Your coin becomes more valuable only if there's an influx of new users, only when greater fools buy your coins for more than you've paid for them. Hard to make it any simpler, man
No. Only when you buy an item & sell it at a profit by convincing the buyer that he could rinse & repeat.
Some examples:
1. You buy a Princess Di beanie; sell it to a crazy lady who adores Beanies & double your money: Not a ponzi.
2. You buy a Princess Di beanie; sell it to a crazy lady by convincing her that she can doble her money by doing the same: Ponzi.
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>In a ponzi the true asset value MUST be hidden from the investor and the payouts MUST be from new investment not from dividends or the asset gaining value
That is correct. It is only a ponzi if the true asset price is hidden. If they are advertising as a ponzi it is really a game. You can try to get more people to sign up because you know that the money comes from the newer "investors". That is not deceptive and not even against the law. A good source is the source you used earlier.
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Huh? Source of this nonsense?
This forum has a section dedicated to ponzis, these advertise themselves as ponzis, the word "ponzi" is often prominently featured in the name.
But... you say those aren't ponzis?
This forum has a section dedicated to ponzis, these advertise themselves as ponzis, the word "ponzi" is often prominently featured in the name.
But... you say those aren't ponzis?
That is correct. It is only a ponzi if the true asset price is hidden. If they are advertising as a ponzi it is really a game. You can try to get more people to sign up because you know that the money comes from the newer "investors". That is not deceptive and not even against the law. A good source is the source you used earlier.
Quote from: https://en.wikipedia.org/wiki/Ponzi_scheme
Often the high returns encourage investors to leave their money in the scheme, with the result that the promoter does not have to pay out very much to investors; he simply has to send them statements showing how much they have earned. This maintains the deception that the scheme is an investment with high returns
Your definition of a ponzi is simply wrong, because most people (including the ponzi promoters, the ponzi investors, the people who run this forum, and the statist thugs who prohibit these ponzis) agree that those ponzis (which, oddly enough, call themselves ponzis) are, in fact, ponzis.
The word "hidden" never appears in the wiki article you quoted. Not once. Because there's no need to hide anything.
From the same article: "The promoter sells shares to investors by taking advantage of a lack of investor knowledge or competence."
This is *exactly* what's happening in Bitcoin.
Most *sincere* Bitcoin believers (the ones not buying BTC only to turn around and sell it at a profit) don't understand economics but are absolutely convinced that it's the rest of the world -- those dull unvisionaries who can't think outside the box because got brainwashed in schools and universities -- that are clueless.
Think Dunning–Kruger effect2.
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>So gold is a 4000 year old ponzi?
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That's a topic in itself, but, for the sake of brevity, no. No more than any collectable, like Beanie Babies, is a ponzi. If you're happy with having a Beanie on your shelf, buy one. If you're buying it in hopes of getting rich, and create websites telling people that BTCeanies are the best investment ever OTH...
No benie babies are not a ponzi either. They are just a stupid thing to invest in. The supply of benie babies is potentially infinite and controlled by the supplier. Much like the Tulip mania, they collapsed because of overproduction. Which can't happen with bitcoin.The supply of 1990s Princes Di Beanie Babies can't be increased for the same reason the supply of 1870 S Seated Liberty Dollars can not increase: it's 2016 and you can't go back in time. It's not the soft, cuddly fur and the adorable bear face that give Princess Di Beanie value, it is the fact that a *limited number was issued.*
As far as the number of BTC being artificially limited to 21mil? Trivial to change with either a hard or a soft fork. Software's like that
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>And no, ponzis generally make no money at all. The money is simply stolen.
I'll have to read it later as I am about out of time at work. I would guess that a ponzi pays out the minimum amount to convince investors of the fake valuation of their asset. They likely pay specific investors that they believe will spread the word or anyone who has become suspicious of the fake price. I know they sometimes start out as a real investment, but the minute you start saying the asset is worth $X and then pay out from the investment pool instead of profits you are operating a ponzi because you are lying about the value.
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No, successful ponzis pay out really well until they don't. Otherwise the marks won't "invest." What's funnier still is the people running the ponzi sometimes +don't even admit to themselves they're running a ponzi*.
Read this http://www.nytimes.com/2015/03/05/magazine/the-pigeon-king-and-the-ponzi-scheme-that-shook-canada.html for a chuckle
Read this http://www.nytimes.com/2015/03/05/magazine/the-pigeon-king-and-the-ponzi-scheme-that-shook-canada.html for a chuckle
I'll have to read it later as I am about out of time at work. I would guess that a ponzi pays out the minimum amount to convince investors of the fake valuation of their asset. They likely pay specific investors that they believe will spread the word or anyone who has become suspicious of the fake price. I know they sometimes start out as a real investment, but the minute you start saying the asset is worth $X and then pay out from the investment pool instead of profits you are operating a ponzi because you are lying about the value.
Why lie about the current value when you can lie about *the future value*? Don't you want your lies to be unfalsifiable?
If it's 2013, I sell you a coin and tell you it's worth double what I'm asking for it, wouldn't your knee-jerk response be "then why are you selling it at half price?"
Now, if I told you that the coin you're buying for $1,200 will be worth $10,000 in 2014, you can't tell me I'm lying 'til 2014, and by then? SFYL
TL:DR: No, only the dumbest ponzis rely on hiding the value of the underlying asset. The smart ones exploit the marks' lack of knowledge, unbridled greed, and the old "we're coconspirotors" bit: "yeah, someone is gonna be had, but it ain't us, we're in this together, pulling one over on the rubes/Teh Man!"
