Bitcoin is a 'two-phased' product, which makes it ponzi/pyramid-like

[Reatim]

OP has made 172 post (so far) with 0 merit to his name.


Reading this feels like FUD. Get people so scared they sell, so you can buy cheap.

It's gonna be the same with bullrun... Get people hyped to buy, so you can sell high.

what can we expect from this kind of account?they are popping everywhere to spread words against Bitcoin.

this is what happen always when Bitcoin and the crypto market starts to Dump really hard,it always follows by this kind of posts that is obviously created to add some fall from the prices.

anyway no one cares as the drama in this topic is like what others made when 2018 market dive sharp so expect some more before the halving comes.

[antikvark]

OP has made 172 post (so far) with 0 merit to his name.


Reading this feels like FUD. Get people so scared they sell, so you can buy cheap.

It's gonna be the same with bullrun... Get people hyped to buy, so you can sell high.

what can we expect from this kind of account?they are popping everywhere to spread words against Bitcoin.

this is what happen always when Bitcoin and the crypto market starts to Dump really hard,it always follows by this kind of posts that is obviously created to add some fall from the prices.

anyway no one cares as the drama in this topic is like what others made when 2018 market dive sharp so expect some more before the halving comes.

It is arguments what is important and not the motivations of the author.

[Anonylz]

Nothing good will come out of your argument especially the type that is obviously meant to create fud, how did you see btc as a pyramid/ponzi scheme? if that is the case, why would some countries government willing to give it a try, big merchants and some organizations accepting it! although, everyone is entitled to his/her opinion but i do not share your opinion on this at all, maybe you should go re-evaluate your perception about btc, personally, i don't see the resemblance of ponzi/pyramid scheme here.

[antikvark]

Nothing good will come out of your argument especially the type that is obviously meant to create fud, how did you see btc as a pyramid/ponzi scheme? if that is the case, why would some countries government willing to give it a try, big merchants and some organizations accepting it! although, everyone is entitled to his/her opinion but i do not share your opinion on this at all, maybe you should go re-evaluate your perception about btc, personally, i don't see the resemblance of ponzi/pyramid scheme here.

Today's governments are corrupt or ignorant and cannot differentiate legitimate from illegitimate market products.

[johnyj]

Dollar is debt based product, just like bonds.

They are very different

Every company or even private person can issue bonds, since that is just an IOU note for borrow USD. But not a single person can issue USD, only central bank can do (commercial banks do not issue USD, they only take USD deposit from other people or borrow USD from central bank, then lend out those USD)

And for the central bank part, they create USD to buy government bonds, thus give USD to governments. When the bond matures, the government return those USD to central bank and take back those bond papper. Government can return USD to central bank, not because they have provided goods and services for public in exchange for average Joe's USD, but because they collected taxes and sold new bonds to central bank for new USD

So I think the theory of 3 phase have its origin in consumable goods, where phase 3 is consumption. But trying to apply the 3 phases theory to financial products becomes difficult, thus your explanation of USD is complicated and not really reflect the reality. It just happened that USD get destroyed when government payback their loans from central bank, and you use that special case to match your 3 phase theory. In fact , USD never get destroyed when a commercial bank loan is repaid

Another example is gold, most of the gold never get consumed, neither liquidated, it stays in circulation forever, once produced, and no one call gold a ponzi/pyramid scheme. Cryptocurrency is very like gold, once made, forever in circulation

[johnyj]

In your definition Bitcoin lacks the third phase which is liquidation but i can cash out my Bitcoin any moment i wish for.
Regardless on how much you own, there are no restrictions to withdrawal. Which is in your point of view it is like a pyramid scheme and only early investors could cash out.

I guess his "liquidation" means totally consumed/destroyed and quit circulation, not normal usage of the word "liquidation" (sell). But that obviously does not apply to many financial products like stocks, funds etc... they could exist for decades and still in circulation

[antikvark]

Dollar is debt based product, just like bonds.

They are very different

Every company or even private person can issue bonds, since that is just an IOU note for borrow USD. But not a single person can issue USD, only central bank can do (commercial banks do not issue USD, they only take USD deposit from other people or borrow USD from central bank, then lend out those USD)

And for the central bank part, they create USD to buy government bonds, thus give USD to governments. When the bond matures, the government return those USD to central bank and take back those bond papper. Government can return USD to central bank, not because they have provided goods and services for public in exchange for average Joe's USD, but because they collected taxes and sold new bonds to central bank for new USD

So I think the theory of 3 phase have its origin in consumable goods, where phase 3 is consumption. But trying to apply the 3 phases theory to financial products becomes difficult, thus your explanation of USD is complicated and not really reflect the reality. It just happened that USD get destroyed when government payback their loans from central bank, and you use that special case to match your 3 phase theory. In fact , USD never get destroyed when a commercial bank loan is repaid

Another example is gold, most of the gold never get consumed, neither liquidated, it stays in circulation forever, once produced, and no one call gold a ponzi/pyramid scheme. Cryptocurrency is very like gold, once made, forever in circulation

They are debt based, that is, they have the "borrow-return" instance in their life cycle and that makes them equal. Regarding the rest. It is the taxpayers who provide goods and services in exchange for average Joe's USD when the borrower is the government. In that sense nothing changes since the average Joe receives goods and services when dollars are withdrawn from circulation via government's loan payments.

