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Topic: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly) - page 2. (Read 5834 times)

JoelKatz
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 21, 2013, 07:13:15 AM
#73
Quote from: oakpacific on March 21, 2013, 06:31:02 AM
It's not goalpost moving, you said "In a Ponzi scheme, you are told you can just buy the investment and sit back and wait for it to appreciate in value or dividends to be paid", this is something which can be 100% non-fraudulent, and thus not sufficient to define a Ponzi scheme.
I agree. "In a car, you can eat dinner" doesn't mean any place you can eat dinner is a car. I never claimed that was sufficient to define a Ponzi scheme, only that it was what distinguished a Ponzi scheme from a pyramid scheme.

Quote
And I don't know why you have to insist that a neutral instrument like bitcoin itself could become a Ponzi scheme just because what people do with it, unless the protocol itself is designed to help the creation of such a scheme.
It wouldn't be just the instrument itself. As I argued, numerous other components would be necessary, including prior investors using deception to lure future investors and including having no reasonable source of legitimate profits to be distributed to investors other than investments. (And, again, I don't personally believe those things are true of Bitcoin. But that's what you have to address to rebut the argument that Bitcoins are a Ponzi scheme.)

You keep changing your arguments and refusing to either respond to my arguments or agree with them. One last chance for me to keep my presumption that you are arguing in good faith:

1) Either agree with or rebut my argument that a Ponzi scheme does not need "operators" or that, to the extent it does, Bitcoin has them.

2) Either agree with or rebut my argument that Bitcoin is more like a Ponzi scheme than a pyramid scheme because there is no requirement that you recruit people to make money and no downline but instead the claim is more that you can just put money in, do nothing, and take money out. That is the key difference between a Ponzi scheme and a pyramid scheme.

(Of course, you are free to make new arguments or continue other ones. But you cannot simply ignore an argument I've made and move on to just something else. You must do me the courtesy of agreeing with or rebutting the arguments I've made as I've extended that same courtesy to you.)
oakpacific
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 21, 2013, 06:31:02 AM
#72
Quote from: JoelKatz on March 21, 2013, 06:16:55 AM
Quote from: oakpacific on March 21, 2013, 02:23:53 AM
And I totally disagree that a Ponzi scheme *must* have "operators" who make the misrepresentations. It is quite sufficient for the early investors to make those misrepresentations. And even so, I think it's reasonable to construe people like early adopters and Satoshi as "operators". These are not mathematically precise terms.
Every definition about Ponzi scheme out there mentions that it has to involve fraudulent activities ,check for yourself, if you want to make up your own definition, fine, but please make it clear in the first place. And yes, early investors could certainly setup Ponzi scheme with bitcoin as an instrument, but it would be silly to call bitcoin itself a Ponzi scheme, it's like not only calling Charles Ponzi's business a Ponzi scheme, but calling the postal reply coupon a Ponzi scheme as well.
This is goalpost moving. Please either agree with my argument that a Ponzi scheme need not have "operators" or rebut it.

I agree that a Ponzi scheme must involve fraudulent activities and said as much. I 100% agree that unless you believe that there's fraud, you cannot call it a Ponzi scheme. That's why I said that you can only argue Bitcoin is a Ponzi scheme if you argue that people buy Bitcoins because they believe that there's is or may be significant value to Bitcoins due to their present or future use as a means of exchange, they get that belief from people who stand to benefit from an increase in the price of Bitcoins, and that belief is not reasonable.


It's not goalpost moving, you said "In a Ponzi scheme, you are told you can just buy the investment and sit back and wait for it to appreciate in value or dividends to be paid", this is something which can be 100% non-fraudulent, and thus not sufficient to define a Ponzi scheme.

