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Bitcoin may or may not intentionally be a Ponzi scheme. But that doesn't matter, because functionally, there is no difference between an intentional Ponzi sche

Bitcoin may or may not intentionally be a Ponzi scheme. But that doesn't matter, because functionally, there is no difference between an intentional Ponzi scheme and Bitcoin. Bitcoin trading is a negative-sum game. All winning that anyone gets comes out of the pockets of newer investors. There is no net inflow of value or money that could cover the gains people make trading, other than the money being put in by other people. There is a net outflow of money, in the form of trading and mining fees, but there is no inflow. So functionally, with Bitcoin, old entrants are paid off with the money invested by newer entrants. This is exactly how a Ponzi scheme works. Again, it may not be intentional, but it works the same nonetheless.

dboreham 6y ago
Bitcoin is as much or as little a ponzi scheme as things like the US dollar.
- user-the-name 6y ago
  Absolute nonsense.
  - nocommentguy 6y ago
    If we look strictly at present mechanisms (ignoring the fact that the definition of the dollar could be changed as it has several times in the past), the dollar is much closer to a Ponzi scheme than Bitcoin is.
    - user-the-name 6y ago
      Again: Absolute nonsense.
      - nocommentguy 6y ago
        You keep saying that but increasingly more and more people are wisening up to what the central bankers have pulled off and you calling it nonsense won’t change the mathematics
- haram_masala 6y ago
  Bitcoin is in some ways preferable, since you’re not subjected to violence if you choose not to participate in it.
  - mumblemumble 6y ago
    I think you've made a distinction without a difference. Bitcoin assets, and income that is denominated in Bitcoin, is every bit as taxable under US law. It's true that attempting to conduct your entire financial life in Bitcoin won't save you from receiving tax bills that are denominated in dollars. I think your more immediate problem, though, would be that it's probably impossible for someone living in the US to participate in Bitcoin without owing someone a bill that they will expect to be paid in USD. It's difficult to transact Bitcoin without Internet access, for example. And that'll get you long before the IRS sends police to knock on your door.
- karpour 6y ago
  This is a comment someone who doesn't understand how Bitcoin fundamentally works would write. Just because people like to call it a cryptocurrency it does not have much in common with the US Dollar.
shawnz 6y ago
That's still not a Ponzi scheme unless you are also lying to investors by telling them that the returns are coming from some kind of business venture or something. Investors willingly speculating on commodities because they think they will rise isn't a Ponzi scheme.
- graeme 6y ago
  The possible ponzi is people claiming Bitcoin will replace the existing financial system due to its intrinsic superior qualities and will go to $1 million and beyond. The HODLers don’t believe they are merely speculating. Of course that could be true, and people saying it may well believe it. Ponzi believed his international reply coupon scheme would actually pay out. So to some extent it will only be proveable in hindsight.
  - shawnz 6y ago
    That's not a Ponzi scheme. Misleading investors about the potential of a technology isn't a Ponzi scheme. You have to mislead them about the origin of the returns they are getting.
    - graeme 6y ago
      If the technology in fact has no such potential I fail to see the distinction. Particularly when the actual mechanism of raising value for early investors is convincing more to come in based on that narrative, but old investors can only cash out from new ones.
      - shawnz 6y ago
        The distinction is that any investor can form their own opinion about the technology equally well. We don't, and can't dictate to investors what technologies they ought to consider worth investing in. The mechanism you are describing is the mechanism by which every speculative investment works. That's not what identifies a Ponzi scheme. In fact it specifically can't be a Ponzi scheme if the old investors are aware that the returns are coming from new investors.
mumblemumble 6y ago
Gold works the same way: the mining of new gold creates a downward pressure on the value of existing gold. Dilution is not the same thing as fraud. USD also has some similar effects at play. But inflation is also not fraud.
- user-the-name 6y ago
  Whataboutism.

dboreham 6y ago

Bitcoin is as much or as little a ponzi scheme as things like the US dollar.

user-the-name 6y ago
Absolute nonsense.
- nocommentguy 6y ago
  If we look strictly at present mechanisms (ignoring the fact that the definition of the dollar could be changed as it has several times in the past), the dollar is much closer to a Ponzi scheme than Bitcoin is.
  - user-the-name 6y ago
    Again: Absolute nonsense.
    - nocommentguy 6y ago
      You keep saying that but increasingly more and more people are wisening up to what the central bankers have pulled off and you calling it nonsense won’t change the mathematics
haram_masala 6y ago
Bitcoin is in some ways preferable, since you’re not subjected to violence if you choose not to participate in it.
- mumblemumble 6y ago
  I think you've made a distinction without a difference. Bitcoin assets, and income that is denominated in Bitcoin, is every bit as taxable under US law. It's true that attempting to conduct your entire financial life in Bitcoin won't save you from receiving tax bills that are denominated in dollars. I think your more immediate problem, though, would be that it's probably impossible for someone living in the US to participate in Bitcoin without owing someone a bill that they will expect to be paid in USD. It's difficult to transact Bitcoin without Internet access, for example. And that'll get you long before the IRS sends police to knock on your door.
karpour 6y ago
This is a comment someone who doesn't understand how Bitcoin fundamentally works would write. Just because people like to call it a cryptocurrency it does not have much in common with the US Dollar.

shawnz 6y ago

That's still not a Ponzi scheme unless you are also lying to investors by telling them that the returns are coming from some kind of business venture or something. Investors willingly speculating on commodities because they think they will rise isn't a Ponzi scheme.

graeme 6y ago
The possible ponzi is people claiming Bitcoin will replace the existing financial system due to its intrinsic superior qualities and will go to $1 million and beyond. The HODLers don’t believe they are merely speculating. Of course that could be true, and people saying it may well believe it. Ponzi believed his international reply coupon scheme would actually pay out. So to some extent it will only be proveable in hindsight.
- shawnz 6y ago
  That's not a Ponzi scheme. Misleading investors about the potential of a technology isn't a Ponzi scheme. You have to mislead them about the origin of the returns they are getting.
  - graeme 6y ago
    If the technology in fact has no such potential I fail to see the distinction. Particularly when the actual mechanism of raising value for early investors is convincing more to come in based on that narrative, but old investors can only cash out from new ones.
    - shawnz 6y ago
      The distinction is that any investor can form their own opinion about the technology equally well. We don't, and can't dictate to investors what technologies they ought to consider worth investing in. The mechanism you are describing is the mechanism by which every speculative investment works. That's not what identifies a Ponzi scheme. In fact it specifically can't be a Ponzi scheme if the old investors are aware that the returns are coming from new investors.

mumblemumble 6y ago

Gold works the same way: the mining of new gold creates a downward pressure on the value of existing gold. Dilution is not the same thing as fraud. USD also has some similar effects at play. But inflation is also not fraud.

user-the-name 6y ago
Whataboutism.