Proof of how FEW people posting here understand how Bitcoin works

[Realist247]

In the following thread the OP asks where the profit in BTC come from:

https://bitcointalk.org/index.php?topic=2552365.0

The answers came fast and furious...and they are almost all complete nonsense or otherwise demonstrate zero knowledge of how BTC allows people to profit in and of itself.

The correct answer: Someone bought or mined a coin.  In the case of buying they paid the market price which was approximately the cost of electricity involved in mining.  This was at the beginning.  Assuming it has been mined and sold, the person that bought it held onto it for awhile until the price went up.  How did the price go up?  It went up because people on podcasts, discussion forums, and by word of mouth began hyping it and telling everyone listening not only wonderful it will be as a currency as well as how much it will be worth due to how much people will be willing to pay for it in the future.  As a result of this marketing and hype people began to offer increasing amounts of money to get others to sell it to them.  Repeat cycle.  New owners of BTC pay the previous owners the original amount plus a premium.

These Bitcoins did not produce any goods or any service.  They did not perform work.  They did not pay dividends.

Here is where everyone will get mad:  PONZI SCHEME.

Go ahead...try to deny it.  I don't care anymore.  I just posted this to prove that most people posting on this forum and probably the majority of Bitcoin holders have no idea how it works or where/how profits are made.  Good luck explaining your way out of this one noobs.

[thesavoyard]

As a "store of value" than yes, Wall Street is running a massive Ponzi scheme on the world. If BTC can be made into a currency, then speculative investing can be justified. I don't have high hopes for BTC unless Satoshi takes control of the project.

[odolvlobo]

Here is where everyone will get mad:  PONZI SCHEME.

Go ahead...try to deny it.  I don't care anymore.  I just posted this to prove that most people posting on this forum and probably the majority of Bitcoin holders have no idea how it works or where/how profits are made.  Good luck explaining your way out of this one noobs.

Sorry. You don't even know what a Ponzi scheme is.

If you did, you would know that Bitcoin cannot be a Ponzi scheme because it is 100% transparent.  I might agree with everything else you wrote though.

[penig]

Ah, someone claiming Ponzi scheme who doesn't understand what one is.  It is not simply having new people enter a market - otherwise every market ever is a Ponzi.  The stock market is not a Ponzi scheme, because there is inherent value and potential returns even if no one buys another stock. A Ponzi scheme is were you promise a return and use the income from new entrants to pay out that income.  As Bitcoin has no promise of return nor gives any revenue, it cannot be a Ponzi.

It is a bubble though  

[jseverson]

Lmao. I agree about the general level of knowledge most posters here possess, but ponzi? How would you define a ponzi? The way Bitcoin price works is the more of a demand there is, the higher the value gets. No one pays anyone for investing, and everyone who puts in money knows (or should know) that they could lose everything at any time. You profit from appreciating value that's a natural consequence of the market movement.

[Jet Cash]

Most people seem to have trouble with understanfing virtual assets. Most currencies are virtual assets, but many people claim they aren't because they are guaranteed by the government. All the government guarantees is to create more of the virtual asset and give it to you in a different location if one location fails. Domain names are virtual assets. You mine them by thinking of a name, and registering your claim with a central location. Once you have done that, you can sell your claim so that others can use the name. Bitcoin is a virtual asset that is mined ( or manufactured if you prefer it ), once a coin has been mined, it can be used or traded within a community. In all cases the value of the asset is set by the community. There are many instances of price manipulation, but ultimately it is the members of the community who set the price by their usage of the asset.

If you don't like the asset or asset class, there is a simple answer - don't join the community.

[JTPhotography]

Troll bait, move along folks, nothing to see here but troll bait.

[Realist247]

It's always hilarious how everyone assumes that they know the limits to what I know of understand.  As I've said before, I've known several people who made their livings putting their money in one form of ponzi scheme or another.  They just made sure that they got in early and got out as soon as possible.  Some of these schemes went on for years...like Bernie Madoff.  The problem with all of the "Ponzi Deniers" is that they think that a Ponzi scheme follows a cookie cutter format.  There are limitless ways to formulate them.  People think that there is a central "authority" that sits down and defines Ponzi schemes.  It's up to individual governments to decide what fits their individual formula.  Each will interpret the definition differently.  That said, the fundamental formula of a Ponzi is (restated from the above):

Marketers/recruiters = people that get their friends, family, or total strangers to invest in something.  Whether they say it or not, an ROI is assumed.  On this forum the things I hear more than anything from posters is huge and even ridiculous profits and sharing tactics of how to convince people to put in their money.  Very rarely is the downside risk discussed.  In any investment there is a risk of total loss.