And I don't know why you have to insist that a neutral instrument like bitcoin itself could become a Ponzi scheme just because what people do with it, unless the protocol itself is designed to help the creation of such a scheme.
JoelKatz
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 21, 2013, 06:16:55 AM
#71
Quote from: oakpacific on March 21, 2013, 02:23:53 AM
And I totally disagree that a Ponzi scheme *must* have "operators" who make the misrepresentations. It is quite sufficient for the early investors to make those misrepresentations. And even so, I think it's reasonable to construe people like early adopters and Satoshi as "operators". These are not mathematically precise terms.
Every definition about Ponzi scheme out there mentions that it has to involve fraudulent activities ,check for yourself, if you want to make up your own definition, fine, but please make it clear in the first place. And yes, early investors could certainly setup Ponzi scheme with bitcoin as an instrument, but it would be silly to call bitcoin itself a Ponzi scheme, it's like not only calling Charles Ponzi's business a Ponzi scheme, but calling the postal reply coupon a Ponzi scheme as well.
This is goalpost moving. Please either agree with my argument that a Ponzi scheme need not have "operators" or rebut it.

I agree that a Ponzi scheme must involve fraudulent activities and said as much. I 100% agree that unless you believe that there's fraud, you cannot call it a Ponzi scheme. That's why I said that you can only argue Bitcoin is a Ponzi scheme if you argue that people buy Bitcoins because they believe that there is or may be significant value to Bitcoins due to their present or future use as a means of exchange, they get that belief from people who stand to benefit from an increase in the price of Bitcoins, and that belief is not reasonable.

You claimed that even given these things, Bitcoin could still not be considered a Ponzi scheme for a variety of reasons, each of which I've rebutted.

And, again, for the record I believe that Bitcoin cannot be considered a Ponzi scheme because that belief is reasonable. You can argue, if you want, that widespread Bitcoin adoption as a means of exchange is unlikely and you can argue that it's inevitable, but I don't think you can argue that it's unreasonable to believe it's possible.

To rebut the argument that Bitcoin is a Ponzi scheme, it is very important to understand the *precise* difference between Bitcoins and a Ponzi scheme so that we can make the strongest possible arguments. The belief that those who buy Bitcoins today could possibly see a profit from the sale of those Bitcoins for use as a means of exchange is reasonable. That's a very weak statement, and so it should be very easy to convince people of, and that's all you need to convince them of to rebut the various "Bitcoin is a scam" arguments.
mobodick
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 21, 2013, 05:49:59 AM
#70
Quote from: JoelKatz on March 21, 2013, 01:52:24 AM
I don't agree. One can certainly imagine a Ponzi scheme where the operator of the scheme never makes any false promises and just leaves that up to the early investors. So long as there is no realistic chance of a revenue source other than investment, earlier investors get money from later investors, and later investors are told that there is a reasonable expectation of an outside source of revenue, it's a Ponzi scheme.

But this is not what happens with bitcoin.
For one, no interest is involved unless you decide so.
So just by owning bitcoin you do not receive or require to give anything to support earlier investors.
Or maybe you can show me how my money goes to even earlier investors or how i get money from new investors?
And is a ponzi scheme still a ponzi if if can grow backwards and survive? Bitcoin has fluctuated quite dramatically in the past. I'm pretty sure i made some money off of old investors. So information can flow both ways and is not at all like the one way alley called ponzi scheme, right?
Maybe you can call it a balanced ponzi because anyone can cover for anyone and does so more or less at random.
oakpacific
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 21, 2013, 02:23:53 AM
#69
Quote from: JoelKatz on March 21, 2013, 02:07:59 AM
Quote from: oakpacific on March 21, 2013, 02:00:09 AM
I am sorry, but this is the real world definition of "pyramid scheme", which is somehow not equivalent to "Ponzi scheme", to be a Ponzi scheme fraudulent activities of operators have to be involved.
No. The difference between a Ponzi scheme and a pyramid scheme is that in a pyramid scheme, it is explicit that your revenue comes from those you sign up and recruiting is emphasized. In a Ponzi scheme, you are told you can just buy the investment and sit back and wait for it to appreciate in value or dividends to be paid.

