In context, the only plausible meaning for "screw banks" is that you should view banks with contempt. Much like "screw you".

You're forgetting that he has to get the "profits" he pays out from somewhere.

There is no "profit" in a Ponzi scheme. Deposits are neutral -- someone gives you $100, you owe them $100. Payouts are neutral -- you pay out $100 to someone, you owe them $100 less. And, of course, accumulated interest is pure loss. If someone deposits $100 and I now owe them $105, that's a $5 loss. Ponzi schemes only accumulate losses. The difference between how much money they hold and how much they owe can only grow, and it grows with every passing day.

I don't think there has to be anybody on the losing end. Say someone has a unique opportunity to turn $100 into $150 (say by buying something wholesale and selling it retail). So they borrow some Bitcoins, sell them for $100, turn the $100 into $150, buy $110 in Bitcoins, give those Bitcoins to the lender and pocket $40 in profit. Who is the loser here?

Martingale changes the odds from a very high chance of losing a small amount of money to a very small chance of losing a large amount of money. It can't change the house edge though, so the higher the chances of a profit, the higher the losses in the unlikely event of a loss.

A typical Martingale progression, for example, needs a $10,000 bankroll to give you a 99.85% chance of winning $10. In the very unlikely case that you lose, though, you'll lose your entire bankroll. If you don't have that large a bankroll, you can't lose as much. But the odds that you will lose your entire bankroll go up.

What this means is that if it is a Ponzi scheme, most likely we're still very early in the scheme. If that's true, people who are in now are pretty safe and will likely have plenty of warning when it's time to get out. This is one of the main reasons I'm *not* one of the people screaming "Get your money out now, it's a Ponzi scheme!". I don't really see how it could be a Ponzi scheme that's about to bust, because if so, it was very badly run and didn't achieve anywhere nears its potential for the effort expended.

And, strangely, they are getting the benefits of anarchy along with the, umm, slight inconveniences.
http://www.bbc.co.uk/news/world-africa-12278628

It's really this simple: You can't pay off extraordinarily high interest rates reliably unless you have an astounding source of income. If you have an astounding source of income, you don't need to borrow at extraordinarily high interest rates. This could explain a small number of loans over a short period of time to jump start some kind of amazing opportunity, but it can't explain a sustained endeavor.

A reasonable explanation would have been that he needed the money to finance a drug deal or two. But you don't keep borrowing money at high interest rates to finance drug deals unless you're planning to run off with the money.

My silence is not a requirement of your freedom.

And, one more time, while I think it's possible it's a Ponzi scheme, I think it's more likely something other than a Ponzi scheme. But I have no idea what, and I don't think very many other people do either. As a result, the risk is completely unknown.

Actually, I had a specific citation in mind for that claim, and when I went to get it, I realized that I had misread it. I retract my claim about any claimed lack of risk. However, I don't think anyone has any idea what the risks are.

If that's true, that's coming from secret information that hasn't been shared with others. So far as I know, nobody but Pirate has any idea what the risks are.

That's typical of many Ponzi schemes. That was, for example, exactly what people said about those how criticized Madoff. http://www.sequenceinc.com/fraudfiles/2012/02/red-flags-pointed-directly-to-madoff/

What are these other things that can explain the situation? Because I don't know of any. Other than a Ponzi scheme or demented charity, I know of no way to explain the rate of the return and the claimed lack of risk.

I don't deny that it's possible that it's something I cannot think of. In fact, I think it's more likely than not that it's something so strange that I haven't thought of it. But it's not like there are other possible explanations out there. Right now, it's simply unexplained.

I'm not jealous. I have no skin in this game. I'm not associated with any Bitcoin investment of any kind. My total holdings in all things Bitcoin-related are worth under $50.

The difference is that nobody is being falsely told that they're investing in something when their money is actually going to pay the cash outs of previous investors. The difference is that real assets are held with a fair market value equal to the total of all amounts invested. While a legitimate investment scheme may look somewhat like a Ponzi scheme from the outside, the insides are totally different.

Right, but there I make 1% and the next time, you don't need to borrow any money from me. So this would be a one-time thing that makes a normal profit.

