2013-03-06 BitCoin Ponzi Scheme by Chris Duane (Truthnevertold)

[apetersson]

http://www.youtube.com/watch?v=0UKC7iaBKvs

With Bitcoin up to $48 I think it is time to separate the hype from reality.
This is a Part 1 of a two part series on the Bitcoin.
Listen to all.
Follow none.

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[apetersson]

he cited an interesting quote at the beginning:

"Paper money eventually returns to its intrinsic value -- zero."
http://quotes.liberty-tree.ca/quote_blog/Voltaire.Quote.2BC6

i did not know this insight is that old. I'm adding that to my quotes repository.

[BlackBison]

Another idiot gold/silver bug. Just one problem: he called it a ponzi scheme in 2011 - then there was the crash. Unfortunately now its trading above the 2011 highs.. ponzi schemes don't recover after a crash. Thats the definition of one- run out of suckers the system collapses to zero as it has no value beyond the scam.

Therefore he's clearly wrong as proven by the facts. Next! 

[apetersson]

of course i completely disagree with the video, just stumbled on it on youtube.

even the ECB disagrees in Bitcoin being a Ponzi by its definition.

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing
investors from funds contributed by new investors. Ponzi scheme organizers often solicit new
investors by promising to invest funds in opportunities claimed to generate high returns with little
or no risk.In many Ponzischemes, the fraudstersfocus on attracting new money to make promised
payments to earlier-stage investors and to use for personal expenses, instead of engaging in any
legitimate investment activity.14

On the one hand, the Bitcoin scheme is a decentralised system where – at least in theory – there
is no central organiser that can undermine the system and disappear with its funds. Bitcoin users
buy and sell the currency among themselves without any kind of intermediation and therefore, it
seems that nobody benefits from the system, apart from those who benefit from the exchange rate
evolution (just as in any other currency trade) or those who are hard-working “miners” and are
therefore rewarded for their contribution to the security and confidence in the system as a whole.
Moreover, the scheme does not promise high returns to anybody. Although some Bitcoin users may
try to profit from exchange rate fluctuations, Bitcoins are not intended to be an investment vehicle,
just a medium of exchange. On the contrary, Gavin Andresen, Lead Developer of the Bitcoin
virtual currency project, does not hesitate to say that “Bitcoin is an experiment. Treat it like you
would treat a promising internet start-up company: maybe it will change the world, but realise that
investing your money or time in new ideas is always risky”.15 In addition, Bitcoin supporters claim
that it is an open-source system whose code is available to any interested party

i omitted the bogus counter-aruments

[BrightAnarchist]

No. Pirate was a ponzi. Bitcoin is a currency. Ever watch silver trade? It has bubbles and crashes just like bitcoin, yet it's definitely no ponzi.

[apetersson]

rebuttal by BrotherjohnF:
http://www.youtube.com/watch?v=CNLSvd4LyP8

[grondilu]

"Ponzi scheme" has a definition which people are happy to ignore in order to spread whatever shit it is they are peddling.

An increasing exchange rate due to influx of new users is not enough to fit the definition. The fact that Bitcoin is open source and one can learn everything there is to know about it, if they so desire, should be a clue.

Oh, my arguments may be irrelevant because I'm not going to waste my time beyond this post and won't click the link in the OP.

Don't bother posting more indeed, what you wrote is a nice summary and it should be good enough.

[TraderTimm]

Another idiot gold/silver bug. Just one problem: he called it a ponzi scheme in 2011 - then there was the crash. Unfortunately now its trading above the 2011 highs.. ponzi schemes don't recover after a crash. Thats the definition of one- run out of suckers the system collapses to zero as it has no value beyond the scam.

Therefore he's clearly wrong as proven by the facts. Next! 

Precisely.

Also ponzi schemes usually don't involve handing out the very thing that you want the person to 'buy in' on. Its more like the definition of an anti-ponzi. "Here, have a small token to understand the system!", "Thanks!"

[fancy_pants]

My favorite rebuttal to "bitcoin is just a ponzi" is  "Of course it's a ponzi, but so is the dollar"

[grondilu]

I've watched the video and what really pissed me off was the claim that six millions bitcoins were mined before the whole thing went public.

