Bitcoin is a inherent Ponzi Scheme, please correct me if I'm wrong

[itsAj]

Well yeah, it's not exactly a Ponzi scheme per se, but it is a lot like oil and other natural resources, but they're a resource and not a currency. It is quite a lot like a natural occurring Ponzi scheme though. I don't anyone has actually explained this yet, the core point I'm getting at is if the supply is inherently built to continually diminish, then wouldn't the price continually increase, and that in itself is can't sustain a stable currency and the people who invested early will never be at risk because their asset will be guaranteed to continually appreciate in value

The same could be said about land. If I bought several hundred acres of land in rural PA as an investment would you say that I am investing in a naturally occurring Ponzi? After all the supply of land is limited.

This is actually the same logic that people use when they said that housing prices would never fall as a group throughout the united states. As we all very well know housing prices did fall by a lot.

With that being said, this is not what the definition of a ponzi is. A ponzi is when an investment run by some central person pays out early investors large returns with the new investment funds of later investors. This is not at all what happens with bitcoin. The price of bitcoin is determined by supply and demand, there is no one person who determines the return that investors of bitcoin receive.

[messibtc]

It has been proven over and over again that bitcoin isn't a Ponzi scheme, people should stop thinking about this.

[Hasher99]

After figuring out how the mining works, that it becomes increasingly more difficult obtain, wouldn't that just cause the price to keep on increasing, like it will never stabilize and outside of the speculative fluctuations, the price will always continue to rise and the guys who set it up and invested early sit on an asset that will continually appreciate in value. The distribution won't ever be even and prices will never stabilize for it to be an viable currency for trade. So the guys who created bitcoin really made a Ponzi scheme for themselves as the price is always set to rise due to the increasing mining difficulty

No its is not as so many people are onto the trend and we are the witness price increases cause the miners contribute onto generation of bitcoin.

[littlebeetle]

Don't let yourself be fooled by the average bitcoin shill. Most of them don't know it better:

Bitcoin IS a decentralized ponzi scheme which means there's nobody directly profiting from it (unlike other premined scamcoins for example) but it is the common creation of a useless good in constant search of a greater fool.

[littlebeetle]

Oh, an no: the price will of course not contine to rise forever (that's a ridiculous assumption often touted by bitcoiners) The bitcoin network will collapse when the mining reward is no longer big enough for rational investors to keep mining for profit. If you want I can lay out what is going to happen in that case. The problem is though we don't know when it is going to happen, it could be next year, it could be in 10 years (or it could never happen, because bitcoin is killed earlier because of another problem but it is going to happy for sure given a long enough timeframe). Until then many will waste their money on bitcoin.

[acs267]

Don't let yourself be fooled by the average bitcoin shill. Most of them don't know it better:

Bitcoin IS a decentralized ponzi scheme which means there's nobody directly profiting from it (unlike other premined scamcoins for example) but it is the common creation of a useless good in constant search of a greater fool.

The sarcasm is evident in this post. Either that, or a greater good called, 'Idiotic'. I'll go with the first one.

Please, before you use a phrase, understand what a 'Ponzi Scheme' is. Nobody owns Bitcoin. Thus, Bitcoin can't be a Ponzi scheme. Google it. Please - just Google it to save anyone from explaining, which I'm guessing someone already has. If it was a Ponzi scheme - It wouldn't be 'XBT' right now.

[future_quark369]

Nobody is promising you anything, you buy bitcoins to use them. A ponzi scheme is based on giving a percentage each month based in your investment.
Bitcoin is based on supply and demand.
You could argue that Bitcoin is a Ponzi scheme, but it does not promise anything to anyone. The only thing Bitcoin promises is an open source public ledger for transfer of value. If that were to fail then obviously Bitcoin would be worthless.

[chairforce1]

Bitcoin is a technology. People are the ponzi.

[Bobtimus]

Ok I'm looking to write an article for an Australian publication, so if anyone would want to use their real names for quotes, than please let me know. I'm not against Bitcoin or anything but one final query I have. How is it viable to use a currency that is in limited supply. Remember, this isn't land, or oil or gold where there is an inherent value in those resources i.e. you can use those resources for a wide variety of purposes, breeding cattle, running cars and what not. The problem with bitcoin is that you can only trade it with someone who also thinks it is valuable. Wouldn't it be Ponzi like, instead of an charismatic individual, we have an integrated system for a currency that never stops rising. Like if something is in limited supply, then it is highly likely the price will never stop rising, i.e. oil and land. As such, it can also be easily speculated as there will always be a limited supply and it takes one marketing campaign to drive up demand. We have seen that happen many times with land, gold and oil. For a currency, isn't that quite troublesome if people are touting bitcoin as the next financial revolution, where international trade will be facilitated, but its value highly subject to speculation.