And I totally disagree that a Ponzi scheme *must* have "operators" who make the misrepresentations. It is quite sufficient for the early investors to make those misrepresentations. And even so, I think it's reasonable to construe people like early adopters and Satoshi as "operators". These are not mathematically precise terms.

Every definition about Ponzi scheme out there mentions that it has to involve fraudulent activities ,check for yourself, if you want to make up your own definition, fine, but please make it clear in the first place. And yes, early investors could certainly setup Ponzi scheme with bitcoin as an instrument, but it would be silly to call bitcoin itself a Ponzi scheme, it's like not only calling Charles Ponzi's business a Ponzi scheme, but calling the postal reply coupon a Ponzi scheme as well.

JoelKatz
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 21, 2013, 02:07:59 AM
#68
Quote from: oakpacific on March 21, 2013, 02:00:09 AM
I am sorry, but this is the real world definition of "pyramid scheme", which is somehow not equivalent to "Ponzi scheme", to be a Ponzi scheme fraudulent activities of operators have to be involved.
No. The difference between a Ponzi scheme and a pyramid scheme is that in a pyramid scheme, it is explicit that your revenue comes from those you sign up and recruiting is emphasized. In a Ponzi scheme, you are told you can just buy the investment and sit back and wait for it to appreciate in value or dividends to be paid.

And I totally disagree that a Ponzi scheme *must* have "operators" who make the misrepresentations. It is quite sufficient for the early investors to make those misrepresentations. And even so, I think it's reasonable to construe people like early adopters and Satoshi as "operators". These are not mathematically precise terms.
oakpacific
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 21, 2013, 02:00:09 AM
#67
Quote from: JoelKatz on March 21, 2013, 01:52:24 AM
Quote from: oakpacific on March 20, 2013, 10:11:39 PM
Wrong, you could claim whatever you want about bitcoin, a certain stock, etc, but that doesn't make that particular investment a Ponzi scheme, as you are just another normal investor, you are in a no more special position than the next one in the line. What really matters is what the people "run" it say, which bitcoin doesn't have any, and every bit of information is open and freely accessible, if you don't look it up it's just your laziness and can't blame anyone else. Besides, as bitcoin is not run by any people, it will never promise you high income return, an essential part of the running of a Ponzi business, you will just have to do the risk assessment yourself.
I don't agree. One can certainly imagine a Ponzi scheme where the operator of the scheme never makes any false promises and just leaves that up to the early investors. So long as there is no realistic chance of a revenue source other than investment, earlier investors get money from later investors, and later investors are told that there is a reasonable expectation of an outside source of revenue, it's a Ponzi scheme.


I am sorry, but this is the real world definition of "pyramid scheme", which is somehow not equivalent to "Ponzi scheme", to be a Ponzi scheme fraudulent activities of operators have to be involved.
JoelKatz
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 21, 2013, 01:52:24 AM
#66
Quote from: oakpacific on March 20, 2013, 10:11:39 PM
Wrong, you could claim whatever you want about bitcoin, a certain stock, etc, but that doesn't make that particular investment a Ponzi scheme, as you are just another normal investor, you are in a no more special position than the next one in the line. What really matters is what the people "run" it say, which bitcoin doesn't have any, and every bit of information is open and freely accessible, if you don't look it up it's just your laziness and can't blame anyone else. Besides, as bitcoin is not run by any people, it will never promise you high income return, an essential part of the running of a Ponzi business, you will just have to do the risk assessment yourself.
I don't agree. One can certainly imagine a Ponzi scheme where the operator of the scheme never makes any false promises and just leaves that up to the early investors. So long as there is no realistic chance of a revenue source other than investment, earlier investors get money from later investors, and later investors are told that there is a reasonable expectation of an outside source of revenue, it's a Ponzi scheme.

