Penn and Teller did make an episode on Bitcoin.

Easy Money
http://www.youtube.com/watch?v=Ep3pO7X7fEQ

Absolutely right, Impaler.

Bitcoiners have no economics training. It's like the blind leading the blind. This is too funny.
Many companies spend billions of dollars on R&D and the products fail and never make back the investment. What a fantasy world, if your wealth increases with increase in spending.

Bitcoiners are so blinded by greed that they refuse to see that Bitcoin is a pyramid scheme.

All they look at are the rising prices at the exchanges.
The exchanges are not regulated, no government oversight.
I can open my own exchange have group of friends buy and sell to each other, bid up the price, and wait for the suckers to buy into Bitcoin with real world currency. You are sheeps, helpless against the wolves.

Okay, so you don't even bother to address my points, but dismiss my argument entirely over semantics that I do not know the meaning of pyramid scheme.

Looks like, we do not have much to discuss further. I will say though. You are now plugged into the Matrix. As Morpheus says to Neo.

"The Matrix is a system, Neo. That system is our enemy. But when you're inside, you look around, what do you see? Businessmen, teachers, lawyers, carpenters. The very minds of the people we are trying to save. But until we do, these people are still a part of that system and that makes them our enemy. You have to understand, most of these people are not ready to be unplugged. And many of them are so inured, so hopelessly dependent on the system, that they will fight to protect it."

Anyways. If you so believe in Bitcoin, buy more BTC and hold on to it. It is going up and up. That's sarcasm. I do hope you weak up.

The price of Bitcoin is going up because Bitcoiners are pumping it to get more and more new participants to enter. The media is not helping the situation either with their report of skyrocketing prices. This should be a clue for some people that the Bitcoin scheme is a pyramid scheme.

As you state that Bitcoin can work with no new participants. Can it work?
Let's do a thought experiment.

Assuming:
No new coin creation, it stops now
12 million total BTC supply and it's fixed at 12 million
1 million Bitcoiners

Looking at BTC Distribution.
the Pharaoh (Satoshi) 3m BTC 25%
early adopters, ruling class Lords (~100 people) 2m BTC 17%
early adopters, ruling class Governors (~2000 people) 1m BTC 8%
early adopters, elite class (~15000 people) 1m BTC 8%
.... it gets granular as we go down, but let's lump the rest together
late adopters, working and slave class (~980000 people) BTC 5m 42%

This is a rough estimate distribution from Bitcoin supply issuance scheme and early adopters were few, maybe under 20000 people.
Teleport the one million Bitcoiners to planet BitEarth.

On BitEarth, let's simplified things and condense time so we can get a better visual. The basic principle is the same.
One generation is one year and population growth doubles every year. Die-offs after 3 generations.

Year - Population
1 - 1m
2 - 2m
3 - 4m
4 - 7m (1m die-off)
5 - 12m (2m die-off)
6 - 20m (4m die-off)

Since money supply is fixed at 12 million BTC, as population grows economic activity grows, the money supply can be increased by moving the decimal point, 0.01 (year 1), 0.001 (year 2) and so on. Over subsequent generations, the wealth gaps incremental widens more and more. The slave class where the majority resides have the widest gap between the ruling class.

This is not how a fair monetary system can possible work.
I hope people can see why the Bitcoin scheme is a pyramid scheme.

First, understanding the role of money. Money was created out of barter. Alice grows corn (competitive advantage, lower cost to produce corn). Bob grows wheat (competitive advantage, lower cost to produce wheat). Alice and Bob trade corn and wheat. There is an equilibrium or close to it in the barter system or fairness in the barter, otherwise Alice and Bob would not trade with each other. Thus, the characteristics of sounded money has to have this close equilibrium as in barter.

Bitcoin is not sounded money.

Some people call Bitcoin a ponzi scheme without understanding what the term means. To them, it's an all encompassing term for scam. Stop calling it a ponzi scheme. Bitcoin does not fit the definition of ponzi scheme. Bitcoin fits under the broader term, scam.

BITCOIN IS A PYRAMID SCHEME.

Bitcoin can be separated into two components:
A) the distributed peer-to-peer payment technology
B) the Bitcoin scheme, monetary, method of creation and issuing new coins

The technology part is not the problem. You can have a pyramid scheme over the postal mail system, something like Mailcoin, but it would not be as efficient and will not have the exponential growth than a distributed p2p network has over the Internet.

The monetary part is where the pyramid scheme for Bitcoin is concocted. The early adopters control a huge percentage of BTC and the Pharaoh (Satoshi) controls the most BTC. Immediately that should give an objective person alarm bell that there is something wrong with this picture.

If a new participant were to enter Bitcoin, mining for BTC is astronomically difficult. At the same computing power, a new participant would take more than a million years to get 50 BTC compare to what Satoshi got in 10 minutes at the beginning. That is not how money should work. So, new participants have to use real world currency to buy into Bitcoin, this is where value is flowing up the pyramid.

People that have 1 or more BTC have some skin in Bitcoin, so this make it hard for some to be rational and objective about the Bitcoin scheme. I hope some will step outside the box and take a hard look at it. Some Bitcoiners might know it is a pyramid scheme, but lack the ethical conscience to care. These Bitcoiners are marketing and pumping Bitcoin to get new participants to enter, thus driving the price of Bitcoin up and then cash out with the gains.

For new people that want to get in on Bitcoin, I hope you take an objective view of Bitcoin. If you do choice to buy into Bitcoin with real world currency, just hope you are not one of the many at the bottom of the pyramid left holding the bag when this thing collapses. I am not here to judge your morality. Keep in mind, you are participating in this fraud.

I am new to Bitcoin, so I wanted to learn what this is all about.

My conclusion is the Bitcoin scheme is a pyramid scheme.

Bitcoin can be separated into 2 components:
A) the distributed peer-to-peer payment technology
B) monetary, the Bitcoin scheme, method of creation and issuing new coins.

The technology part is not the problem. You can have a pyramid scheme over the postal mail system, something like Mailcoin, but it would not be as fast and efficient. The decentralized peer-to-peer payment system shows promise as a technology.

The monetary part is where the pyramid scheme for Bitcoin is concocted. The early adopters control a huge percentage of BTC and the Pharaoh, Satoshi, controls the most BTC. Immediately that should give an objective person alarm bell that there is something wrong with this picture.

If a new participant were to enter Bitcoin, mining for BTC is astronomically difficult. A new participant would take more than a million years to get 50 BTC compare to what Satoshi gets in 10 minutes at the beginning. That is not how money should work. New participants have to use real world currency to buy into Bitcoin, this is where value is flowing up the pyramid.

This forum will fill with people that have 1 or more BTC. They have some skin in Bitcoin, so this make it diffcult for some to be rational and objective about the Bitcoin scheme. I hope some will step back, step outside the box, and take a hard look at it. For new people that want to get in on Bitcoin, I hope you take an objective view of Bitcoin. If you do choice to buy into Bitcoin with real world currency, just hope you are NOT one of the many at the bottom of the pyramid left holding the bag when this thing collapses.