6 ms·

Greatest pyramid scheme ever.

by treelovinhippie 14y ago

efnx 14y ago
Can you explain why?
- antiscam 14y ago
  I'll give it a go. The early distribution of bitcoins seems to have been enough to motivate lots of relatively early adopters to promote it aggressively, maybe out of ideology or maybe just out of greed. Their claims, which fueled the recent speculative frenzy, have always been that Bitcoin would have a continuous, exponential growth against all other currencies. "It always goes up." "Get in before it's too late." I can see how relatively small amounts of money could be invested into Bitcoins as speculation or just play. Several tens of millions of dollars have presumably been transferred to Bitcoin holders so far, in the aggregate. But many people are investing on claims that a single bitcoin will eventually be worth $10,000, $100,000, or $1 million. For that to happen, the world would have to transfer massive wealth to the early adopters, as this early adopter explains: https://bitcointalk.org/index.php?topic=175833.msg1830933#msg1830933 https://bitcointalk.org/index.php?topic=175833.msg1830933#ms... Why would anyone do that rather than setting up an alternative? Massive delusions are possible, but it seems far more likely that the claim that a bitcoin will be worth $10,000 will start to seem ludicrous to everyone, as it obviously is. After that, why would anyone buy a bitcoin for $100, or even $30 or $10? There's little practical use for them other than drugs or illegal gambling. And they're hardly worth speculatively buying at $100 just so that they could be sold at $120 or $150. It's got to die eventually, unless everyone decide that they don't mind depreciating the value of everything else just so that the early adopters of this scheme can have untold wealth dumped into their laps. It's a fascinating technology, but that doesn't mean the speculative delusion will last forever. Pyramid scheme? Just so. Of course, to some degree so is gold -- but gold has a much wider existing distribution (compared to Bitcoin), a much deeper history, and backers far more significant, both intellectually and financially, than the childish ideologues of bitcointalk.org.
  - shredfvz 14y ago
    I'm sorry, but your comment seems blinded a bit by ... I'm not sure what the right word is? angst, self-hatred, jealousy? There's a lot of negativity in general coming from the HN crowd towards BTC, I'm guessing because everyone here was more than capable of installing the original Satoshi client and mining early on, but chose not to or didn't hear about it. With BTC now on the rise, of course it all seems so obvious, and oh so unfair. Everyone had the chance to mine in the earliest of days, that's certainly true for me and I sometimes kick myself about it. Hindsight is 20/20.
    - antiscam 14y ago
      Well, rather than armchair psychology, you could consider the points I made themselves. Do you think there is a good reason for the world to transfer massive wealth to those who currently own bitcoins, rather than setting up an alternative (assuming that the fascinating technology of Bitcoin solves a problem that anyone except ideologues have in the first place)?
      - shredfvz 14y ago
        I considered your points. You pretend as if the claims of early adopters are to blame for fueling the recent "frenzy". Really? Are you really saying a group of early adopters are entirely to blame for a market appraising a formerly unknown asset? If you lacked the vision, the luck, the timeliness, etc. of an early adopter, fair's fair. Pay them their respects. I still kick myself for not having my wits about me when I first heard about Bitcoin. As for your alternative, I don't see why not. You could create a clone of Bitcoin today, why not do it yourself? They did that with Litecoin, too. In fact the author of Litecoin created it because he felt "wronged" the same way you do now. He felt as if too many people missed the boat with Bitcoin, and clearly people should have a second chance of early adopting such a revolutionary concept. I don't feel the same way.
        antiscam 14y ago
        As you'll see from my comment history, I was playing with significant money in Bitcoin early on. I have at least paper gains that are quite satisfying. Nothing I'm saying is personal or is based on any kind of jealousy. It's weird of you to assume that it is.
- rmc 14y ago
  The earlier you get in, the more you get.
  - kgo 14y ago
    An actual pyramid scheme involves you giving a cut of your profits to the person who signed you up, and getting a cut of profits from people you sign up. Nothing remotely like this happens with bitcoin. Similarly it's not a Ponzi scheme because it doesn't involve the fraudulent transfer of new capital into fictional profits. Nothing remotely like this happens with bitcoin. If we alter the definition of pyramid scheme so that Bitcoin qualifies, that definition would match every successful startup company.
    - antiscam 14y ago
      It's a kind of distributed Ponzi scheme that lacks the ordinary intent and centralized accounting associated with them. It's different from startup in that a startup's shares increase in value, at least theoretically, on the likelihood of future dividends from the company. Startups can have bubbles or be Ponzi schemes too, but if they're indeed successful, they can earn money, and that money (or at least the bet that it will materialize) is a basis for sound investment by passive third parties who have capital. Bitcoins increase in value only if you can sell them to future owners who are willing to pay more than you did. It's not quite a Ponzi scheme, but it has all of the important characteristics of one: old money is paid back from the new, and the value increases only on the hope that you can involve more new money.
      - Andrew_Quentin 14y ago
        And if there are less future owners who are willing to buy then it decreases in value. You make it sound as if there is a set amount of buyers and transactions and the only way bitcoin can have value is if its price goes up which isn't the case. As long as people are willing to accept bitcoins as having value then people are willing to buy it at a certain price. What that price is is determined by the market. It isn't necessary for bitcoin to either go up or go bust. "old money is paid back from the new, and the value increases only on the hope that you can involve more new money." Old money isn't necessarily paid back from the new. Money has already exchanged hand. Those that hold bitcoins hold a value of whatever the market considers worth. That may be 0, that may be 1m. That isn't any different from anything else. I.e. those who have dining tables hold such a value as the market is willing to pay. And of course the value increases only if more people are willing to buy than sell i.e. involve more money. What exactly is the ponzi part?