If you believe that Bitcoin has no possible way of producing value other than by people buying Bitcoins in the hopes that the price will go up due solely to other investors who believe the same, you believe Bitcoin has no realistic chance of deriving significant value from being a means of exchange, and you further believe that some people are mislead into buying Bitcoins in the belief that it may ultimately have a source of revenue other than by investment, then it is reasonable to describe Bitcoin as a Ponzi scheme.

Just to be clear, I don't think those are reasonable beliefs. I think there's clearly a reasonable chance that Bitcoin will derive significant value from being a means of exchange and is most likely already deriving an amount of value from that source that is not insignificant.
oakpacific
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 20, 2013, 10:11:39 PM
#65
Quote from: JoelKatz on March 20, 2013, 09:09:41 PM
Quote from: oakpacific on March 20, 2013, 08:37:13 PM
Bitcoin doesn't fit the definition of a Ponzi scheme, wherever you look up the definition, a Ponzi scheme has to be fraudulent, i.e., giving people false information, there is no false information in bitcoin itself, everything is there for you to know.
It does *if* you believe that the only value Bitcoins could ever reasonably be expected to have comes from other people buying Bitcoins. The fraud then would be the false claim that Bitcoins are a potentially-viable future crypto-currency and thus may reasonably be expected to gain value as a means of exchange, not just a store of value. If that belief is implausible, but widely spread by people who stand to make money from Bitcoins appreciating in value, then it fits the definition of a Ponzi scheme. (Value propped up by unreasonable representations. Only source of value future investments. Early investors profit from the money put in by later investors. Later investors must lose money because there's no real source of produced value.)

That is, of course, a mighty big "if". Most of the people who claim Bitcoin is a Ponzi scheme (at least, in my experience) either don't realize that it's not a Ponzi scheme if there's a reasonable expectation of significant future value from a source other than investment or don't believe such an expectation is reasonable.


Wrong, you could claim whatever you want about bitcoin, a certain stock, etc, but that doesn't make that particular investment a Ponzi scheme, as you are just another normal investor, you are in a no more special position than the next one in the line. What really matters is what the people "run" it say, which bitcoin doesn't have any, and every bit of information is open and freely accessible, if you don't look it up it's just your laziness and can't blame anyone else. Besides, as bitcoin is not run by any people, it will never promise you high income return, an essential part of the running of a Ponzi business, you will just have to do the risk assessment yourself.
JoelKatz
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 20, 2013, 09:09:41 PM
#64
Quote from: oakpacific on March 20, 2013, 08:37:13 PM
Bitcoin doesn't fit the definition of a Ponzi scheme, wherever you look up the definition, a Ponzi scheme has to be fraudulent, i.e., giving people false information, there is no false information in bitcoin itself, everything is there for you to know.
It does *if* you believe that the only value Bitcoins could ever reasonably be expected to have comes from other people buying Bitcoins. The fraud then would be the false claim that Bitcoins are a potentially-viable future crypto-currency and thus may reasonably be expected to gain value as a means of exchange, not just a store of value. If that belief is implausible, but widely spread by people who stand to make money from Bitcoins appreciating in value, then it fits the definition of a Ponzi scheme. (Value propped up by unreasonable representations. Only source of value future investments. Early investors profit from the money put in by later investors. Later investors must lose money because there's no real source of produced value.)

That is, of course, a mighty big "if". Most of the people who claim Bitcoin is a Ponzi scheme (at least, in my experience) either don't realize that it's not a Ponzi scheme if there's a reasonable expectation of significant future value from a source other than investment or don't believe such an expectation is reasonable.
oakpacific
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 20, 2013, 08:37:13 PM
#63
Quote from: JoelKatz on March 20, 2013, 01:59:40 PM
If you think that the only significant source of value Bitcoins will ever have will be speculative value due to people believing their value will increase due to others who will believe the same, then it's not unreasonable to describe Bitcoins as a pyramid scheme, Ponzi scheme, or scam. This would make Bitcoins ultimately a zero sum game where every gain must be balanced out by somebody's loss with those late to the party footing the bill for those who got there sooner.

