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"Critics have claimed it is a Ponzi scheme due to its strictly-limited inflation program, which is set to run until 2140." Anyone who could shed light on this?

"Critics have claimed it is a Ponzi scheme due to its strictly-limited inflation program, which is set to run until 2140." Anyone who could shed light on this? Why would inflation be a Ponzi scheme?

rmc 14y ago
The earlier you get into bitcoins, the easier they were to get or mine. As a result many early adopters have phenomonial amounts of bitcoins. For example in 2010 someone traded 10,000 bitcoins for a pizza on the bitcoin forum. Hence early adopters (with hundreds of thousands of bitcoins) benefit much more from any increase in bitcoins.
kristofferR 14y ago
They're confused, it's deflation that is the issue with Bitcoin - not inflation. Since there never will be more than 21 million Bitcoins in circulation due to how the protocol is coded - as Bitcoin becomes more popular everything will become less expensive (requiring less Bitcoins to buy, making Bitcoins more expensive). While early adopters could easily buy thousands of Bitcoins for "nothing", a single Bitcoin today costs $46.
eru 14y ago
I guess they talk about the strict limits on inflation?
Nursie 14y ago
It's talked about as a Ponzi scheme because the assumption is - - Early adopters hold a lot of coin because it was easy and dirt cheap to do so early on. - The market is based entirely on speculation. - Early adopters make money by pumping the price up and encouraging new people in to the market, then cashing out and absconding. - The value will collapse at some point leaving the early adopters dollar-rich and everyone else screwed This isn't the classic definition of a Ponzi but has some of the hallmarks. I guess the limited inflation part plays into this - as the amount of BTC is limited, if it becomes more widely held and used it has to increase in value, directly enriching those that come in early at the expense of later adopters. I'll admit that's a big part of why I'll never touch it. That and the limited amount means the built in deflation is just (economically speaking) bad anyway.
- cfontes 14y ago
  thanks for the info, in Brazil you don't hear a lot about bitcoins so I didn't know about this "Limited amount" thing and that is a REALLY important info.
  - icebraining 14y ago
    You don't hear a lot about Bitcoins anywhere except the Internet, as far as I know ;) One of the best sources is the Bitcoin wiki, particularly the FAQ[1] and Myths[2] pages. [1]: https://en.bitcoin.it/wiki/FAQ https://en.bitcoin.it/wiki/FAQ [2]: https://en.bitcoin.it/wiki/Myths https://en.bitcoin.it/wiki/Myths
    - Nursie 14y ago
      While those are good, they are obviously in the 'Pro' camp on all those things. For instance the entry on chargebacks basically just says "chargebacks are bad and you need to be careful who you send money to", neglecting to mention that the very point of chargebacks is to enable trusted commerce between parties with no prior trust relationship. The Web-of-Trust is not really a good solution to this as it keeps new players out of the game.
      - icebraining 14y ago
        I disagree it just says that; in fact, I don't think that's the most important thing it says. It also says that - just like CC companies do to USD, EUR, etc - a payment mechanism can be built on Bitcoin, providing chargebacks. It's just not builtin in BTC, much like it's not builtin in any other currency.
        Nursie 14y ago
        I agree that payment mechanisms can indeed be built on bitcoin and it's not built in. Can we stop claiming it's the best payment method evar now?

"Critics have claimed it is a Ponzi scheme due to its strictly-limited inflation program, which is set to run until 2140." Anyone who could shed light on this? Why would inflation be a Ponzi scheme?

rmc 14y ago

The earlier you get into bitcoins, the easier they were to get or mine. As a result many early adopters have phenomonial amounts of bitcoins. For example in 2010 someone traded 10,000 bitcoins for a pizza on the bitcoin forum. Hence early adopters (with hundreds of thousands of bitcoins) benefit much more from any increase in bitcoins.

kristofferR 14y ago

They're confused, it's deflation that is the issue with Bitcoin - not inflation. Since there never will be more than 21 million Bitcoins in circulation due to how the protocol is coded - as Bitcoin becomes more popular everything will become less expensive (requiring less Bitcoins to buy, making Bitcoins more expensive). While early adopters could easily buy thousands of Bitcoins for "nothing", a single Bitcoin today costs $46.

eru 14y ago

I guess they talk about the strict limits on inflation?

Nursie 14y ago

It's talked about as a Ponzi scheme because the assumption is - - Early adopters hold a lot of coin because it was easy and dirt cheap to do so early on. - The market is based entirely on speculation. - Early adopters make money by pumping the price up and encouraging new people in to the market, then cashing out and absconding. - The value will collapse at some point leaving the early adopters dollar-rich and everyone else screwed This isn't the classic definition of a Ponzi but has some of the hallmarks. I guess the limited inflation part plays into this - as the amount of BTC is limited, if it becomes more widely held and used it has to increase in value, directly enriching those that come in early at the expense of later adopters. I'll admit that's a big part of why I'll never touch it. That and the limited amount means the built in deflation is just (economically speaking) bad anyway.

cfontes 14y ago
thanks for the info, in Brazil you don't hear a lot about bitcoins so I didn't know about this "Limited amount" thing and that is a REALLY important info.
- icebraining 14y ago
  You don't hear a lot about Bitcoins anywhere except the Internet, as far as I know ;) One of the best sources is the Bitcoin wiki, particularly the FAQ[1] and Myths[2] pages. [1]: https://en.bitcoin.it/wiki/FAQ https://en.bitcoin.it/wiki/FAQ [2]: https://en.bitcoin.it/wiki/Myths https://en.bitcoin.it/wiki/Myths
  - Nursie 14y ago
    While those are good, they are obviously in the 'Pro' camp on all those things. For instance the entry on chargebacks basically just says "chargebacks are bad and you need to be careful who you send money to", neglecting to mention that the very point of chargebacks is to enable trusted commerce between parties with no prior trust relationship. The Web-of-Trust is not really a good solution to this as it keeps new players out of the game.
    - icebraining 14y ago
      I disagree it just says that; in fact, I don't think that's the most important thing it says. It also says that - just like CC companies do to USD, EUR, etc - a payment mechanism can be built on Bitcoin, providing chargebacks. It's just not builtin in BTC, much like it's not builtin in any other currency.
      - Nursie 14y ago
        I agree that payment mechanisms can indeed be built on bitcoin and it's not built in. Can we stop claiming it's the best payment method evar now?