[antikvark]

In your definition Bitcoin lacks the third phase which is liquidation but i can cash out my Bitcoin any moment i wish for.
Regardless on how much you own, there are no restrictions to withdrawal. Which is in your point of view it is like a pyramid scheme and only early investors could cash out.

That's not liquidation but circulation. Liquidation is done by the issuer who in this phase must provide some value to the holder. Bitcoin lacks liquidation phase and that is why you can get value only from products brought by new investors, which is ponzi-like.

[johnyj]

They are debt based, that is, they have the "borrow-return" instance in their life cycle and that makes them equal. Regarding the rest. It is the taxpayers who provide goods and services in exchange for average Joe's USD when the borrower is the government. In that sense nothing changes since the average Joe receives goods and services when dollars are withdrawn from circulation via government's loan payments.

As I said, destroy of the central bank money is a very special case since the debt based money appears in 1971, other historical currency like gold and silver coins do not have this property, they never get "liquidated" by your definition. And other financial products like stocks also never get liquidated, or to say, their life cycle can be decades or centuries

[kemoglo]

How can you tell if you are the holder of a legitimate market product or a ponzi/pyramid-like product? It's simple. The life cycle of a legitimate market product has three phases. The creation phase, the circulation phase, and the utilization or liquidation phase. The life cycle of a ponzi/pyramid-like product has only two phases. The creation phase and the circulation phase. Let's start with the legitimate products.

Suppose that you bought an iPhone because you think it is cheap and you can sell it for a higher price in the future. That's the circulation phase of the iPhone. Once you sell it to someone, and that person starts to actually use it for its purpose(calls, texting...), iPhone is in utilization phase. Here we need to mention, that it is this phase where the value of the iPhone actually comes from. Meaning, the utilization of a product is the value of the product. When Apple was producing this product that was its creation phase. So the concept of phases in the life cycle of a product is pretty straightforward.

Market products such as dollars or bonds also have three phases. It is just that instead of utilization phase, they have the liquidation phase. Given that both dollar and bonds are debt based products, they operate similarly in the phases, the only difference being that dollar issuers(banks and borrowers) borrow and return goods and services from the public, while bond issuers borrow and return money. When corporations issue bonds and banks new units of dollars via loans, this is the creation phase of these products. Once they are created, the products enter the circulation phase. At the beginning of this phase, the corporations borrow money, while borrowers borrow goods and services from the public. Finally, the liquidation phase occurs when the corporations return money to the bondholders by paying principle, and when the borrowers return goods and services to dollar holders by making the loan payments. Namely, prior to loan payments, borrowers obviously had to give (trade) goods and services to dollar holders in order to get funds for these repayments. This is how the last dollar holders receive goods and services from the borrowers prior to liquidation. After the dollars are liquidated, that is, withdrawn from circulation they are again put into circulation with new loans. With loan repayments they are again liquidated and so on. So, dollars are in constant cycles of creation(loans), circulation(means of exchange) and liquidation (loan repayments). Hence, the three phases. And the same as with iPhone or bonds it is the third phase where the value of this product actually comes from, since liquidation is where the last dollar holders receive goods and services.

Now that we know the phases in the life cycle of legitimate market products, we can examine the illegitimate products. Let's say that you bought membership in a ponzi scheme. This is the circulation phase of that product. The creation phase was obviously when the scheme organizers issued this product. But, unlike in the above cases, these issuers never liquidate this product to pay value to its holders, nor it is utilizable like iPhone. Meaning, this product lacks the third phase, and as such, it is in an infinite circulation phase. In this phase, more recent investors bring in the three-phased market products and trade them for your two-phased product(membership). Once the scheme collapses, you, as the last membership holder, are left with nothing since no third phase exists in which the value is paid or received.

Bitcoin has exactly the same features. It is a two-phased product. Its issuing is phase one. Its circulation in the market is phase two. But given that its issuers never liquidate it to pay value to its holders, nor it is utilizable like iPhone, bitcoin lacks the third phase. As such, it has ponzi/pyramid-like features. Meaning, once you as an investor, brought in the three-phased market products, you are left only with hope that new investors will trade their three-phased products for your two-phased bitcoin. Once new investors stop investing, the scheme falls apart and you are left with nothing expect the digital record of membership.

