The drawings made me think of this. Considering bitcoin actually has an oligarchy composed by Satoshi and his closest contributors back then(today on the foundation). It looks similar to this:
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O - (BTC oligarchy ) - O
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We can also change it to:
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O - (BTC foundation ) - O
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Topic: Bitcoin ponzi accusations (Read 2265 times)
People are confusing ponzi scheme with pyramid or MLM scheme but neither of them are like Bitcoin.
Ponzi scheme - A central actor (person or 'company') receives money with a promise of quick and significant returns. All people that buy into the scheme interact directly with the central actor who pays out money he has received from 'investors' as returns in order to drum up more investment in a fictitious investment opportunity. It is by design centralized, non-transparent and has a hierarchy of 2 levels - CEO of ponzi and everyone else. The investors do not realize they are being payed out with their own and others principle investments.
O O O
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O - (CEO of ponzi) - O
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O O O
Pyramid scheme - A central actor encourages a number of other actors to invest in something in return for something of little to no real world value in a fixed hierarchy on a promise of a) high profit margins on a cheap product and b) getting more new actors into the hierarchy directly underneath you feeding your personal revenue stream (and by design, those directly above you). This structure allows large profits to flow up the streams towards the tip of the hierarchy. A pyramid scheme by design is centralized and non-transparent in nature. People lower down are often not allowed to know exactly how far down they are in the pyramid, only seeing those they directly interact with.
(CEO of MLM)
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O O O
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O O OO O O O O O
Bitcoin - Every bitcoin is worth the same so every actor benefits proportionally with the growth of the network. Note that with a pyramid scheme the goods you purchase either have little utility like a poor quality 'how to' guide or a good whose market value is vastly lower than what you just paid to purchase it ($600 for 24 energy drinks). With bitcoin wealth is being traded 1:1. If you buy a bitcoin at a market price of $600, that is what it is worth at that moment and neither party can be said to have 'lost any wealth'. There is nothing stopping you from turning around and selling it right back to the market for market price, just like gold or an antique vase. Bitcoin has a flat hierarchy with no central authority and is transparent.
O - O O
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O-O O - O
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O O - O
What confuses people is the exponential growth and the religious zeal of some bitcoiners giving the impression it is a get rich quick scheme.
Ponzi scheme - A central actor (person or 'company') receives money with a promise of quick and significant returns. All people that buy into the scheme interact directly with the central actor who pays out money he has received from 'investors' as returns in order to drum up more investment in a fictitious investment opportunity. It is by design centralized, non-transparent and has a hierarchy of 2 levels - CEO of ponzi and everyone else. The investors do not realize they are being payed out with their own and others principle investments.
O O O
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O - (CEO of ponzi) - O
/ | \
O O O
Pyramid scheme - A central actor encourages a number of other actors to invest in something in return for something of little to no real world value in a fixed hierarchy on a promise of a) high profit margins on a cheap product and b) getting more new actors into the hierarchy directly underneath you feeding your personal revenue stream (and by design, those directly above you). This structure allows large profits to flow up the streams towards the tip of the hierarchy. A pyramid scheme by design is centralized and non-transparent in nature. People lower down are often not allowed to know exactly how far down they are in the pyramid, only seeing those they directly interact with.
(CEO of MLM)
/ | \
O O O
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O O OO O O O O O
Bitcoin - Every bitcoin is worth the same so every actor benefits proportionally with the growth of the network. Note that with a pyramid scheme the goods you purchase either have little utility like a poor quality 'how to' guide or a good whose market value is vastly lower than what you just paid to purchase it ($600 for 24 energy drinks). With bitcoin wealth is being traded 1:1. If you buy a bitcoin at a market price of $600, that is what it is worth at that moment and neither party can be said to have 'lost any wealth'. There is nothing stopping you from turning around and selling it right back to the market for market price, just like gold or an antique vase. Bitcoin has a flat hierarchy with no central authority and is transparent.
