remotemass
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ASMR El Salvador
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August 27, 2014, 09:06:30 PM |
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It looks a bit like a Ponzi Scheme, as early adopters have an incentive to make bitcoin more poplular and more adopted for their own sake. But most definitely it isn't. Bitcoins are sound money and have all proprities of such, namely:
Divisibility A currency must be divisible so that units of its value can be paid to match the value of your purchase.
Portability For a currency to be convenient, it must be portable. You must be able to have access to it at any moment to spend it and you must be able to receive it just as easily.
Scarcity Money has to be sufficiently rare. If the medium of the currency is easily obtainable or reproducable, it will have little worth and be easily counterfeited.
Fungible Every unit of a currency must be equal in value. Diamonds are not fungible because there are other properties of a diamond that makes it worth more or less than any other diamond: size, clarity, cut, purity, etc.
Durability Money must not have a property that allows it to decay over time. Any perishable items are a good example of this: Vegatables, Spices, Tea, Milk, etc.
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Non-consumable.
The value of bitcoin is completly ruled by the market and basic law of supply and demand. The value of bitcoin is not determined by how much people think they are worth, it is determined my market forces, in the same sense that one kilogram of gold or one liter of water has the value that the market determines and not the value that people, individually, think they are worth. But, of course, people are always free to sell them or not, for any price they want, driving the market forces.
Bitcoin is great because it is the separation of Money and State, and the end of fractional reserve banking. It is fascinating and has a great future! So much potential to change the world...
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{ Imagine a sequence of bits generated from the first decimal place of the square roots of whole integers that are irrational numbers. If the decimal falls between 0 and 5, it's considered bit 0, and if it falls between 5 and 10, it's considered bit 1. This sequence from a simple integer count of contiguous irrationals and their logical decimal expansion of the first decimal place is called the 'main irrational stream.' Our goal is to design a physical and optical computing system system that can detect when this stream starts matching a specific pattern of a given size of bits. bitcointalk.org/index.php?topic=166760.0 } Satoshi did use a friend class in C++ and put a comment on the code saying: "This is why people hate C++".
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SwingBTC
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August 27, 2014, 09:15:40 PM |
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Not a ponzi, study more my friend.
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odolvlobo
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August 27, 2014, 09:16:50 PM |
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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
Please do a search before making posts like this. Your assertion has been proven wrong a hundred times already. Look up the definition of a Ponzi scheme (but not the investopedia version because it is confused). This one is good: http://en.wikipedia.org/wiki/Ponzi_schemeBitcoin is not that. Cased closed. You might consider Bitcoin a pyramid scheme, but then you would have to apply that label to any asset with limited supply, such as real estate or gold. Also, the cost of mining does not affect the price of bitcoin. because the supply of bitcoins is independent of the cost of mining.
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Join an anti-signature campaign: Click ignore on the members of signature campaigns. PGP Fingerprint: 6B6BC26599EC24EF7E29A405EAF050539D0B2925 Signing address: 13GAVJo8YaAuenj6keiEykwxWUZ7jMoSLt
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QuestionAuthority
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You lead and I'll watch you walk away.
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August 27, 2014, 10:38:11 PM |
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V8x8d
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August 27, 2014, 11:07:08 PM |
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It looks a bit like a Ponzi Scheme, as early adopters have an incentive to make bitcoin more poplular and more adopted for their own sake. But most definitely it isn't. Bitcoins are sound money and have all proprities of such, namely:
Divisibility A currency must be divisible so that units of its value can be paid to match the value of your purchase.
Portability For a currency to be convenient, it must be portable. You must be able to have access to it at any moment to spend it and you must be able to receive it just as easily.
Scarcity Money has to be sufficiently rare. If the medium of the currency is easily obtainable or reproducable, it will have little worth and be easily counterfeited.
Fungible Every unit of a currency must be equal in value. Diamonds are not fungible because there are other properties of a diamond that makes it worth more or less than any other diamond: size, clarity, cut, purity, etc.
Durability Money must not have a property that allows it to decay over time. Any perishable items are a good example of this: Vegatables, Spices, Tea, Milk, etc.
and
Non-consumable.
The value of bitcoin is completly ruled by the market and basic law of supply and demand. The value of bitcoin is not determined by how much people think they are worth, it is determined my market forces, in the same sense that one kilogram of gold or one liter of water has the value that the market determines and not the value that people, individually, think they are worth. But, of course, people are always free to sell them or not, for any price they want, driving the market forces.
Bitcoin is great because it is the separation of Money and State, and the end of fractional reserve banking. It is fascinating and has a great future! So much potential to change the world...
A Goldbug would argue that it isn't a reliable store of value or recognisable as wealth to most people. Until this is achieved BTC doesn't satisfy all the qualities of good money. I personally think it will in time, otherwise why would I own any.