I disagree with you because of the following, though it might feel as a bubble from time to time, it's because it behaves like one, but it doesn't mean it fully is. You say there's no utilization but there's so many things being developed or worked with precisely to expand Bitcoin's useability that I feel your conclusion is incredibly ill informed at best. While many on this forum are maximalists I believe that in the long run it'll be an altcoin that'll dominate the market, now, which one it'll be only time will tell. And there are several altcoins that their whole purpose is to expand uses of BTC, check Alpha, Plasma, Liquid, RSK and such.

So yeah, I wholeheartedly disagree, I feel that I can use my bitcoins and nobody promised me insane returns when I got in, so by definition it can't be a ponzi scheme.

[philipma1957]

How can you tell if you are the holder of a legitimate market product or a ponzi/pyramid-like product? It's simple. The life cycle of a legitimate market product has three phases. The creation phase, the circulation phase, and the utilization or liquidation phase. The life cycle of a ponzi/pyramid-like product has only two phases. The creation phase and the circulation phase. Let's start with the legitimate products.

Suppose that you bought an iPhone because you think it is cheap and you can sell it for a higher price in the future. That's the circulation phase of the iPhone. Once you sell it to someone, and that person starts to actually use it for its purpose(calls, texting...), iPhone is in utilization phase. Here we need to mention, that it is this phase where the value of the iPhone actually comes from. Meaning, the utilization of a product is the value of the product. When Apple was producing this product that was its creation phase. So the concept of phases in the life cycle of a product is pretty straightforward.

Market products such as dollars or bonds also have three phases. It is just that instead of utilization phase, they have the liquidation phase. Given that both dollar and bonds are debt based products, they operate similarly in the phases, the only difference being that dollar issuers(banks and borrowers) borrow and return goods and services from the public, while bond issuers borrow and return money. When corporations issue bonds and banks new units of dollars via loans, this is the creation phase of these products. Once they are created, the products enter the circulation phase. At the beginning of this phase, the corporations borrow money, while borrowers borrow goods and services from the public. Finally, the liquidation phase occurs when the corporations return money to the bondholders by paying principle, and when the borrowers return goods and services to dollar holders by making the loan payments. Namely, prior to loan payments, borrowers obviously had to give (trade) goods and services to dollar holders in order to get funds for these repayments. This is how the last dollar holders receive goods and services from the borrowers prior to liquidation. After the dollars are liquidated, that is, withdrawn from circulation they are again put into circulation with new loans. With loan repayments they are again liquidated and so on. So, dollars are in constant cycles of creation(loans), circulation(means of exchange) and liquidation (loan repayments). Hence, the three phases. And the same as with iPhone or bonds it is the third phase where the value of this product actually comes from, since liquidation is where the last dollar holders receive goods and services.

Now that we know the phases in the life cycle of legitimate market products, we can examine the illegitimate products. Let's say that you bought membership in a ponzi scheme. This is the circulation phase of that product. The creation phase was obviously when the scheme organizers issued this product. But, unlike in the above cases, these issuers never liquidate this product to pay value to its holders, nor it is utilizable like iPhone. Meaning, this product lacks the third phase, and as such, it is in an infinite circulation phase. In this phase, more recent investors bring in the three-phased market products and trade them for your two-phased product(membership). Once the scheme collapses, you, as the last membership holder, are left with nothing since no third phase exists in which the value is paid or received.

Bitcoin has exactly the same features. It is a two-phased product. Its issuing is phase one. Its circulation in the market is phase two. But given that its issuers never liquidate it to pay value to its holders, nor it is utilizable like iPhone, bitcoin lacks the third phase. As such, it has ponzi/pyramid-like features. Meaning, once you as an investor, brought in the three-phased market products, you are left only with hope that new investors will trade their three-phased products for your two-phased bitcoin. Once new investors stop investing, the scheme falls apart and you are left with nothing expect the digital record of membership.

This is false it is utilizable I mine and get heat. So it replaces the natural gas I would spend to heat my home.  I read your entire argument this is the sentence that fails your argue.

Please post back and admit you are wrong.
Also every electric space heater could be replaced by a mining ⛏ machine.

So if you use a delongei space heater  a miner like a modified s9 would give you heat a power bill and bitcoins.

while a space heater gives you heat and a power bill.

Too bad I did like your reasoning.

Know if you want to say it is not valued correctly you could be right.
But it does offer a viable byproduct during its creation.