We know Ponzi schemes exist. We know how they work. We know that they do work. Your argument boils down "maybe there's some conceivable way it could be something else, even though I can't quite imagine what it might be". That was the argument made to investors during pretty much ever Ponzi scheme since the first one. Madoff, for example, claimed to have some kind of unusual investment strategy. He claimed no risk. He paid extraordinary interest. If this isn't a Ponzi scheme, it's something else nobody can think of that looks exactly like one.

(By the way, I'm completely open to the possibility that it's something bizarre that I can't imagine. Honestly, from what I've seen, that may actually be more likely than that it's a Ponzi scheme.)

I don't see that he's spreading the use and interest of BTC. All he's doing is associating Bitcoin with something that appears to be a Ponzi scheme and driving out legitimate investment opportunities.

This is the classic argument in defense of a Ponzi scheme.

I have no idea what you're talking about. How do I lose in that scenario?

Which are? I've yet to hear the example.

Sure, but that's because the investors are taking very high risks. Are you suggesting that's what's happening here?

I cannot think of anything else it could possibly be other than a Ponzi scheme, sheer insanity, or something very, very risky for some other reason. That could, of course, mean it's something so strange that I can't think of it. But I know of no other explanation that makes any sense.

Trust in those who appear to be acting irrationally are the hallmarks of the less-subtle Ponzi schemes. Solid businesses are based on rational actions, not irrational ones. Benevolence is not irrational, but giving money to those who extend trust to people who appear to be acting irrationally and driving out legitimate investment schemes is.

Essentially, what you're suggesting is that he may have some source of money that's so lucrative or so enormous that he can afford to give money away. This argument works the same whether it's some absurdly successful retail business or he won the lottery and "it's his money and he needs it now".

How is he supporting Bitcoins exactly? If you assume that he's not a legitimate investment but a gift (which is what you're suggesting) then he's probably driving legitimate investments out of the market. How does that help?

In other words, again, it's a gift. That's certainly possible, but as for a reason why -- I've yet to hear one.

Suppose currency scarcity creates some kind of problem, such as discouraging investment. If you don't think currency scarcity creates any issues, then you won't see any point in trying to "work around it", but neither will you see any need to do so. But if you think quirks of the monetary system will destroy investment opportunities that would otherwise be profitable, then there will be a strong incentive to develop other payment schemes and induce people to accept them as a way of opening up those profit opportunities.

So long as they don't have a disadvantage, why do they need to provide an advantage to be competitive? One can imagine any number of advantages they could provide including providing interest by means of fractional reserve, insurance against theft, or anything else the free market can dream up. Sure, if Bitcoins work perfectly, there will be no reason to try to compete with them. But if they don't, there will be.

Only Pirate can answer that question. Without knowing what Pirate's actually doing, there's no way to know how he could demonstrate it wasn't a Ponzi scheme.. It depends on precisely how what he's doing is different from a Ponzi scheme. Presumably, something about that difference would be provable. If it's literally impossible to prove it's not a Ponzi scheme, then it's a Ponzi scheme. If two things are indistinguishable, then they're the same thing.

I don't think it makes sense to consider the preference independent of the value. Not preferring something is the same as valuing it less.

If a currency has an unusually high or unusually low value to just one party in a transaction, that makes it a lousy medium of exchange. If it has abnormally high value to the seller, the buyer won't be willing to part with enough of it to make it worth the seller's while. If it has abnormally high value to the buyer, the buyer won't be willing to part with enough of it to make it worth the buyer's while. Either way, the buyer and seller will be more likely to make the deal in another currency. So, if you think that inflation or deflation change the relative value of a currency to the seller and the buyer, then a currency that is either inflating or deflating for reasons internal to that currency (and not due to market conditions generally) will tend to become less efficient as a medium of exchange and will lose out to more stable currencies.

If we had a Bitcoin-based currency and the built in deflation made the currency scarce, the solution would simply be to supplement the currency with other currencies with comparable characteristics or to use credit instruments as currency. So long as these instruments had roughly equal value to both the buyer and the seller, rational buyers and sellers would be indifferent to the form in which they were paid. All that matters is that I can acquire something you value at X for not much more than X and you get not much less than X back for it. The closer these three values are to each other, the more useful the currency.