If you believe that Bitcoins may eventually (or already) have significant value as a means of exchange, then it is unreasonable to describe Bitcoins as a pyramid scheme, Ponzi scheme, or scam. Then buying and selling Bitcoins is not a zero sum game but a distribution of the the value Bitcoins create by providing a superior means of exchange.

Of course, even if it's reasonable to believe the Bitcoins will eventually have significant value as a means of exchange that still might not happen. In that case, Bitcoins aren't a scheme or scam but simply a good idea that failed. Most people will probably wind up losing money if that happens, but that will be because they took a calculated risk and it didn't pan out. That's the nature of risk.


Bitcoin doesn't fit the definition of a Ponzi scheme, wherever you look up the definition, a Ponzi scheme has to be fraudulent, i.e., giving people false information, there is no false information in bitcoin itself, everything is there for you to know.
Tirapon
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 20, 2013, 06:45:53 PM
#62
Quote from: JoelKatz on March 20, 2013, 01:59:40 PM

Of course, even if it's reasonable to believe the Bitcoins will eventually have significant value as a means of exchange that still might not happen. In that case, Bitcoins aren't a scheme or scam but simply a good idea that failed. Most people will probably wind up losing money if that happens, but that will be because they took a calculated risk and it didn't pan out. That's the nature of risk.


If bitcoin were to fail, I think the worst thing would be people saying 'I told you it was a ponzi scheme' who never bothered to understand the fundamentals...
JoelKatz
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 20, 2013, 01:59:40 PM
#61
If you think that the only significant source of value Bitcoins will ever have will be speculative value due to people believing their value will increase due to others who will believe the same, then it's not unreasonable to describe Bitcoins as a pyramid scheme, Ponzi scheme, or scam. This would make Bitcoins ultimately a zero sum game where every gain must be balanced out by somebody's loss with those late to the party footing the bill for those who got there sooner.

If you believe that Bitcoins may eventually (or already) have significant value as a means of exchange, then it is unreasonable to describe Bitcoins as a pyramid scheme, Ponzi scheme, or scam. Then buying and selling Bitcoins is not a zero sum game but a distribution of the the value Bitcoins create by providing a superior means of exchange.

Of course, even if it's reasonable to believe the Bitcoins will eventually have significant value as a means of exchange that still might not happen. In that case, Bitcoins aren't a scheme or scam but simply a good idea that failed. Most people will probably wind up losing money if that happens, but that will be because they took a calculated risk and it didn't pan out. That's the nature of risk.
oakpacific
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 20, 2013, 01:52:01 PM
#60
Quote from: AndyRossy on March 20, 2013, 12:54:28 PM
Quote from: oakpacific on March 20, 2013, 08:44:20 AM
Quote from: AndyRossy on March 20, 2013, 08:20:11 AM
Quote from: oakpacific on March 20, 2013, 08:10:57 AM
http://en.wikipedia.org/wiki/Intrinsic_value_(numismatics)   OK, there seems to be different definitions for it.

Quote
Bitcoin speculation is a pyramid yes.

So are nearly all speculations, no news here.


But, what % of bitcoin activity is speculation vs trade?  This is the scary part.

Most people who are "doing well" equate doing well, as having lots of dollar-worth in BTC, not the BTC themselves.

You can only realize bitcoin's full potential if people really put their money behind it, the market has to grow to a certain size and liquidity.

I can give you a example: I would like to run a bitcoin remittance service, but if the bitcoin market in the destination country is not big enough, my daily liquidation will be able to swing the market price by +/- 10 dollars, if I want to process enough volume to pay our salaries with the fee incurred. Another example would be cold storage of serious wealth, needless to say people will only use it if they can be certain that bitcoin market is big enough to ensure their coins would not become worthless after years.

People put money behind pirate, and other real world ponzis.  Are you arguing that large pyramids have more potential? I agree.