O - O O
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O-O O - O
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O O - O
What confuses people is the exponential growth and the religious zeal of some bitcoiners giving the impression it is a get rich quick scheme.
this is really good. To make it perfect, you should point out, that Ponzi and Pyramide Scheme are dependend on new investors. In a Ponzi Scheme you need them, because otherwise the scammer could not pay out investors (they will not reinvest forever). In a pyramid you need investors otherwise the new investors get no return. In Bitcojn you don't need new ones.
I think this confusion is, because Bitcoin has a few paralells with such systems:
- possibility of high and quick returns
- many people don't really know why Bitcoin has value. So the same with a Ponzi Scheme, investors don't really know why there is a return.
- there is a possibility that bitcoins are only worth a few cents tomorrow. So you invest an significant amount of your wealth and tomorrow your hands are empty.
First and thirh you have with any stock, too.
how should i defend bitcoin from this allegation though? a lot of close minded mainstream liberals (not bashing liberals, i am one myself) use this argument
Tell the truth:
BTC is not a Ponzi but does have some amazing similarities.
All capital goods that show price appreciation have those "amazing similarities".
i'm actually attempting to drive the price of Bitcoin to $0 through my use of a 21,000,000 pre-mined version of Litecoin to replace Bitcoin.. s ssshh (it's called SatoshiCoin)
how should i defend bitcoin from this allegation though? a lot of close minded mainstream liberals (not bashing liberals, i am one myself) use this argument
Tell the truth:
BTC is not a Ponzi but does have some amazing similarities.
The only similarity between Bitcoin and a ponzi scheme is that in a ponzi scheme, the earlier you get in on it, the more money you leave with.
That is also true of every successful legitimate investment, so it is not a meaningful comparison.
If bitcoin was a ponzi scheme, the SEC would have closed it a long time ago.
How would they go about doing that, exactly?"They'd have to start by taking away net neutrality." -Shit Bitcoin Fanatics Say
^^ Well put.
People are confusing ponzi scheme with pyramid or MLM scheme but neither of them are like Bitcoin.
Ponzi scheme - A central actor (person or 'company') receives money with a promise of quick and significant returns. All people that buy into the scheme interact directly with the central actor who pays out money he has received from 'investors' as returns in order to drum up more investment in a fictitious investment opportunity. It is by design centralized, non-transparent and has a hierarchy of 2 levels - CEO of ponzi and everyone else. The investors do not realize they are being payed out with their own and others principle investments.
O O O
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O - (CEO of ponzi) - O
/ | \
O O O
Pyramid scheme - A central actor encourages a number of other actors to invest in something in return for something of little to no real world value in a fixed hierarchy on a promise of a) high profit margins on a cheap product and b) getting more new actors into the hierarchy directly underneath you feeding your personal revenue stream (and by design, those directly above you). This structure allows large profits to flow up the streams towards the tip of the hierarchy. A pyramid scheme by design is centralized and non-transparent in nature. People lower down are often not allowed to know exactly how far down they are in the pyramid, only seeing those they directly interact with.
(CEO of MLM)
/ | \
O O O
/ | \ / | \ / | \
O O OO O O O O O
Bitcoin - Every bitcoin is worth the same so every actor benefits proportionally with the growth of the network. Note that with a pyramid scheme the goods you purchase either have little utility like a poor quality 'how to' guide or a good whose market value is vastly lower than what you just paid to purchase it ($600 for 24 energy drinks). With bitcoin wealth is being traded 1:1. If you buy a bitcoin at a market price of $600, that is what it is worth at that moment and neither party can be said to have 'lost any wealth'. There is nothing stopping you from turning around and selling it right back to the market for market price, just like gold or an antique vase. Bitcoin has a flat hierarchy with no central authority and is transparent.
O - O O
\ \ /
O-O O - O
\ / \
O O - O
What confuses people is the exponential growth and the religious zeal of some bitcoiners giving the impression it is a get rich quick scheme.