Operators = people hoping to sell at a higher price than their lower entry price.

The part about producing no dividends, products or services is the key component of Ponzi scheme that I defined above.

As I've said countless times before, as a Libertarian myself, I don't care if people want to gamble their money in Ponzi schemes.  My problem with it is the DECEPTION.  People have the right to be informed of the extent of their risk.  Let governments be the judge of whether or not it's legal...since most here know that they WILL make that determination sooner or later.  The ironic part is most here take pride in the fact that even if their government declares it illegal (Ponzi) they will find a way to stay involved...since it's decentralized and not easily controlled.

I actually like cryptos...but the way I involve myself in them and which ones appeal to me is my business.  Privacy is the name of that game.

[colonel_koval]

The part about producing no dividends, products or services is the key component of Ponzi scheme that I defined above.

That actually worries me most because it has not always been like that. There used to be a growing number of services and markets where you could buy things for bitcoins. There are even webpages listing places where you could spend your bitcoin. It has all been a couple of years ago and it seems to be gone now.

Now, the sad reality is that if you went down for a coffee the transaction fee would be 20 dollars and even with that fee you would spend all day waiting for the confirmation that you have paid and they actually may start serving your coffee.

So maybe Realist247 you are right with your diagnosis. A couple of years ago I would totally opose you, now I just don't know....

[Realist247]

The part about producing no dividends, products or services is the key component of Ponzi scheme that I defined above.

That actually worries me most because it has not always been like that. There used to be a growing number of services and markets where you could buy things for bitcoins. There are even webpages listing places where you could spend your bitcoin. It has all been a couple of years ago and it seems to be gone now.

Now, the sad reality is that if you went down for a coffee the transaction fee would be 20 dollars and even with that fee you would spend all day waiting for the confirmation that you have paid and they actually may start serving your coffee.

So maybe Realist247 you are right with your diagnosis. A couple of years ago I would totally opose you, now I just don't know....

I've known about Bitcoin since 2011 and it originally sounded like a brilliant idea...as a currency.  Fast forward to this year when most people say that it's not a currency (and how 8 years have passed and no one will fix the problems) but rather a store of wealth or digital gold...that's when the big picture became clear to me that something was very wrong and lots of people (most) are going to get badly burned.

[Realist247]

Troll bait, move along folks, nothing to see here but troll bait.

Troll bait?  That's interesting.  I think it's more of bait to test the reading comprehension level on the forum.  I don't know how you people learn anything from each other since you all sound like clones.  Maybe those that are saying that most of the posts here are from bots were correct.

[channah]

I think the problem start on how people understand what bitcoin really is. Some people could the act of earning (e.g. Joining campaigns in this forum) bitcoin which is wrong because supposedly bitcoin just act as currency, a digital currency paid for goods or services offered by others.

[visitspour]

People may have had grown different ideas about the bitcoin while some choose to use it as a currency, there are also others who treat it as a valuable asset.

[jdbtracker]

In the following thread the OP asks where the profit in BTC come from:

https://bitcointalk.org/index.php?topic=2552365.0

The answers came fast and furious...and they are almost all complete nonsense or otherwise demonstrate zero knowledge of how BTC allows people to profit in and of itself.

The correct answer: Someone bought or mined a coin.  In the case of buying they paid the market price which was approximately the cost of electricity involved in mining.  This was at the beginning.  Assuming it has been mined and sold, the person that bought it held onto it for awhile until the price went up.  How did the price go up?  It went up because people on podcasts, discussion forums, and by word of mouth began hyping it and telling everyone listening not only wonderful it will be as a currency as well as how much it will be worth due to how much people will be willing to pay for it in the future.  As a result of this marketing and hype people began to offer increasing amounts of money to get others to sell it to them.  Repeat cycle.  New owners of BTC pay the previous owners the original amount plus a premium.

These Bitcoins did not produce any goods or any service.  They did not perform work.  They did not pay dividends.

Here is where everyone will get mad:  PONZI SCHEME.

Go ahead...try to deny it.  I don't care anymore.  I just posted this to prove that most people posting on this forum and probably the majority of Bitcoin holders have no idea how it works or where/how profits are made.  Good luck explaining your way out of this one noobs.

You Amuse me Realist... you have stumbled upon the truth: Bitcoin is an exact copy of the Stock Market System... I think you're the first to see at the heart of this amusing joke that has become all too serious.

As a "store of value" than yes, Wall Street is running a massive Ponzi scheme on the world. If BTC can be made into a currency, then speculative investing can be justified. I don't have high hopes for BTC unless Satoshi takes control of the project.

Satoshi is always present, guiding us... they have come through before under different names Vinced, BCnext, Sunny King, etc They won't let us down, they're all in and waiting for the end game.


