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Started By
Message
re: Bitcoin is a Ponzi scheme—the Internet’s favorite currency will collapse.
Posted on 4/18/13 at 12:12 pm to gizmoflak
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'.
3
Posted on 4/18/13 at 12:18 pm to LSURussian
Not related to this argument, but another Bitcoin thread definitely wasn't needed. A beer festival in Fort Worth posted this on Facebook.
Posted on 4/18/13 at 12:26 pm to LSURussian
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:
by cheekily pointing out the limited universe of vendors that accept bitcoins
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:
quote:
Holders of bitcoins can trade with anyone for anything.
by cheekily pointing out the limited universe of vendors that accept bitcoins
This post was edited on 4/18/13 at 12:29 pm
Posted on 4/18/13 at 12:54 pm to LSURussian
quote:
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.
quote:
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.
So hold up just a minute. What exactly is your theory here? Hypothetically speaking, can you even outline a scenario where individual sales of Bitcoins would constitute an actual Ponzi scheme? I can't stick around here much today, but I'll check back later, and I'm just dying to know what your ideas are about how this could ever possibly happen.
Was the Dutch tulip mania a Ponzi scheme in your opinion? Were collectible baseball cards a Ponzi scheme? Seriously, what in your mind differentiates a Ponzi scheme from a run-of-the-mill asset bubble?
This post was edited on 4/18/13 at 12:58 pm
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