Ponzi scheme - A central actor (person or 'company') receives money with a promise of quick and significant returns. All people that buy into the scheme interact directly with the central actor who pays out money he has received from 'investors' as returns in order to drum up more investment in a fictitious investment opportunity. It is by design centralized, non-transparent and has a hierarchy of 2 levels - CEO of ponzi and everyone else. The investors do not realize they are being payed out with their own and others principle investments.
O O O
\ | /
O - (CEO of ponzi) - O
/ | \
O O O
Pyramid scheme - A central actor encourages a number of other actors to invest in something in return for something of little to no real world value in a fixed hierarchy on a promise of a) high profit margins on a cheap product and b) getting more new actors into the hierarchy directly underneath you feeding your personal revenue stream (and by design, those directly above you). This structure allows large profits to flow up the streams towards the tip of the hierarchy. A pyramid scheme by design is centralized and non-transparent in nature. People lower down are often not allowed to know exactly how far down they are in the pyramid, only seeing those they directly interact with.
(CEO of MLM)
/ | \
O O O
/ | \ / | \ / | \
O O OO O O O O O
Bitcoin - Every bitcoin is worth the same so every actor benefits proportionally with the growth of the network. Note that with a pyramid scheme the goods you purchase either have little utility like a poor quality 'how to' guide or a good whose market value is vastly lower than what you just paid to purchase it ($600 for 24 energy drinks). With bitcoin wealth is being traded 1:1. If you buy a bitcoin at a market price of $600, that is what it is worth at that moment and neither party can be said to have 'lost any wealth'. There is nothing stopping you from turning around and selling it right back to the market for market price, just like gold or an antique vase. Bitcoin has a flat hierarchy with no central authority and is transparent.
O - O O
\ \ /
O-O O - O
\ / \
O O - O
What confuses people is the exponential growth and the religious zeal of some bitcoiners giving the impression it is a get rich quick scheme.
The only similarity between Bitcoin and a ponzi scheme is that in a ponzi scheme, the earlier you get in on it, the more money you leave with.
That is also true of every successful legitimate investment, so it is not a meaningful comparison.
Its a good thing New York regulators dont read, watch, or listen to the news!!!! They would halt ALL apps for new exchanges.... 
I agree when I hear the word ponzi, i immediately dismiss anything that person has to say....reading and research is step one before engaging in an intelligent conversation about BTC. My 2 cent
I agree when I hear the word ponzi, i immediately dismiss anything that person has to say....reading and research is step one before engaging in an intelligent conversation about BTC. My 2 cent
The only similarity between Bitcoin and a ponzi scheme is that in a ponzi scheme, the earlier you get in on it, the more money you leave with. In Bitcoin, even the late adopters will make money on it, and the end goal is that you never "cash out" like you would in a ponzi scheme.
All allegations of Ponzi I'm seeing center around one very clear thread. They confuse "price" with "value" and are convinced that Bitcoin has no inherent value outside of new fiat money coming in. Thus the claim goes that newer adopters become the bag-holders for earlier-adopters.
Once you point out that a Ponzi scheme is a very specific thing where investors are defrauded by a single entity paying older investors with money from mew investors, then the conversation suddenly becomes "whatever, then it's a Pyramid".
I guess a form of money where your balance is secured by the largest single-task supercomputing cluster ever assembled in history, that lets you pay anybody in the world with no intermediary institution for almost zero fee has no inherent value!
Once you point out that a Ponzi scheme is a very specific thing where investors are defrauded by a single entity paying older investors with money from mew investors, then the conversation suddenly becomes "whatever, then it's a Pyramid".
I guess a form of money where your balance is secured by the largest single-task supercomputing cluster ever assembled in history, that lets you pay anybody in the world with no intermediary institution for almost zero fee has no inherent value!
The secure network gives BTC value, and...
The BTC story does have some amazing similarities to a Ponzi.
First, most people who do this lose money very quickly. Second, the people who do this are normally in and out of the market very quickly. Anyone who plans to hold a foreign currency for a long period of time will invest in foreign equities and bonds, not just in the currency. No one holds onto Euros, Dollars, etc. to get rich.
I guess you have no idea what seigniorage is. Sheesh good grief.
