how many of you use https://glbse.com/

[P4man]

According to the Bitcointorrentz guy the initial reaction to the product has been better than expected.  No he doesn't get business outside the bitcoin economy, he only deals with bitcoins.

yes, but the question is if those bitcoins are being bought for by dollars/euros, or do they come from people who ended up with bitcoins for some other reason, mining or otherwise. IOW, do they help grow the bitcoin economy by attracting real world funds, or is it just "bitcoin recycling", circulating amongst ourselves. I suspect its mostly the latter, and thats true for the majority of the current bitcoin economy.

I see nothing wrong with holding companies either.. they are getting dividends from other companies and sharing the profits.  Dividends don't depend on new people buying shares.  

But they do. How do holding companies make profit? Because they make profit on their investments, their shares. Shares only go up if new people buy in. Since almost everyone on that exchange seems to be invested in everyone else, buys each others ads and give each other dividends, since precious few companies (I use that word lightly) do any real business, the net result is that the "profits" only come from new influx of capital. New capital in to the exchange, not outside capital thats buying goods or services from those companies. Im sure you can see the difference. If no new shares are being sold, I predict there wont be a lot of companies there paying out dividends.

BitPonzi which advertised this, was the only one I know that tried this method, they were open about it and not even around anymore from what I can see.

Sure. Thats not the point.  THe point is that, taken as a whole, the exchange and the companies listed on them can only turn out profits/dividends as long as they find new investors. usually that doesnt last .

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[P4man]

The whole world must then be a ponzi scheme, since it's a closed system. We need to start reaching out to the economies of Mars and Venus.

You could argue our current economic system is indeed a ponzi scheme thats beginning to unravel. I wouldnt dispute that. But the point is not that its closed. Closed in to that same world economy is also all the real world wealth that the money represents. Real estate, gold, oil, food, whatever. The bitcoin economy so far, is almost completely disconnected from that. As long as real world goods and services are not traded in bitcoins, its value is nothing but speculation, a bubble. If you cant buy a bread with it, it might as well be WoW gold.

[Bitcoin Swami]

According to the Bitcointorrentz guy the initial reaction to the product has been better than expected.  No he doesn't get business outside the bitcoin economy, he only deals with bitcoins.

yes, but the question is if those bitcoins are being bought for by dollars/euros, or do they come from people who ended up with bitcoins for some other reason, mining or otherwise. IOW, do they help grow the bitcoin economy by attracting real world funds, or is it just "bitcoin recycling", circulating amongst ourselves. I suspect its mostly the latter, and thats true for the majority of the current bitcoin economy.

I see nothing wrong with holding companies either.. they are getting dividends from other companies and sharing the profits.  Dividends don't depend on new people buying shares.  

But they do. How do holding companies make profit? Because they make profit on their investments, their shares. Shares only go up if new people buy in. Since almost everyone on that exchange seems to be invested in everyone else, buys each others ads and give each other dividends, since precious few companies (I use that word lightly) do any real business, the net result is that the "profits" only come from new influx of capital. New capital in to the exchange, not outside capital thats buying goods or services from those companies. Im sure you can see the difference. If no new shares are being sold, I predict there wont be a lot of companies there paying out dividends.

BitPonzi which advertised this, was the only one I know that tried this method, they were open about it and not even around anymore from what I can see.

Sure. Thats not the point.  THe point is that, taken as a whole, the exchange and the companies listed on them can only turn out profits/dividends as long as they find new investors. usually that doesnt last .

It doesn't matter what my share price is .01 bitcoins or 100 bitcoins, I will still be giving out the same amount of dividends.  Somehow you don't seem to understand that.  If the bitcointorrentz price went to .0000001 a share he would still be paying out dividends.  It doesn't rely on new shareholders joining up.

As far as everyone using other people's services to advertise and such, thats how an economy works, would ad words be a better option?

[Bitcoin Swami]

The whole world must then be a ponzi scheme, since it's a closed system. We need to start reaching out to the economies of Mars and Venus.

You could argue our current economic system is indeed a ponzi scheme thats beginning to unravel. I wouldnt dispute that. But the point is not that its closed. Closed in to that same world economy is also all the real world wealth that the money represents. Real estate, gold, oil, food, whatever. The bitcoin economy so far, is almost completely disconnected from that. As long as real world goods and services are not traded in bitcoins, its value is nothing but speculation, a bubble. If you cant buy a bread with it, it might as well be WoW gold.

Nevermind, I see who I'm talking to now. 

[Nagle]

Other dividends come from investments in other companies and getting dividends from them (bitcointorrentz ect).  Also more btc's will trickle in from advertising from some of my sites that I create.

See, thats what I meant. "Hip pocket - breast pocket" operations we call it in Dutch. Its a mini bubble or even Ponzi. Company A investing in B and company B buying adds in C and C buying shares in A;  increasing each others share value and using that "profit" to pay out early investors.  Sorry guys, that's not how it works. Unless these listed businesses start earning money from outside their closed system, it can't and wont last.

BTW that problem isn't unique to GLBSE; it's something the entire Bitcoin economy seems to suffer from. If it can't reach out to the real world economy out there, its all pointless, or rather, worthless.

Right.  Go read High-yield investment program on Wikipedia. This scam isn't unique to Bitcoin. See this long list of failed High Yield Investment Programs.

This is why there's an SEC, with required 10-K filings, so you can see where the money comes from.

Before investing in Bitcoins, you should know at least 1) the history of Tulipomania, 2) what happened to the South Sea Bubble, 3) the story of John Law's bank, 4) how Enron blew it,  and 5) how Madoff did it. It's also worth understanding what happened to DigiCash and Beenz, and, conversely, why the currencies of Facebook, iTunes, and Zynga are successful.