[antikvark]

They are debt based, that is, they have the "borrow-return" instance in their life cycle and that makes them equal. Regarding the rest. It is the taxpayers who provide goods and services in exchange for average Joe's USD when the borrower is the government. In that sense nothing changes since the average Joe receives goods and services when dollars are withdrawn from circulation via government's loan payments.

As I said, destroy of the central bank money is a very special case since the debt based money appears in 1971, other historical currency like gold and silver coins do not have this property, they never get "liquidated" by your definition. And other financial products like stocks also never get liquidated, or to say, their life cycle can be decades or centuries

Gold and silver are goods. They are never liquidated by definition. They are utilizable. Stocks are liquidable, they represent the ownership of physical assets. Also, stocks pay dividend and this is how stockholders recieve value. In bitcoin you can get value only via three-phased products that new investors brought into the scheme - which is how every Ponzi or pyramid scheme operates.

[antikvark]

How can you tell if you are the holder of a legitimate market product or a ponzi/pyramid-like product? It's simple. The life cycle of a legitimate market product has three phases. The creation phase, the circulation phase, and the utilization or liquidation phase. The life cycle of a ponzi/pyramid-like product has only two phases. The creation phase and the circulation phase. Let's start with the legitimate products.

Suppose that you bought an iPhone because you think it is cheap and you can sell it for a higher price in the future. That's the circulation phase of the iPhone. Once you sell it to someone, and that person starts to actually use it for its purpose(calls, texting...), iPhone is in utilization phase. Here we need to mention, that it is this phase where the value of the iPhone actually comes from. Meaning, the utilization of a product is the value of the product. When Apple was producing this product that was its creation phase. So the concept of phases in the life cycle of a product is pretty straightforward.

Market products such as dollars or bonds also have three phases. It is just that instead of utilization phase, they have the liquidation phase. Given that both dollar and bonds are debt based products, they operate similarly in the phases, the only difference being that dollar issuers(banks and borrowers) borrow and return goods and services from the public, while bond issuers borrow and return money. When corporations issue bonds and banks new units of dollars via loans, this is the creation phase of these products. Once they are created, the products enter the circulation phase. At the beginning of this phase, the corporations borrow money, while borrowers borrow goods and services from the public. Finally, the liquidation phase occurs when the corporations return money to the bondholders by paying principle, and when the borrowers return goods and services to dollar holders by making the loan payments. Namely, prior to loan payments, borrowers obviously had to give (trade) goods and services to dollar holders in order to get funds for these repayments. This is how the last dollar holders receive goods and services from the borrowers prior to liquidation. After the dollars are liquidated, that is, withdrawn from circulation they are again put into circulation with new loans. With loan repayments they are again liquidated and so on. So, dollars are in constant cycles of creation(loans), circulation(means of exchange) and liquidation (loan repayments). Hence, the three phases. And the same as with iPhone or bonds it is the third phase where the value of this product actually comes from, since liquidation is where the last dollar holders receive goods and services.

Now that we know the phases in the life cycle of legitimate market products, we can examine the illegitimate products. Let's say that you bought membership in a ponzi scheme. This is the circulation phase of that product. The creation phase was obviously when the scheme organizers issued this product. But, unlike in the above cases, these issuers never liquidate this product to pay value to its holders, nor it is utilizable like iPhone. Meaning, this product lacks the third phase, and as such, it is in an infinite circulation phase. In this phase, more recent investors bring in the three-phased market products and trade them for your two-phased product(membership). Once the scheme collapses, you, as the last membership holder, are left with nothing since no third phase exists in which the value is paid or received.

Bitcoin has exactly the same features. It is a two-phased product. Its issuing is phase one. Its circulation in the market is phase two. But given that its issuers never liquidate it to pay value to its holders, nor it is utilizable like iPhone, bitcoin lacks the third phase. As such, it has ponzi/pyramid-like features. Meaning, once you as an investor, brought in the three-phased market products, you are left only with hope that new investors will trade their three-phased products for your two-phased bitcoin. Once new investors stop investing, the scheme falls apart and you are left with nothing expect the digital record of membership.

This is false it is utilizable I mine and get heat. So it replaces the natural gas I would spend to heat my home.  I read your entire argument this is the sentence that fails your argue.

Please post back and admit you are wrong.
Also every electric space heater could be replaced by a mining ⛏ machine.

So if you use a delongei space heater  a miner like a modified s9 would give you heat a power bill and bitcoins.

while a space heater gives you heat and a power bill.

Too bad I did like your reasoning.

Know if you want to say it is not valued correctly you could be right.
But it does offer a viable byproduct during its creation.

You get heat from electric energy not from bitcoin. Bitcoin is a number in a database.