There we go.
All allegations of Ponzi I'm seeing center around one very clear thread. They confuse "price" with "value" and are convinced that Bitcoin has no inherent value outside of new fiat money coming in. Thus the claim goes that newer adopters become the bag-holders for earlier-adopters.
Once you point out that a Ponzi scheme is a very specific thing where investors are defrauded by a single entity paying older investors with money from mew investors, then the conversation suddenly becomes "whatever, then it's a Pyramid".
Once you point out that a Ponzi scheme is a very specific thing where investors are defrauded by a single entity paying older investors with money from mew investors, then the conversation suddenly becomes "whatever, then it's a Pyramid".
To a lot of people, "Ponzi scheme" is just a general term for anything economic that they don't like. The good thing about this kind of terminology is you can easily identify idiots whose opinions can be safely ignored.
2. It's not the same as fiat currency. No one buys dollars to stuff under their bed with the hope of striking it rich. And the big difference between fiat and bitcoin is the regulations. Fiat currencies are designed to operate at stated inflation rates (UK) or generally targeted inflation rates (US). They're built to have a set value that doesn't fluctuate wildly. Bitcoin doesn't have this. As there's no ability to adjust the supply of the currency, it could skyrocket or plummet and there's little investors could do.
The reasons do not matter, but trust me, many people do trade fiat currencies to get rich.
First, most people who do this lose money very quickly. Second, the people who do this are normally in and out of the market very quickly. Anyone who plans to hold a foreign currency for a long period of time will invest in foreign equities and bonds, not just in the currency. No one holds onto Euros, Dollars, etc. to get rich.
I guess you have no idea what seigniorage is. Sheesh good grief.
The world economy is a damn Ponzi scheme.
It rely on lies : infinite growing economy, infinite resources, blind trust in the church "Economy".
It is build to fail : exponentially growing dept, exponentially growing FIAT supply, exponentially growing inequalities, environmental destruction.
The ones who come early get rich, the others die miserably. The ones in between work in McDonald.
Then I suppose it is safe to say that we are from the early adopters?
2. It's not the same as fiat currency. No one buys dollars to stuff under their bed with the hope of striking it rich. And the big difference between fiat and bitcoin is the regulations. Fiat currencies are designed to operate at stated inflation rates (UK) or generally targeted inflation rates (US). They're built to have a set value that doesn't fluctuate wildly. Bitcoin doesn't have this. As there's no ability to adjust the supply of the currency, it could skyrocket or plummet and there's little investors could do.
The reasons do not matter, but trust me, many people do trade fiat currencies to get rich.
First, most people who do this lose money very quickly. Second, the people who do this are normally in and out of the market very quickly. Anyone who plans to hold a foreign currency for a long period of time will invest in foreign equities and bonds, not just in the currency. No one holds onto Euros, Dollars, etc. to get rich.
Anyone that thinks that Bitcoin is a Ponzi scheme either doesn't understand what a Ponzi scheme is or they don't understand how Bitcoin works ... or they are redefining "Ponzi scheme" for their own purposes.
Bitcoin has no operator, "it" does not pay returns, and "it" does not claim to earn a profit. It cannot be a Ponzi scheme. It is that simple.
Furthermore, the reasons that are generally given to support the claim also apply to gold, so gold must also be claimed to be a Ponzi scheme.
Quote
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.
Bitcoin has no operator, "it" does not pay returns, and "it" does not claim to earn a profit. It cannot be a Ponzi scheme. It is that simple.
Furthermore, the reasons that are generally given to support the claim also apply to gold, so gold must also be claimed to be a Ponzi scheme.
The world economy is a damn Ponzi scheme.
It rely on lies : infinite growing economy, infinite resources, blind trust in the church "Economy".
It is build to fail : exponentially growing dept, exponentially growing FIAT supply, exponentially growing inequalities, environmental destruction.
The ones who come early get rich, the others die miserably. The ones in between work in McDonald.
Then I suppose it is safe to say that we are from the early adopters?
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