawns each year for 5 years. My capital investment is $250, and I charge $10 per lawn. Therefore, this investment makes me $4,750 in pre-tax income.

Gold, silver, or a bitcoin does not produce something on its own. Rather, they sit there, doing nothing. For a bitcoin, silver, or gold to create value for me, someone must agree to pay me more for that bitcoin, silver, or gold than I paid for it. Thus, they rely on a greater fool to make me rich. The phrase "greater fool" is not meant to be offensive. I'm simply referring to the idea that someone has to pay me more for what I bought to generate a beneficial economic outcome for myself.

Note the difference. A lawnmower is an investment because it provides value without requiring me to sell it at a higher price than I paid for it. A bitcoin, silver, or gold is an "investment" only in the sense that someone else will pay me more for it in the future.

So basically you're calling all investments, stock market, commodities, etc, a fool's game. Sorry if you feel that way because investing has been around for a long time and it's never going to go away. No matter what you feel about investing in general, bitcoin is just as legitimate as any stock market or commodities investment because it relies on the same value increase via perception that any other investment relies on.

[PaulConventionWV]

You seem to be forgetting that there are practical uses for gold and silver besides just sitting there looking pretty. BitCoin has no uses other than as a currency because it is only electronic digital bits!

A very large percentage of gold's value comes from the fact that it looks pretty and is used to make jewelry.

[Natural Citizen]

What's going to happen is that some useful idiots are going to help turn the 1% into the .01 %. That's all I have to say about it so any rebuttal will go unseen. I'm staying out of bitcoin spew.

[itshappening]

Bitcoin is a clear scam.

The miners are paying a lot of money to acquire equipment to pull off their heist.

WHY are they doing this? Are they doing it for the benefit of humanity? Don't make me laugh.

Where are they getting the money from to acquire this equipment? Not from banks or an IPO. They're unloading periodically by dumping and purchasing new equipment.

We're talking millions of dollars here of capital investment. Hundreds of millions are at stake. Possibly billions!

There are about 20 people on the planet controlling the whole thing.

They're mining the shit out of it (halfway there) and are hyping it and selling to new suckers and entrants.

This will continue until they hit the 20 million or the USG shuts them down.

Either way at the end of it all Bitcoin becomes worthless or near worthless and the suckers have transferred their money to the ingenious miners who then live out the rest of their lives on a Caribbean island.

Bitcoin is very clever but these 20 or so people hijacked it early on, bought them all up at 2 cents and started investing in the mining equipment to perpetuate the scam and keep their grip on it.

No one can compete with the miners. You can't muscle in on their scam. It's all theirs!

They've even set up "mining pools" to combine computing power and give the ordinary joe a shot at mining some bitcoins but of course they're taking a big cut of the action LOL.

These people are very clever and spotted the potential in 2009. They've been doing it since.

Most likely whoever the Satoshi fellow is who wrote it (notice he's anonymous) and a group of his friends are at the top of the chain.

Why would Satoshi want to be anonymous? if it was so ingenious he would come forward or put his name on the application and be heralded the world over and be giving TED talks.

He's anonymous because he's part of a scam, periodically dumping and getting insanely rich.

Happy days.

[Jordan]

So basically you're calling all investments, stock market, commodities, etc, a fool's game. Sorry if you feel that way because investing has been around for a long time and it's never going to go away. No matter what you feel about investing in general, bitcoin is just as legitimate as any stock market or commodities investment because it relies on the same value increase via perception that any other investment relies on.

Oh, FFS. I'm not saying ANYTHING about people who buy bitcoin, gold, or silver. I don't really care how people choose to invest. You guys are so stuck on the name of the "Greater Fool Theory" that you cannot even bother thinking about the concept.

A business (owned outright or via the stock market) has value that is contingent on it producing cash flow in the future that can be returned to the owners. The primarily value of a business is the future cash flows. If a business generates more cash for owners to use, then its value goes up. If it generates less, its value goes down. The point is that you do not have to rely on someone else to pay a higher price for your business than you paid to make money. You can make money from the earnings of the company that can be paid out to you. You do not have to, nor should you, rely on a greater fool to make you money as a business owner.

Conversely, bitcoins are not productive assets. The only way to make money with bitcoin is to sell a bitcoin at a higher price than what you paid for it.

Do you not see the difference?