Geez,  "bitcoin needs people to put their money behind it to succeed"+"ponzi needs people to put their money behind it "=bitcoin is a bigger ponzi??? That's one hell of a logic.
mobodick
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 20, 2013, 01:18:36 PM
#59
Quote from: KTE on March 20, 2013, 12:21:44 PM
Quote from: mobodick on March 20, 2013, 07:48:41 AM
Quote from: KTE on March 20, 2013, 07:21:08 AM
Intrinsic value is for example the weight of a pound of gold, or the shiny color of it. The amount of money you get by selling it to someone is not intrinsic to the pound of gold, it can be taken away.

That's the simplest explanation I can give. You can expand that example to anything, including bitcoin. Bitcoin has no intrinsic value, it is just arbitrary data.

In any case, i think you are talking about intrinsic properties, not intrinsic value.
Any value needs a human to value it. Nothing has intrinsic value without a human to valuing it.


You're absolutely right, I was talking about intrinsic properties. Thanks for correcting me. Properties and value are connected though. The intrinsic value is value that comes from intrinsic properties, so in my two gold examples gold would have added intrinsic value because of its weight should you need something to hold things down, or due to its shininess should you want to signal someone from afar via reflection. Also, gold's chemical properties give it more added intrinsic value.

I would however question the need of humans for objects to have intrinsic value. It only requires a lifeform that can gain something from the object. Soil has intrinsic value for trees.
Ecosystems show a lot of structures that can be found in economy.
In the end it's all a form of cycling energy or entropy.
But i think we should consider them separately.
Our economy is based on mechanisms that simply are impossible in a natural ecosystem.
We deal in value, representations of value and representations of representaions of value.
Ecosystems are all about what you described as instrinsic value. It's mostly an intrinsic world. Very few animals are capable of things like reason and planning which is needed to consider the future value of things. Try explaining to a lion that this piece of gold will buy him a whole gazelle. The lion will propably only see the intrinsic value of your meat.
There are some examples of informational structures in nature but they are nowhere near anything like money based economy inside our society.
AndyRossy
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 20, 2013, 12:54:28 PM
#58
Quote from: oakpacific on March 20, 2013, 08:44:20 AM
Quote from: AndyRossy on March 20, 2013, 08:20:11 AM
Quote from: oakpacific on March 20, 2013, 08:10:57 AM
http://en.wikipedia.org/wiki/Intrinsic_value_(numismatics)   OK, there seems to be different definitions for it.

Quote
Bitcoin speculation is a pyramid yes.

So are nearly all speculations, no news here.


But, what % of bitcoin activity is speculation vs trade?  This is the scary part.

Most people who are "doing well" equate doing well, as having lots of dollar-worth in BTC, not the BTC themselves.

You can only realize bitcoin's full potential if people really put their money behind it, the market has to grow to a certain size and liquidity.

I can give you a example: I would like to run a bitcoin remittance service, but if the bitcoin market in the destination country is not big enough, my daily liquidation will be able to swing the market price by +/- 10 dollars, if I want to process enough volume to pay our salaries with the fee incurred. Another example would be cold storage of serious wealth, needless to say people will only use it if they can be certain that bitcoin market is big enough to ensure their coins would not become worthless after years.

People put money behind pirate, and other real world ponzis.  Are you arguing that large pyramids have more potential? I agree.
KTE
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 20, 2013, 12:21:44 PM
#57
Quote from: mobodick on March 20, 2013, 07:48:41 AM
Quote from: KTE on March 20, 2013, 07:21:08 AM
Intrinsic value is for example the weight of a pound of gold, or the shiny color of it. The amount of money you get by selling it to someone is not intrinsic to the pound of gold, it can be taken away.

That's the simplest explanation I can give. You can expand that example to anything, including bitcoin. Bitcoin has no intrinsic value, it is just arbitrary data.

In any case, i think you are talking about intrinsic properties, not intrinsic value.
Any value needs a human to value it. Nothing has intrinsic value without a human to valuing it.


