Bitcoin = Ponzi Scheme = You are an uninformed idiot

[unk]

That is called a "pyramid scheme".

funny, because someone else replied to the same passage and called it something else. the terms are not precise, or at least not used consistently enough to bother with a typology or taxonomy. and it doesn't matter. the relevant question is substantive, not taxonomic.

if the worst you can say to eric posner is 'you are perhaps using the term slightly incorrectly', you haven't debunked his analysis!

[edd]

I have a feeling this argument will continue for a while yet. See my post from July 2011: https://bitcointalk.org/index.php?topic=29036.msg366212#msg366212

Ponzi schemes in a nutshell:

1. Charles Ponzi says, "Invest with me and I'll pay you 150% whenever you cash out!"

2. Trusting individuals give Ponzi their money.

3. Whenever someone wishes to cash out, Ponzi pays them from what he's accumulated from other investors or, if he's already spent it, he gets more people to give him money and uses that. There is no other source to draw from.

4. Someone finally asks too many questions or a significant number of investors attempt to cash out and the whole house of cards comes crashing down when it becomes public knowledge that Peter was being robbed to pay Paul.



Differences with Bitcoin:

1. There is a finite number of BTC in existence. Their value increases because the demand for them increases.

2. The only advantage "early adopters" may have is that they were able to acquire bitcoins at a time when it was relatively inexpensive to mine them. There was no "Charles Ponzi" to receive an investment! Bitcoins are still created the same way but just at a higher difficulty rate and with much more competition.

3. The project is open source and, consequently, there is no deception inherent in it. The code does not lie.

4. Bitcoin is a currency, not an investment. You may choose to invest in this currency with the hopes that it will increase in value but it is not required for it to function in its intended role.