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wasserman99
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August 27, 2014, 11:40:30 PM |
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Definition of 'Ponzi Scheme' 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 scam actually yields the promised returns to earlier investors, as long as there are more new investors. Source: http://www.investopedia.com/terms/p/ponzischeme.aspYou 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. The definition of a ponzi does not match what bitcoin is. If you wanted to choose a bad type of investment that bitcoin is then you should choose bubble because it much more closely resembles a bubble then a ponzi. A ponzi is something that later "investors" pay the earlier "investors" plus some amount of "return" this is not at all how bitcoin works. There are a set amount of bitcoin that are available to be "owned" which increases over time and in order to "win" the increased amount you do not need to pay anyone that already owns bicoin.
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btckold24
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★Bitvest.io★ Play Plinko or Invest!
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August 28, 2014, 12:32:25 AM |
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hahaha my new background image lol
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bitbaby
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August 28, 2014, 01:30:51 AM |
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Depends on what you call a ponzi scheme, a ponzi scheme as I understands promises a profit return in future, bitcoin doesn't comes with any such promise.
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Snorek
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August 28, 2014, 01:33:27 AM |
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Ponzi scheme is honey for masses. It promise you profits or maybe you are to believe that you will earn. With bitcoins there is nothing of that sort. You are free to invest if you think it is safe and will make you profit.
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littlewizard
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August 29, 2014, 12:30:29 AM |
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Have seen such kind of top for a lot of times.. Bitcoin have been accepted by a lot of people, and it has the future to be a payment system and long term investment approach, just dont know why some ppl keep saying it is Ponzi..
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NotAtOld
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August 29, 2014, 06:17:39 AM |
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In a ponzi scheme you need new people all the time to keep it going and profits are 'guaranteed' With bitcoin this is not the case. No guaranteed profits and new blood isn't necessary to keep it going
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AllYouCanDo
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August 29, 2014, 07:38:15 AM |
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take a look at litecoin pls... like wtf are u talking
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numismatist
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August 29, 2014, 07:53:03 AM |
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In a ponzi scheme you need new people all the time to keep it going and profits are 'guaranteed' With bitcoin this is not the case. No guaranteed profits and new blood isn't necessary to keep it going
Right, proper ponzi setups do heavily depend on a regulated grow, or crash is immanent. On the contrary the adaption rate to Bitcoin is completely unregulated. Bitcoin can only crash if people (all of them) decide to walk into the opposite direction.
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hua_hui
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August 29, 2014, 08:08:15 AM |
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OP, If you buy thousands of BTC in 2010 or 2011, I don't believe you still think Bitcoin is Ponzi scheme. You wouldn't criticize BTC of constantly increasing price, and will be happy to hold them.
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RappingSniper
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August 29, 2014, 08:49:48 AM |
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take a look at litecoin pls... like wtf are u talking
For clarity - LTC hashrate up, price down.
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wasserman99
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August 29, 2014, 09:15:24 AM |
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In a ponzi scheme you need new people all the time to keep it going and profits are 'guaranteed' With bitcoin this is not the case. No guaranteed profits and new blood isn't necessary to keep it going
Right, proper ponzi setups do heavily depend on a regulated grow, or crash is immanent. On the contrary the adaption rate to Bitcoin is completely unregulated. Bitcoin can only crash if people (all of them) decide to walk into the opposite direction. The price of bitcoin has been stagnant for several months now. The same is true for the market cap of bitcoin. Under this defination of a ponzi bitcoin should have crashed and burned by now as more people are not pouring money into it.
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LMGTFY
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August 30, 2014, 08:31:36 AM |
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Not really, at least not from the article you cited: according to an academic who's cited by a World Bank economist in one report there are such things as "naturally occurring ponzi schemes". I'm not sure I'd take Shiller's view of "financial bubbles that form without the manipulator’s baton but from finished natural market forces and with one person’s expectations feeding into another’s" and extrapolate from that that Basu's employer considers Bitcoin to be a naturally occurring ponzi. Heck, I'm not sure I'd even extrapolate as far as saying that the World Bank agree with Shiller (about financial bubbles) - I'd want to research that further before making that claim.
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galbros
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August 30, 2014, 09:59:14 AM |
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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
Good, as you note, it is not a ponzi scheme. Ponzi's have a central actor who uses new investor money to pay old investors. What you've described above is any scarce commodity, e.g. land. As the second poster to the thread pointed out, a simple review of the definition of Ponzi would illustrate the difference. Financial bubbles are possible with any financial instrument. Bubbles do not equal ponzi's, that's why they are called bubbles, regardless of what Schiller kinda sorta says.
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Soros Shorts
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August 30, 2014, 10:44:08 AM |
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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.
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fa
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August 30, 2014, 12:54:02 PM |
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It's Ponzi for haters and gold for believers.
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