You're absolutely right, I was talking about intrinsic properties. Thanks for correcting me. Properties and value are connected though. The intrinsic value is value that comes from intrinsic properties, so in my two gold examples gold would have added intrinsic value because of its weight should you need something to hold things down, or due to its shininess should you want to signal someone from afar via reflection. Also, gold's chemical properties give it more added intrinsic value.

I would however question the need of humans for objects to have intrinsic value. It only requires a lifeform that can gain something from the object. Soil has intrinsic value for trees.
Adrian-x
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 20, 2013, 12:19:24 PM
#56
Quote from: mobodick on March 20, 2013, 05:45:23 AM
Quote from: Adrian-x on March 20, 2013, 12:34:56 AM
@ HBBZ

....preventing the copying of digital information - no double spending (the blockchain and cryptography)...

In a cryptocurrency world there will be no limit to the ammount of money in the world.
Atcoins will pop up and become coin reserves of their own.
Altcoins can compete on any front with bitcoin and so bitcoin itself will never be a magical safe store of value.
That is a good point, and one of the features in my opinion that give Bitcoin its value - much like gold is the preferred rare element, I agree it is still a huge risk hence I'd be more comfortable with higher market volatility.

 I see no point in any Altcoins that don't improve on Bitcoin, an improvement would need to be substantial like a huge sift equal to that needed to justify a move from the current internet or, e-mail protocols.

So while I will never have gains like the "Bitcoin Nouveau riche", I will pedal the technical merits and push it as a store of wealth.  As long as you understand what Bitcoin is before you buy in, you only have to follow 2 rules 1) never sell for less then you paid, and 2) keep it safe, don't lose it.  From there an economy will emerge in a few years, or people will keep the dream alive by invest their savings in Bitcoin.

Whatever happens I see a greener future.
Adrian-x
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 20, 2013, 11:56:01 AM
#55
Quote from: darkmule on March 20, 2013, 01:03:06 AM
Quote from: Adrian-x on March 20, 2013, 12:34:56 AM
@ HBBZ

I won't deny Bitcoin could *edit* be have similarities with *edit*  a ponzi.

Then either you don't know what Bitcoin is, don't know what a Ponzi is, or know what both are, yet are not able to determine why they're not the same thing, or you do know what both are, yet are unwilling to tell the truth.

Bitcoin is not a Ponzi by any possible definition of either term.

Thanks for the correction, your analysis may be technically correct, and Bitcoin is not technically a Ponzi but there are similarities between Bitcoin and a Ponzi scheme.

Should the Bitcoin GDP develop to justify the current market cap (M1 money supply) then I would see no similarities, but the economy is underdeveloped, and can't develop while in deflation, hence the similarity.  

The PO has a point, that is what he is trying to evaluate, denying the point because of a technical definition over a metaphorical colloquial interpretation of the term Ponzi doesn't address the issue.
oakpacific
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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
March 20, 2013, 08:44:20 AM
#54
Quote from: AndyRossy on March 20, 2013, 08:20:11 AM
Quote from: oakpacific on March 20, 2013, 08:10:57 AM
http://en.wikipedia.org/wiki/Intrinsic_value_(numismatics)   OK, there seems to be different definitions for it.

Quote
Bitcoin speculation is a pyramid yes.

So are nearly all speculations, no news here.


But, what % of bitcoin activity is speculation vs trade?  This is the scary part.

Most people who are "doing well" equate doing well, as having lots of dollar-worth in BTC, not the BTC themselves.

You can only realize bitcoin's full potential if people really put their money behind it, the market has to grow to a certain size and liquidity.

I can give you a example: I would like to run a bitcoin remittance service, but if the bitcoin market in the destination country is not big enough, my daily liquidation will be able to swing the market price by +/- 10 dollars, if I want to process enough volume to pay our salaries with the fee incurred. Another example would be cold storage of serious wealth, needless to say people will only use it if they can be certain that bitcoin market is big enough to ensure their coins would not become worthless after years.
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