[Bobtimus]

And for clarification, I'm not saying that it is a Ponzi, I know what a Ponzi is. But that doesn't distract from the Ponzi like speculative features that Bitcoin has to offer, all under a self-regulatory and non-institutional package. I think having a limited supply will inevitably cause the speculators to come in and destroy it for any other purposes except for speculation. As we have seen with many other things in the US, land, oil and gold. People bought land to speculate and not live in

[counter]

If Bitcoin had perfect distribution then would you still call it a Ponzi scheme?  I think this is what people don't get, it's only considered a Ponzi scheme because some think it is unfair they didn't get in early as those before them.  Free markets aren't perfect and neither is Bitcoin so you can expect things like speculation to take place for as long it will be tolerated IMO.

[BitCoinNutJob]

If BTC is a ponzi then many things are a ponzi..... housing market, gold market, education system etc.

[Cred]

Bitcoin is the way out of the ponzi scheme that is the dollar.

A ponzi scheme is when early adopters are promised a return on top what they put in that comes from later contributors.

The Fed created a ponzi scheme after the default of the gold standard by promising returns of 15% to bond holders to rescue the dollar from collapse. Where would this 15% return magically come from? From borrowers taking on ever more debt to buy ever increasing assets while savers buy the bonds at ever decreasing interest rates. Until they can't go any lower then it blows it up when no more takers of the debt can be found.

Now those early joiners from the 80s are sat on multi million pound houses after lowering their borrowing costs along the way while someone joining now is stuck between borrowing at 2% to buy a house that will take 25 years to pay for and probably be worth less at the end, buying stocks at huge risk or sticking their money in a bank to get less than inflation. Now they have another choice. They can save their money as bitcoin.

[beetcoin]

maybe bitcoin will become a failure and hit $0.. but one thing is for sure: it is not a ponzi scheme.

i really wish the people who accuse it of being so would actually look up the definition of what a ponzi scheme is, compare it to what bitcoin is, and then realize how ignorant a statement that is.

A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator.

[bitbinn]

bitcoin is not a ponzi scheme so many things that could be done with bitcoins

[lordxxx]

I think bitcoin not ponzi, but it is a currency that is trying to created and finally accepted by the public 

[ensurance982]

Certain aspects of Bitcoin do appear to have certain characteristics of a Ponzi scheme in so far, as early adopters (people on top of the typical Ponzi-pyramid or Ponzi-row) profit most from it, if they decide to hold their coins. But Bitcoin doesn't need new people in order to work or in order to remain functioning.

[QuestionAuthority]

Certain aspects of Bitcoin do appear to have certain characteristics of a Ponzi scheme in so far, as early adopters (people on top of the typical Ponzi-pyramid or Ponzi-row) profit most from it, if they decide to hold their coins. But Bitcoin doesn't need new people in order to work or in order to remain functioning.

If you are trying to compare it to a pyramid scheme it most certainly does need new people to work. Without new members in the market to drive the price up there would be nothing for the early adopters to sell. The value would drop to zero quickly and their wouldn't be enough buyers to sell all your coins to. If you think about it, in order for say Satoshi to sell the first million mined coins at just $1,000 it would likely take millions of buyers buying coins at the same time to keep the price stable. If Bitcoin has millions of buyers and users of coins daily then the adoption is large enough that it's not a pyramid scheme but a working economy.

[MichaelBliss]

It's not a Ponzi (finite supply of coins) or a Scheme (it's an open-source project).  So Bitcoin is not a Ponzi Scheme.  And you are using the word "inherent" incorrectly so it's definitely not "a inherent Ponzi Scheme".

[Bobtimus]

Ok maybe using the term Ponzi is a bit too much. Certainly saying Ponzi like might imply a lot more. But no one's disagreeing that bitcoin, with its finite supply is a speculative goldmine, just like oil, housing and other natural resources, except for that it does not have any inherent value - that it can't really be used for anything other than trade with someone else who also deems it valuable. Doesn't its speculative properties render it obsolete as an viable form of currency for trade, which is it's supposed primary purpose. Or is bitcoin made for speculative purposes? Satoshi made something else for people to speculate on, just like those dutch tulips. Forget Ponzi, think man made speculative bubble