re: Bitcoin is a Ponzi scheme—the Internet’s favorite currency will collapse.

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congrats, you just described every IPO

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You have no idea how an IPO works. That much I know.

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Try again

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Do you want us to dumb it down? How about we just call it monetary musical chairs?

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You have no idea how an IPO works. That much I know.

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You're right, I've never drawn up IPO papers for filing with the SEC.*







* Rebuttal tactic based on Step 2 of the Russian playbook.

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Do you want us to dumb it down? How about we just call it monetary musical chairs?

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I want to know what facts, if true, would make bitcoin a ponzi.


I'm dum, so type real slow for me.

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Gizmo's playbook:

1. Ask for an explanation
2. Ignore explanation
3. Ignore more explanations
4. Make silly comparison of a cash/profit generating enterprise to bitcoin
5. Ignore he was wrong with his silly comparison
6. Declare victory and takes his ball home

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After step 1, the replies were:

"It's a ponzi because I say it is."
"I already explained how it's a ponzi."
"Read the OP article."

Step 2 is moot because there was no coherent explanation in the first place.

Step 3 is moot because there was no coherent explanation after repeated requests for one.

Step 4 falls right in line with how you described the bitcoin operation.

Step 5 is moot because I've never been proven wrong.

Step 6 is moot because I'm not out for victory.... All I want to know is how bitcoin is a ponzi scheme, and I have yet to hear any rational, logical, realistic set of evidence, facts, circumstances, explanation, or the like, tending to show that it is a ponzi.


once again, early adopters profiting =/= ponzi

Since there has been no ponzi theory articulated in this now 12-page thread, I'll make my own assumption:


- Nakamoto invented an open source crypto currency.
- He and his buddies mined 200k bitcoins using a pentium I at a cost of $35.67 in electricity bills.
- They patiently waited until April 2013 when each bitcoin was worth well over 100 USD
- Then, they sold their 200,000 BTC on the open market for millions of dollars.



Sounds like a ponzi scheme, huh?

From the OP article:

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A regular Ponzi scheme collapses when people realize that earlier investors are being paid out of the investments of later investors rather than from the returns on an underlying asset. Bitcoin will collapse when people realize that it can’t survive as a currency because of its built-in deflationary features, or because of the emergence of bytecoins, or both.

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So even the Slate article -- which Russian holds up as proof that bitcoin is a ponzi -- doesn't allege that bitcoin is a ponzi scheme.

Rather, it supposes that bitcoin will fail because of "deflationary features" and/or the emergence of competitors.


The OP article's title is misleading, probably to lure in lazy readers who take the title as gospel and link to the article without bothering to read its contents.

Why do you continue to ignore the other statements in the article such as:

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More than anything else, it resembles a Ponzi scheme—

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Russian holds up as proof that bitcoin is a ponzi

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Once again, I'll try to explain to you: I don't have "proof" it is a Ponzi scheme.

If there was proof available, the legal authorities would already be all over it. Well designed Ponzi schemes don't leave proof laying around for someone on an internet message board to discover.

What I have written, repeatedly, is that bitcoin has all the characteristics of a Ponzi scheme and therefore, in my OPINION, it is a Ponzi scheme.

Before you ask, AGAIN, what is it about bitcoin that has the characteristics of a Ponzi scheme, I will explain that, AGAIN.

A Ponzi scheme is where earlier investors are paid out at a profit from the cash paid by newer investors AND there is no cash/profit flows generated from the underlying investment.

And, AGAIN, this differs from an IPO because the company issuing the IPO is expected to generate cash/profit flows which will increase its value over time. Investors buy shares in the IPO with the expectation of those cash/profit cash flows which will increase the value of their ownership in the company.

The do not buy the shares JUST BECAUSE new investors will be willing to pay more for the shares than the earlier investor paid AND there are no cash/profit flows from the company.

In anticipation of your typical response let me repeat your playbook:

quote:

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1. Ask for an explanation
2. Ignore explanation
3. Ignore more explanations
4. Make silly comparison of a cash/profit generating enterprise to bitcoin
5. Ignore he was wrong with his silly comparison
6. Declare victory and takes his ball home

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I'm guessing you will bypass #1-5 and go straight to #6.

In any case, I won't waste more time repeating the same explanations just so you can try to play gotcha'.

I can agree that certain characteristics of the bitcoin market resemble those of a Ponzi scheme. Early adopters see their stake in bitcoins rise in value and then they sell them off at a profit. No doubt that is happening.

But the M.O. of a Ponzi scheme is that a single entity takes in and dishes out investment money (i.e., exclsuive control over the money).

That is not happening with bitcoin.

You even admitted in previous posts that bitcoin is traded like a commodity. Victims of ponzi schemes generally aren't free to trade their stakes to third parties -- they can only trade with and through the ponzi schemer. Holders of bitcoins can trade with anyone for anything.

I know you realllly want bitcoins to be a ponzi scheme, but that square peg just doesn't fit in the round hole.


ETA: I know Russian will ignore my post and focus on this sentence:

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Holders of bitcoins can trade with anyone for anything.

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by cheekily pointing out the limited universe of vendors that accept bitcoins

Yep, straight to #6. I was right!