Topic: Are terms pyramid scheme and ponzi scheme misused? (Read 4758 times)

He is not only an arrogant schmuck but he is also a hypocritical one at that. Just read below the two quotes of him, one from this thread and the other from another thread made a few days ago

There is no such term as "intrinsic value" in modern day economics...

And it is very good that this thread is not self-moderated and you are not its author, so you can no longer delete posts of your opponents proving where you're wrong and where you just stick to outright lies

Yeah I know.

The guy is bored and sad that he missed out on Bitcoin.  If you are enjoying yourself, great, but if you are trying to reason with him, you may be disappointed. 

Do you want to derogate our most eminent, most knowledgeable and godliest econometrists Bernanke and Krugman by implying that the fiat, the best money ever, is a scam?

You prefer to avoid the salient point (NO INTRINSIC VALUE = SCAM) by obfuscating with arbitrarily chosen narrow definitions?

So you want to discuss the Ponziness or the pyramidness of bitcoin with a relativistic vocabulary?

Semantics of naming is irrelevant. What matters is the Bitards believe Bitcoin has an intrinsic value. If they are incorrect as I have argued in great detail over the past week or two, then they are scamming all the greater fools by spreading their delusion via word-of-mouth.

But who started that delusion? And pitched it and continues to pitch it on these forums?

You know the names well. The "experts" who also happen to be early adopters. One is involved with SatoshiDice which accounts for 59% of the transactions in Bitcoin last time I checked.

I would like to add that in Pyramid the participants do the requirement for their own benefit...

In a Ponzi, the participants believe that the operator invests smartly, but he either invests badly or not at all, repaying old participants with money from new entrants, thus the participants are defrauded.

In a pyramid, the participants know that there is no investment, they just can't fathom how many new participants are needed to pay off the old. It is exponential, so after a while there are no more entrants available and the scheme falls apart.

The difference is what the participants believe is inside the scheme.

You missed the failure mode.

If miner revenue is to be only a tiny fraction of commerce, then 50+% attack is extremely likely.

Only perpetual coin rewards can secure the network adequately.

Otherwise transaction fees must be too high, and also significant revenue from transaction fees allows the Transactions Withholding Attack.

Good work npl, a .30 cent transaction fee is already starting to get heavy, the only reason it's toterable is that users are still shielded from it by the debasement coins being paid to miners.  I suspect we will have another lowering of minimum fees at this rate.  I can't stress how much this already well established and now EXPECTED practice of fee lowering demonstrates that the BTC really has no intention of ever being transaction fee supported.

Your estimate of Electrical costs, can you summarize how you arrive at it?  Are you assuming all ASIC?  I think their are still a lot of inaccurate estimates floating around from the GPU era.  The best ASICs are around 1 J/GH which would mean the 5 million GH/s are consuming 5 million J/s or 5 million watts, or 5,000 kW, or 5MW (the output of a very small power-plant but not really that much in the grand scheme of things).  5MW times 24 hours is 120,000 kw/h, times 15 cents a kw/h is just $18,000 a day.  Naturally a lot of the mining hardware is a generation or two behind so an estimate of as much as 10 times as much is'nt unreasonable, but we would want to discount these marginal miners because the network truly dose not need them.

So with Transaction fees in the ~$30,000 range it looks like the fees are roughly able to pay for electricity, a somewhat surprising result actually.  The problem is that hardware acquisition and depreciation is now the primary cost to miners, and we fully expect electrical costs to continue to rise as more miners come online.

The stats are here, it's 0.69% of miner revenue (good guess!). See my post above on the transaction fees - only around $0.30.

The actual average fee per transaction is around $0.30 (divide 'total transaction fee' by 'number of transactions' here):

http://blockchain.info/stats

what's scary is the electricity cots - $11 mil per 24 hrs??

EDIT: the electricity stat is BS. I'd estimate total cost at around $150,000 per day. Don't know why they publish this? Do they want to make it seem that mining is not profitable?

Bitcoin it's a technology, not a scheme of any kind, but speculators could of course use it to scam investors the same way they do everyday on Wall Street.

 Fiat currecies are in fact a ponzi.

Not sell? Not counting the fact that early adopters still have to pay for food, shelter, and bills, don't forget that these early adopters are some of the biggest investors in Bitcoin businesses. These newly-minted millionaires are spending millions to pay other programmers and designers to build new Bitcoin services and hardware.

Okay, keep in mind I'm a trader by training, so don't yell at me when I say...

I think it's WAY more like a stock IPO.

The inventor gets a huge chunk upfront (inventor, remember). He hopes it becomes worth something in the future.

Then there are the financiers (banks, those that set up the shares, etc). These would be the miners and early adopters. They get to buy at a special lower price. $1, wow. Sweet deal now.

Then the public steps in and buys and sells. Drives the price up and down.

Now just like an IPO, the early adopters cannot liquidate their holdings too easily. They would likely drive the price down with large dump selling. I don't know, to sell 1000 bitcoins is going to have to find people willing to pay 1 million dollars. So liquidity is poor.

So just like a stock, they need to wait until their holdings vest, and sink into the market before they can begin pulling cash out.

So rich in paper, cash -- not so much.

So it feels just like an IPO to me.

Are IPOs ponzi schemes. Wait don't answer that : )

: )

cj

Yes I would like to see it as a percentage, but remember BTC has already established a president of LOWERING MINIMUM FEES to keep fees affordable as the value of BTC rises.  That is continually pushing back the point when the Network can sustain itself by transaction fees because it counteracts the rise in revenue that miners would normally see.  I would not be at all surprised if Fees are actually dropping as a percentage of mining revenue.  By my Math the transaction fees are 0.6% of miners revenue now, but I lack the data to establish a trend, I can see that transactions measured in coins has been fairly constant at 25-50 per day for a year, this seems to be what people are willing to spend and what miners are willing to take.  If that number holds then we would see Transaction being about half of miners revenue in ~30 years, but I expect a continuing decline in fees such that this point is pushed out 1 year per year, a messiah that people will continually be withing for.

But your BTC early adopters have already decided that they will not sell, rather they expect to hold coins until they are wealthier then the current 'elites', thus your giving the current elite no peaceful option to preserve their wealth and position by buying into BTC.  Your ultimate aim is to over throw them and become the new elites, which is the OLDEST game in history btw.  But your trying to win that struggle with a mere software protocol, a tool which is completely dependent on the infrastructure of the internet, hardly a reliable weapon.  Groups that typically win battles to overthrow elites have access to their own independent sources of power.

Oh! I thought by "society" you meant "society," as in the socialism-voting middle to lower class, not the wealthy elite who will likely be one of the first to move their money into bitcoin, and out of the reach of money-grubbing government. You know, the one that relies on its money-grubbing to pay for things like big guns and winter-causing nuclear weapons. Plus no amount of big guns or nukes can decrypt a password or a private key.