This is basically a cloud mining ponzi scheme is disguise. No no, don´t get me wrong I´m not accusing twentyseventy of anything at all. They´re just showing us how it´s done. And obviously when BTC has fallen enough to wipe out all the conventional operations - this will be the last guy standing.
When difficulty is steadily increasing at a fast pace the ponzi is doing great. The operator pays out the dividends and keeps the B.SELL dividends for himself mostly. Not so when difficulty goes into a decreasing trend. Then the B.MINE dividend just has to increase, there´s no hedging from B.SELL and at some point the scheme just isn´t sustainable anymore.
I disagree with you here; people use 'Ponzi' as a very broad term and this is not what BDD is at all. A Ponzi Scheme, named after Charles Ponzi, takes
new payments in and uses those new payments to pay
existing fundholders a fictitious profit. Normally a Ponzi Scheme is accompanied by hype regarding high interest or guaranteed returns.
BDD takes
new payments and uses it to pay
new fundholders. Each day I publish the value per unit of MINE/SELL so everyone knows exactly how much each unit pair is worth.
I don't like using the word 'bet' because it invites gambling comparisons, so that's what I call unitholders 'speculators'. But essentially BDD is a bet on the difficulty; which way it will go - I take 2% up front to manage and publish updates.
Right now, you can see that people are betting heavily on MINE - those that purchase MINE at market are now calculating that their maximum return is under 10% (it varies based on the price of the last sale of course).
I see the reason for your comparison - the 'what goes up must come down' of the inevitability of mining in the current ecosystem - but I feel the need to express that that is
not Ponzi-like and I do
not benefit (directly) by the difficulty increasing, decreasing, or going sideways. Same with price - at $1 or $10,000, BDD works the same way.
Though it does have a defined endpoint, it has always been more fair, in my eyes, than cloud mining. There's no minimum price of mining viability, maintenance fees, or miner's luck to take into account - just cold, hard math. If you want to support the network or tell people that you're a miner, that's great and I respect that desire - but today's mining ecosystem is littered with the corpses of projects that were either a loser for the consumer, the company, or both (CEX.io, Cloudhashing, PBMining) or outright scams masquerading as a mining operation (Paycoin/ZenHash/Hashstaker/GAWza).