I can buy McDonald's stock and enjoy the proceeds paid out to me regardless of what anyone else thinks about McDonald's. In fact, I wish everyone would hate it, because then I could buy it for dirt cheap, ignore the foolishness, and get rich from the cash flows from the business. However, if I were to buy a bitcoin, I would have to believe that someone else will see it as having more value than I do.

[enter`name`here]

Bitcoin is a clear scam.

The miners are paying a lot of money to acquire equipment to pull off their heist.

WHY are they doing this? Are they doing it for the benefit of humanity? Don't make me laugh.

Where are they getting the money from to acquire this equipment? Not from banks or an IPO. They're unloading periodically by dumping and purchasing new equipment.

We're talking millions of dollars here of capital investment. Hundreds of millions are at stake. Possibly billions!

There are about 20 people on the planet controlling the whole thing.

They're mining the shit out of it (halfway there) and are hyping it and selling to new suckers and entrants.

This will continue until they hit the 20 million or the USG shuts them down.

Either way at the end of it all Bitcoin becomes worthless or near worthless and the suckers have transferred their money to the ingenious miners who then live out the rest of their lives on a Caribbean island.

Bitcoin is very clever but these 20 or so people hijacked it early on, bought them all up at 2 cents and started investing in the mining equipment to perpetuate the scam and keep their grip on it.

No one can compete with the miners. You can't muscle in on their scam. It's all theirs!

They've even set up "mining pools" to combine computing power and give the ordinary joe a shot at mining some bitcoins but of course they're taking a big cut of the action LOL.

These people are very clever and spotted the potential in 2009. They've been doing it since.

Most likely whoever the Satoshi fellow is who wrote it (notice he's anonymous) and a group of his friends are at the top of the chain.

Why would Satoshi want to be anonymous? if it was so ingenious he would come forward or put his name on the application and be heralded the world over and be giving TED talks.

He's anonymous because he's part of a scam, periodically dumping and getting insanely rich.

Happy days.
Sources please.

[PaulConventionWV]

Bitcoin is a clear scam.

The miners are paying a lot of money to acquire equipment to pull off their heist.

WHY are they doing this? Are they doing it for the benefit of humanity? Don't make me laugh.

Where are they getting the money from to acquire this equipment? Not from banks or an IPO. They're unloading periodically by dumping and purchasing new equipment.

We're talking millions of dollars here of capital investment. Hundreds of millions are at stake. Possibly billions!

There are about 20 people on the planet controlling the whole thing.

They're mining the shit out of it (halfway there) and are hyping it and selling to new suckers and entrants.

This will continue until they hit the 20 million or the USG shuts them down.

Either way at the end of it all Bitcoin becomes worthless or near worthless and the suckers have transferred their money to the ingenious miners who then live out the rest of their lives on a Caribbean island.

Bitcoin is very clever but these 20 or so people hijacked it early on, bought them all up at 2 cents and started investing in the mining equipment to perpetuate the scam and keep their grip on it.

No one can compete with the miners. You can't muscle in on their scam. It's all theirs!

They've even set up "mining pools" to combine computing power and give the ordinary joe a shot at mining some bitcoins but of course they're taking a big cut of the action LOL.

These people are very clever and spotted the potential in 2009. They've been doing it since.

Most likely whoever the Satoshi fellow is who wrote it (notice he's anonymous) and a group of his friends are at the top of the chain.

Why would Satoshi want to be anonymous? if it was so ingenious he would come forward or put his name on the application and be heralded the world over and be giving TED talks.

He's anonymous because he's part of a scam, periodically dumping and getting insanely rich.

Happy days.

You admit it's not a pyramid scheme, though? You can call it whatever you want, but the erroneous labelling as a ponzi scheme is wrong. Everything else you just said is pure speculation. You have no evidence.

[PaulConventionWV]

Oh, FFS. I'm not saying ANYTHING about people who buy bitcoin, gold, or silver. I don't really care how people choose to invest. You guys are so stuck on the name of the "Greater Fool Theory" that you cannot even bother thinking about the concept.

A business (owned outright or via the stock market) has value that is contingent on it producing cash flow in the future that can be returned to the owners. The primarily value of a business is the future cash flows. If a business generates more cash for owners to use, then its value goes up. If it generates less, its value goes down. The point is that you do not have to rely on someone else to pay a higher price for your business than you paid to make money. You can make money from the earnings of the company that can be paid out to you. You do not have to, nor should you, rely on a greater fool to make you money as a business owner.