Greatest pyramid scheme ever.

efnx 14y ago

Can you explain why?

antiscam 14y ago
I'll give it a go. The early distribution of bitcoins seems to have been enough to motivate lots of relatively early adopters to promote it aggressively, maybe out of ideology or maybe just out of greed. Their claims, which fueled the recent speculative frenzy, have always been that Bitcoin would have a continuous, exponential growth against all other currencies. "It always goes up." "Get in before it's too late." I can see how relatively small amounts of money could be invested into Bitcoins as speculation or just play. Several tens of millions of dollars have presumably been transferred to Bitcoin holders so far, in the aggregate. But many people are investing on claims that a single bitcoin will eventually be worth $10,000, $100,000, or $1 million. For that to happen, the world would have to transfer massive wealth to the early adopters, as this early adopter explains: https://bitcointalk.org/index.php?topic=175833.msg1830933#msg1830933 https://bitcointalk.org/index.php?topic=175833.msg1830933#ms... Why would anyone do that rather than setting up an alternative? Massive delusions are possible, but it seems far more likely that the claim that a bitcoin will be worth $10,000 will start to seem ludicrous to everyone, as it obviously is. After that, why would anyone buy a bitcoin for $100, or even $30 or $10? There's little practical use for them other than drugs or illegal gambling. And they're hardly worth speculatively buying at $100 just so that they could be sold at $120 or $150. It's got to die eventually, unless everyone decide that they don't mind depreciating the value of everything else just so that the early adopters of this scheme can have untold wealth dumped into their laps. It's a fascinating technology, but that doesn't mean the speculative delusion will last forever. Pyramid scheme? Just so. Of course, to some degree so is gold -- but gold has a much wider existing distribution (compared to Bitcoin), a much deeper history, and backers far more significant, both intellectually and financially, than the childish ideologues of bitcointalk.org.
- shredfvz 14y ago
  I'm sorry, but your comment seems blinded a bit by ... I'm not sure what the right word is? angst, self-hatred, jealousy? There's a lot of negativity in general coming from the HN crowd towards BTC, I'm guessing because everyone here was more than capable of installing the original Satoshi client and mining early on, but chose not to or didn't hear about it. With BTC now on the rise, of course it all seems so obvious, and oh so unfair. Everyone had the chance to mine in the earliest of days, that's certainly true for me and I sometimes kick myself about it. Hindsight is 20/20.
  - antiscam 14y ago
    Well, rather than armchair psychology, you could consider the points I made themselves. Do you think there is a good reason for the world to transfer massive wealth to those who currently own bitcoins, rather than setting up an alternative (assuming that the fascinating technology of Bitcoin solves a problem that anyone except ideologues have in the first place)?
    - shredfvz 14y ago
      I considered your points. You pretend as if the claims of early adopters are to blame for fueling the recent "frenzy". Really? Are you really saying a group of early adopters are entirely to blame for a market appraising a formerly unknown asset? If you lacked the vision, the luck, the timeliness, etc. of an early adopter, fair's fair. Pay them their respects. I still kick myself for not having my wits about me when I first heard about Bitcoin. As for your alternative, I don't see why not. You could create a clone of Bitcoin today, why not do it yourself? They did that with Litecoin, too. In fact the author of Litecoin created it because he felt "wronged" the same way you do now. He felt as if too many people missed the boat with Bitcoin, and clearly people should have a second chance of early adopting such a revolutionary concept. I don't feel the same way.
      - antiscam 14y ago
        As you'll see from my comment history, I was playing with significant money in Bitcoin early on. I have at least paper gains that are quite satisfying. Nothing I'm saying is personal or is based on any kind of jealousy. It's weird of you to assume that it is.
rmc 14y ago
The earlier you get in, the more you get.
- kgo 14y ago
  An actual pyramid scheme involves you giving a cut of your profits to the person who signed you up, and getting a cut of profits from people you sign up. Nothing remotely like this happens with bitcoin. Similarly it's not a Ponzi scheme because it doesn't involve the fraudulent transfer of new capital into fictional profits. Nothing remotely like this happens with bitcoin. If we alter the definition of pyramid scheme so that Bitcoin qualifies, that definition would match every successful startup company.
  - antiscam 14y ago
    It's a kind of distributed Ponzi scheme that lacks the ordinary intent and centralized accounting associated with them. It's different from startup in that a startup's shares increase in value, at least theoretically, on the likelihood of future dividends from the company. Startups can have bubbles or be Ponzi schemes too, but if they're indeed successful, they can earn money, and that money (or at least the bet that it will materialize) is a basis for sound investment by passive third parties who have capital. Bitcoins increase in value only if you can sell them to future owners who are willing to pay more than you did. It's not quite a Ponzi scheme, but it has all of the important characteristics of one: old money is paid back from the new, and the value increases only on the hope that you can involve more new money.
    - Andrew_Quentin 14y ago
      And if there are less future owners who are willing to buy then it decreases in value. You make it sound as if there is a set amount of buyers and transactions and the only way bitcoin can have value is if its price goes up which isn't the case. As long as people are willing to accept bitcoins as having value then people are willing to buy it at a certain price. What that price is is determined by the market. It isn't necessary for bitcoin to either go up or go bust. "old money is paid back from the new, and the value increases only on the hope that you can involve more new money." Old money isn't necessarily paid back from the new. Money has already exchanged hand. Those that hold bitcoins hold a value of whatever the market considers worth. That may be 0, that may be 1m. That isn't any different from anything else. I.e. those who have dining tables hold such a value as the market is willing to pay. And of course the value increases only if more people are willing to buy than sell i.e. involve more money. What exactly is the ponzi part?