Topic: Why people think Bitcoin is a ponzi scheme? - page 3. (Read 5112 times)

I agree with you. As you point out, sustainability is not a 0 or 1 categorization. An obviously unsustainable system is analagous to a ponzi. Thus the close association between bitcoin and ponzi. I would not recommend bitcoin, it is not sufficiently sustainable.

Nothing is sustainable over a long enough period! It doesn't make everything a ponzi...

Bitcoin is analogous to a ponzi scheme because it is cannot be sustained in the long-term.
People have an intuition that this is true (though they don't know why), so they sloppily label it a ponzi.

A panic?   Right now?


Bad for the Bitcoin exchange rate or just a bad time to be trying to use FPGAs and GPUs to mine at a profit?


By the time ASICs ship the block reward subsidy will already have dropped to just 3,600 BTC mined per-day.  It doesn't matter if there is 24 Thash/s mining or 60 Thash/s mining away, or 600 Thash/s ... the same number of BTC are mined each day -- 3,600 BTC.


You are saying the distribution of those coins will change?  Like are you saying that many of the bitcoins will be going to those few who will receive ASICs first?   If so, then you might be correct.  If just one manufacturer ships, and the shipments are batches of pre-orders, then for a number of weeks that is very likely going to be true.

Let's say the initial ASIC shipments include 75 Thash/s (which is probably too low).  Today, the combined total of all existing FPGA and GPU miners is 25 Thash/s.   So those FPGA and GPU miners who were used to splitting 7,200 BTC per-day, will then be splitting just 900 BTC per-day   (3,600 BTC after the block reward subsidy drop, and then 25 Thash/s is only a quarter of the entire hashing capacity, after considering the 75 Thash/s added from the initial ASIC shipments.)

So yes, if you were receiving $100 worth of bitcoins in October (at $11 BTC/USD), that same hashing capacity will bring in just $12.50 worth of bitcoins in January (assuming BTC/USD is still $11 and also assuming that 75 Thash/s of ASICs is online by then).   So if you are mining with GPUs, either hope that the exchange rate skyrockets into record territory or plan to retire those power sucking GPUs as soon as ASICs ship, if not earlier at block 210,000 (Nov 28th).

But this has very little negative impact on the bitcoin exchange rate (which is generally what is inferred when using the term "ponzi scheme"), and I got the sense from your post that you felt it might.

It is because they don't know what a Ponzi scheme is. What they mean to say is that Bitcoin is a pyramid scheme.

By their definition, any asset that doesn't produce income is a pyramid scheme. If Bitcoin is a pyramid scheme, then every currency and every commodity is a pyramid scheme.

If your like me, you probably first heard about bitcoin because you could earn money with your computer.  Although I don't think bitcoin is a ponzi scheme, I think it does make some sense to see it that way. Just take the last few weeks for instant. In anticipation of the block reward halving prices have mostly stagnated but difficulty has skyrocketed. As if after block halving there will be no more money to be made, like the end of a ponzi. People seem to be mining every coin they can in anticipation of the end and although some are hoarding it seems many are selling to recoup quickly while they still can. Now I understand alot of that is because of anticipation of new hardware.

But if as many asic devices have sold as vendors and some others would like us to believe, I can only see that after a few months people will be dumping coins to make up for the huge increase in difficulty and struggling to make their investment back. Creating a very similar cycle to where we are now, a panic. Which I believe will continue until the cost of asic devices becomes much cheaper and people see it as a good investment again and not something that will only benefit early investors. Unless a discounted used market or major competition between vendors causes a huge price decrease shortly after release it seems to me that we are heading for another several bad months like the end of last year. I think increasing the power of bitcoin mining devices so quickly will cause a bubble in what a miner can earn as profit, I don't think the bitcoin market will be able to handle, short term, terrahashes getting into the hands of someone like Inaba. (does anyone seriously think he will not be the first one to have a bfl asic?)