Someone correct me if I'm wrong but Satoshi published his idea, with the source code about one month after he mined the first block, didn't he?  It's not his fault or any other's fault if very little people paid attention at this time.

[Piper67]

I've watched the video and what really pissed me off was the claim that six millions bitcoins were mined before the whole thing went public.

Someone correct me if I'm wrong but Satoshi published his idea, with the source code about one month after he mined the first block, didn't he?  It's not his fault or any other's fault if very little people paid attention at this time.

That's correct. It's disingenuous to say X number of Bitcoins were mined before it went public. In some very real sense, Bitcoin has not yet "gone public". Does that mean over half of them were mined before it did? No.

[grondilu]

On the other hand, I think the Ponzi scheme accusation is a fair one, and that's why I think we really should stop promoting bitcoin as we too often do.  It's really too easy to interpret such noise as a way to bring new incomers in order to raise the price.

I think for instance of the way some of us keep harassing Wikimedia to accept bitcoins, or Rick Valvinge's recent article making a prediction for a price at about on hundred thousand dollars or something.   This inevitably attracts skepticism and make the thing look like a scam.  Stop it, please.

Just let people get to know about bitcoin by natural ways (the wikipedia page exists, after all), make their mind about it and use it as a medium of exchange whenever they need it.   We have perfectly natural, commercial and not speculative use cases for bitcoin:  gambling, Silk road, money transfer, IT services, donations and so on.   There is no need to blow whistles and ring bells everywhere to attract the random internet user.

[Gabi]

Gold is a ponzi 

[grondilu]

Gold is a ponzi  

Before I knew about bitcoin, I was a gold bug.  And I can assure you that on the forums where I was hanging out, there were quite a few people that indeed were trolling this idea that gold is a ponzi scheme.  I'm not exagerating in any way whatsoever.  I'd give you links but these forums were not in english.

[Severian]

there were quite a few people that indeed were trolling this idea that gold is a ponzi scheme.

I've found that those folks generally have an over-attachment to government-backed paper as money.

[tjohej]

Another idiot gold/silver bug. Just one problem: he called it a ponzi scheme in 2011 *snip*

Did youtube.com/user/TruthNeverTold say that? I also wonder how TruthNeverTold's youtube videos count as press?(edit: TruthNeverTold must be proud thinking "I'm as popular as CNN") Is it because the video has 3487 views or 173 likes and 54 dislikes? I added a dislike, do you think it will help? I doubt it and maybe we should just start caring about other stuff than silly actions done by people like TruthNeverTold who rant their mind before thinking(edit: + and not doing any research beforehand, I'm used to this.)

[grondilu]

Also, I totally understand this guy and I think he proves a point I had tried to make several times.

Basically he says that he had began suspecting bitcoin to be a Ponzi scheme whenever he started to receive tons of emails and other messages inviting him to learn about bitcoin and buy some.  I totally understand how it may have looked to him:  precisely like members of a pyramidal scheme trying their best to recruit new suckers.

So I'll say it again:   please stop bitcoin proselytism.

One can make a Ponzi scheme out of anything.  You basically just have to try very hard to have as many people as possible buy it at a higher price than the one you paid.  Don't do that with bitcoin.   Let people who need it or want to use it chose to do so by themselves.

[Gabi]

+1 to what grondilu said

[apetersson]

So I'll say it again:   please stop bitcoin proselytism.

i have to agree somewhat, though we are guily of some as well. we organize bitcoin meetups where interested people who happen to be in vienna can come and chat with us.
less evangelism = slower price rise = more bitcoins for us to accumulate before the inevitable happens and bitcoin becomes completely mainstream.
so to get rich, people, STOP actively promoting bitcoin. 
(to be taken with a grain of salt, though i find "pushers" annoying, too no matter what they push. if an idea is good, it will grow from itself)

[anarchy]

If you stop promoting bitcoin because some random dude calls it a ponzi scheme, you are pretty stupid imo. Keep promoting it, how do you think we got here? Mute sheeple? No.