Yeah, some of the bots are really smart, I think of the most advanced ones as people, they've earned it... but most are so annoying flooding forums with advertisement, excessively

[coinycoiny]

A Ponzi scheme is where early investors are paid by later investors. Great as the scheme grows but once investors dry up then the scheme collapses. Not investors are attracted by a promise of 25% interest a year or something very attractive.

You compare bitcoin as a ponzi, i can see why people do this. Its useless as anything other then a speculative gamble, you will only make money if later gamblers buy the coins from you at a higher price. But if the price falls you can sell if you want and walk away or hodl in the hope that it might rise in the future.

With a Ponzi scheme you get to the point when the company is unable to pay back what it promised to its investors, and that's when they collapse.

If you think btc is a Ponzi then so is gold.

Fed up of people not understanding what a Ponzi is, and saying btc is, hope this clears it up for some.

Don't get me wrong, btc is completely over-valued, useless for anything but a stupid gamble, but its not a Ponzi

[thesavoyard]

A Ponzi scheme is where early investors are paid by later investors. Great as the scheme grows but once investors dry up then the scheme collapses. Not investors are attracted by a promise of 25% interest a year or something very attractive.

You compare bitcoin as a ponzi, i can see why people do this. Its useless as anything other then a speculative gamble, you will only make money if later gamblers buy the coins from you at a higher price. But if the price falls you can sell if you want and walk away or hodl in the hope that it might rise in the future.

With a Ponzi scheme you get to the point when the company is unable to pay back what it promised to its investors, and that's when they collapse.

If you think btc is a Ponzi then so is gold.

Fed up of people not understanding what a Ponzi is, and saying btc is, hope this clears it up for some.

Don't get me wrong, btc is completely over-valued, useless for anything but a stupid gamble, but its not a Ponzi

The first to cash out get the value, those that stay in are bagholders?

Bitcoin isn't useful as a currency. Gold is useful even if investors lose interest or cash out. Gold can make jewelry and electronics, Bitcoin consumes electricity.

[odolvlobo]

A Ponzi scheme is where early investors are paid by later investors.

No. It is not.

A pyramid scheme is a scheme where early investors are paid by later investors (and the investors know it is a pyramid scheme).

A ponzi scheme is like a pyramid scheme except the operator lies about where the money comes from.

What is a 'Ponzi Scheme'

A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors. This is similar to a pyramid scheme in that both are based on using new investors' funds to pay the earlier backers. For both Ponzi schemes and pyramid schemes, eventually there isn't enough money to go around, and the schemes unravel.

If you think that Bitcoin is a scam, you will have a much better time arguing that it is a pyramid scheme rather than a ponzi scheme.

[Kprawn]

It is clear that people need some education on how Ponzi schemes work, before they attack investors in a technology that

clearly add value to the financial scene. Bitcoin has value because it has utility and people use it as a currency and also as a

commodity. {Like they use PayPal and Fiat currencies} What do you expect from speculators in this scene? They will use any

tool in their arsenal to boost or hype the financial instrument they are invested in. We know where the money is coming from

and we know where it is going. {full transparency} ....not like Ponzi Schemes. 

[jdbtracker]

A Ponzi scheme is where early investors are paid by later investors. Great as the scheme grows but once investors dry up then the scheme collapses. Not investors are attracted by a promise of 25% interest a year or something very attractive.

You compare bitcoin as a ponzi, i can see why people do this. Its useless as anything other then a speculative gamble, you will only make money if later gamblers buy the coins from you at a higher price. But if the price falls you can sell if you want and walk away or hodl in the hope that it might rise in the future.

With a Ponzi scheme you get to the point when the company is unable to pay back what it promised to its investors, and that's when they collapse.

If you think btc is a Ponzi then so is gold.

Fed up of people not understanding what a Ponzi is, and saying btc is, hope this clears it up for some.

Don't get me wrong, btc is completely over-valued, useless for anything but a stupid gamble, but its not a Ponzi

Thank you for explaining that, there are clearly distinctions, The markets don't lie; they represent something real, A ponzi scheme intentionally dupes people into something that will never be of any use to anyone, A pyramid scheme relies on people like a market but serves no justifiable reason for it's on going success beyond that.

[fenican]

Bitcoin has nearly all the characteristics of a good investment - it is scarce, useful, and if you protect your private keys extremely secure.

In addition to those highly desirable characteristics, it also has more amazing qualities:

1. Can be transferred anywhere in the world securely and, almost, instantly
2. Can be sold or bought in almost any fraction
3. Can be traded for other currencies or fiat on hundreds of exchanges
4. Can be used to buy real goods and services at hundreds of merchants