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re: Bitcoin is a Ponzi scheme—the Internet’s favorite currency will collapse.
Posted on 4/18/13 at 11:07 am to Broke
Posted on 4/18/13 at 11:07 am to Broke
From the OP article:
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.
quote:
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.
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.
1
Posted on 4/18/13 at 12:12 pm to gizmoflak
Why do you continue to ignore the other statements in the article such as:
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:
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'.
quote:
More than anything else, it resembles a Ponzi scheme—
quote:
Russian holds up as proof that bitcoin is a ponzi
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:
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
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'.
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