Conversely, bitcoins are not productive assets. The only way to make money with bitcoin is to sell a bitcoin at a higher price than what you paid for it.

Do you not see the difference?

I can buy McDonald's stock and enjoy the proceeds paid out to me regardless of what anyone else thinks about McDonald's. In fact, I wish everyone would hate it, because then I could buy it for dirt cheap, ignore the foolishness, and get rich from the cash flows from the business. However, if I were to buy a bitcoin, I would have to believe that someone else will see it as having more value than I do.

I see the difference, but nonetheless, currency trading has been around for a long time. If you call bitcoin worthless, then you must call every currency worthless. For paper, this may be true, but even metals depend on what value people place on them. If you invest in gold as a store of value, you must depend on someone paying a higher price for for the gold than what you bought it for. It all depends on the market, and there's no shame in currency speculation like you seem to be implying. It's never a sure thing, just like the stock market is never a sure thing. Anything that is used as currency sees its value go up specifically because it is used as currency. Its intrinsic value doesn't increase. The supply doesn't even have to change. If something becomes used widely as currency, its value will go up, and speculation is a part of any new currency or new market.

[talkingpointes]

What you fail to appreciate is the sound-money qualities that are built into BTC, including the ways in which an open-source/PTP community secures its own integrity.

Considering everything that BTC is capable of, as far as sound-money for the digital age is concerned, comparing it to Beanie Babies or Michael Jordan cards is incredibly silly and unimaginative.

But it works when you lack knowledge the fundamental processes with which the currency is created, and sustained. And when other people that know even less read the post they can relate to the funny items and completely dismiss the issue altogether.

[talkingpointes]

The difference in a bubble and ponzi scheme, is that bitcoin might be over-inflated. But that isn't the problem of bitcoin, it can only benefit from that. That shows the larger problem of people looking for alternative currency for carry trades. Of all people Jordan should know this. They only way for btc to crash is if EVERYONE left at one time, but even then that would lower the price for the bulls.

A ponzi scheme is isolated, and usually clandestine. This is wide open and open source. I cannot see the inherent value in btc based on how we generally value things, but I cannot for metals either outside of industrial use. But that doesn't matter - we all know paper is trash. But how many here work for anything other than paper ?

[itshappening]

The difference in a bubble and ponzi scheme, is that bitcoin might be over-inflated. But that isn't the problem of bitcoin, it can only benefit from that. That shows the larger problem of people looking for alternative currency for carry trades. Of all people Jordan should know this. They only way for btc to crash is if EVERYONE left at one time, but even then that would lower the price for the bulls.

A ponzi scheme is isolated, and usually clandestine. This is wide open and open source. I cannot see the inherent value in btc based on how we generally value things, but I cannot for metals either outside of industrial use. But that doesn't matter - we all know paper is trash. But how many here work for anything other than paper ?

The miners are producing the new bitcoins, hoarding them then dumping them to new suckers.

They have a complete monopoly on bitcoin production.

It has similar characteristics to a Ponzi scheme although I just think it's just a clever scheme.

The miners are getting very rich.

Notice they're investing MILLIONS of PRIVATE capital. Why I wonder?

Because there's hundreds of millions at stake and they want to grab it all before the scam comes to an abrupt end (when there's nothing left to mine or when the USG shuts them down by taking out the exchanges)

[itshappening]

You admit it's not a pyramid scheme, though? You can call it whatever you want, but the erroneous labelling as a ponzi scheme is wrong. Everything else you just said is pure speculation. You have no evidence.

I dont know what it is... it's just some clever scheme that Satoshi has come up with and he and his friends are taking advantage and making serious bank by selling their coins to new entrants. Then they mine more and continue the scam.

Why is he anonymous? if it was so great he would be oiut front and center selling it and doing TED talks and being heralded as a great?

No satoshi keeps out of the way because he's participating in a scam and accumulating $ .

[FSP-Rebel]

Why is he anonymous? if it was so great he would be oiut front and center selling it and doing TED talks and being heralded as a great?

No satoshi keeps out of the way because he's participating in a scam and accumulating $ .
Him and the other originators stated goal was to formulate a new currency to operate outside the bankers' boundaries. So, it's not surprising that he doesn't want to be the focal point of the key method to destabilize fiat currencies worldwide. And, the miners don't make out nearly as well as you think they do. They typically work in teams to mine blocks and end up with fractions of the overall block.

