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Fine, I clicked and read a couple of those. I like the 3rd one that defines a ponzi scheme: "A Ponzi scheme, or "ponzi" for short, is a type of investment fra

by krupan 3y ago

Fine, I clicked and read a couple of those. I like the 3rd one that defines a ponzi scheme: "A Ponzi scheme, or "ponzi" for short, is a type of investment fraud with these five features: 1 People invest into it because they expect good profits, and 2. that expectation is sustained by such profits being paid to those who choose to cash out. However, 3. there is no external source of revenue for those payoffs. Instead, 4. the payoffs come entirely from new investment money, while 5. the operators take away a large portion of this money." This is great because points 3 and 5 are trivially proved false for Bitcoin and shows that is no more a ponzi scheme than stocks or real estate or any other common investment. Thank you for the insight.

krupan 3y ago
UPDATE: you also have to love this amazing piece of either ignorance or straight up lying in the later part of the article: "By that definition the USD is a ponzi. No, national currencies too fail to fit the definition, because people do not 'invest' in them with the expectation of gain..."
djaro 3y ago
Really? What external payoff is there for Bitcoin, besides other people investing in Bitcoin? And gas fees means a large portion of money goes towards the "operators" (miners) of the network.
- krupan 3y ago
  In the article the author claims stocks have an "external" pay off because stock is tied to a company that sells products and if the company does well they might pay shareholders dividends or do a stock buyback. I can accept that a dividend is an "external" source of income, but those are not guaranteed in the stock market by any means. Most people buy stock in hopes that the price will rise due to simple supply and demand (a company buyback is just more demand). If that counts as external then Bitcoin should be covered too, especially since the overall supply of Bitcoin is guaranteed not to rise over a set amount. That's not the case with any other investment in the world (except maybe real estate, depending on how you look at it) Bitcoin miners do collect rewards and fees (but not "gas" because that's an ethereum thing not a Bitcoin thing) and Miners are a key part of the operation of Bitcoin, but they are not "the operators" of Bitcoin in the same sense that Bernie Madoff was the operator of his fund. Anyone who wants to can become a miner, no permission necessary. Miners do not actively direct the activity of Bitcoin, they cannot change the rules (especially about how much revenue they collect), allow or disallow certain people from participating (and stay profitable), or anything like that. There are other cryptocurrencies (most of them actually) where the developers of the currency act a lot more like Bernie Madoff type operators. They own a vast majority of the tokens and the source code that runs the network and they make executive decisions about operations, supply of tokens, protocol (code) changes, etc. That is why those of us who have been around a while point out that Bitcoin is the only one that is not a scam.
chx 3y ago
> This is great because points 3 and 5 are trivially proved false for Bitcoin #3 is trivially proven true. If there were no transaction fees and you rolled back all Bitcoin transactions ever made , you would end up with a zero. This is in stark contrast to a stock where you'd end up with the dividends. #5 is perhaps better put as "operators take away some portion of this money" and that's what transaction fees are. Calling it large indeed weakens the argument -- but doesn't prove it false.

by krupan 3y ago

krupan 3y ago

UPDATE: you also have to love this amazing piece of either ignorance or straight up lying in the later part of the article: "By that definition the USD is a ponzi. No, national currencies too fail to fit the definition, because people do not 'invest' in them with the expectation of gain..."

djaro 3y ago

Really? What external payoff is there for Bitcoin, besides other people investing in Bitcoin? And gas fees means a large portion of money goes towards the "operators" (miners) of the network.

krupan 3y ago
In the article the author claims stocks have an "external" pay off because stock is tied to a company that sells products and if the company does well they might pay shareholders dividends or do a stock buyback. I can accept that a dividend is an "external" source of income, but those are not guaranteed in the stock market by any means. Most people buy stock in hopes that the price will rise due to simple supply and demand (a company buyback is just more demand). If that counts as external then Bitcoin should be covered too, especially since the overall supply of Bitcoin is guaranteed not to rise over a set amount. That's not the case with any other investment in the world (except maybe real estate, depending on how you look at it) Bitcoin miners do collect rewards and fees (but not "gas" because that's an ethereum thing not a Bitcoin thing) and Miners are a key part of the operation of Bitcoin, but they are not "the operators" of Bitcoin in the same sense that Bernie Madoff was the operator of his fund. Anyone who wants to can become a miner, no permission necessary. Miners do not actively direct the activity of Bitcoin, they cannot change the rules (especially about how much revenue they collect), allow or disallow certain people from participating (and stay profitable), or anything like that. There are other cryptocurrencies (most of them actually) where the developers of the currency act a lot more like Bernie Madoff type operators. They own a vast majority of the tokens and the source code that runs the network and they make executive decisions about operations, supply of tokens, protocol (code) changes, etc. That is why those of us who have been around a while point out that Bitcoin is the only one that is not a scam.

chx 3y ago

> This is great because points 3 and 5 are trivially proved false for Bitcoin #3 is trivially proven true. If there were no transaction fees and you rolled back all Bitcoin transactions ever made , you would end up with a zero. This is in stark contrast to a stock where you'd end up with the dividends. #5 is perhaps better put as "operators take away some portion of this money" and that's what transaction fees are. Calling it large indeed weakens the argument -- but doesn't prove it false.