[thoughtomator]

Whether Bitcoin is a pyramid scheme or not per se is not really the point. The point is that it has nothing but confidence to back it, meaning its natural value is zero and it is only a matter of time before it reaches that number.

[Jordan]

I see the difference, but nonetheless, currency trading has been around for a long time. If you call bitcoin worthless, then you must call every currency worthless. For paper, this may be true, but even metals depend on what value people place on them. If you invest in gold as a store of value, you must depend on someone paying a higher price for for the gold than what you bought it for. It all depends on the market, and there's no shame in currency speculation like you seem to be implying. It's never a sure thing, just like the stock market is never a sure thing. Anything that is used as currency sees its value go up specifically because it is used as currency. Its intrinsic value doesn't increase. The supply doesn't even have to change. If something becomes used widely as currency, its value will go up, and speculation is a part of any new currency or new market.

At no point have I called it worthless, and of course currency trading has been around for a long time. Like traditional currency trading, bitcoin is also a zero-sum game, which - hey, we're finally going full-circle - is the reason why people falsely call it a ponzi scheme. Ponzi schemes are also zero-sum games.

I'm glad you finally recognize that in order for "investors" to make money on gold or bitcoin, someone else has to agree that they have a greater value than the price you paid. This thread has run its course.

[MelissaWV]

Whether Bitcoin is a pyramid scheme or not per se is not really the point. The point is that it has nothing but confidence to back it, meaning its natural value is zero and it is only a matter of time before it reaches that number.

Which is actually the natural problem with all created currencies, even the ones that have physical backing (the gold or whatever backing it may lose its value under several circumstances). It's strange that so many are ignoring this in their BTC fever. They are investing in something as crazy as FRNs, but without the bailout potential.

+rep for you on this one.

[evilfunnystuff]

Which is actually the natural problem with all created currencies, even the ones that have physical backing (the gold or whatever backing it may lose its value under several circumstances). It's strange that so many are ignoring this in their BTC fever. They are investing in something as crazy as FRNs, but without the bailout potential.

+rep for you on this one.

BTC has several advantages over the USD.

1 The supply is predictable no one can arbitrarliy fire up the printing presses

2 You can wire it across the world instantly, for pennies, and no one can stop it.

3 More anonymous for electronic transactions.

4 Can't be taxed unless you use it to buy USD.

Some haters seem jealous of the miners/payment processors. These people deserve a reward for investing cash and time to process the payments, and keep this the strongest most secure computing network the world has ever seen, ensuring against counterfeiting/double spending.

If mining is so easy and profitable why not get in the game, I don't think you realize quite how difficult and competitive it is, nor the value that resource provides for BTC economy.

Also some say when there are no more coins left to mine they will split, as there would be no motivation to mine. That show ignorance of the system, at that point miners still earn transaction fees.

If people are gonna try to be avid BTC detractors, they should do their due diligence and understand the system before leading a crusade against it.:toady:

[LibertyRevolution]

BTC has several advantages over the USD.

1 The supply is predictable no one can arbitrarliy fire up the printing presses

2 You can wire it across the world instantly, for pennies, and no one can stop it.

3 More anonymous for electronic transactions.

4 Can't be taxed unless you use it to buy USD.


So your saying it is used to to wire money anonymously across the globe and for tax evasion.
Yep, those were 2 of the 4 reason I gave in the other thread why the USG will shut it down.
You will be locked out your money like the online gamblers. So yeah, I think investing in bitcoins would be foolish.

[PaulConventionWV]

I dont know what it is... it's just some clever scheme that Satoshi has come up with and he and his friends are taking advantage and making serious bank by selling their coins to new entrants. Then they mine more and continue the scam.

Why is he anonymous? if it was so great he would be oiut front and center selling it and doing TED talks and being heralded as a great?

No satoshi keeps out of the way because he's participating in a scam and accumulating $ .

You seem to have a problem with people making money. Why does it matter if anyone makes money? Don't you think Ford and the people in his little circle made a lot of money when he invented the automobile? They can't crash the market all the time. There's a limit to the number of times you can crash the market by yourself.

[PaulConventionWV]

Whether Bitcoin is a pyramid scheme or not per se is not really the point. The point is that it has nothing but confidence to back it, meaning its natural value is zero and it is only a matter of time before it reaches that number.

You don't think people value anonymity? Decentralization? Why must value always be dependent on something physical? Just because it's what we've always known, that doesn't mean it's the way it always has to be.