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Bitcoin is a Ponzi

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Re: Bitcoin is a Ponzi

#111

Post by wpietri »

wyc wrote: post #44

"By that definition, stocks too are ponzis. No. Stocks have an external source of revenue, namely the profit that the company makes by selling its products and services to customers..." This is a very simplistic view of equities markets and does not explain penny stocks, meme stocks (GME/AMC), TSLA, and other things that seem to escape traditional fundamental analyses.

It doesn't explain which horse wins in the 4th race at Churchill Downs, either. Major financial markets do attract scams and gambling-like behavior the same way picnics attract flies. The reputable exchanges work to shut that a lot of that out, of course, because it's bad business.

Tesla unfortunately undermines your argument. Has it been hyped to the moon? Definitely. Is there a good chance people will lose a lot of money on it? That too. But they make actual cars that get actual people actual places. That is the kind of actual value creation that underlies most stocks.

Re: Bitcoin is a Ponzi

#112

Post by imsd »

bb88 wrote: post #98
imsd wrote: post #43

Earlier quoted context omitted.

More and more, I'm hearing only the ETH value rather than dollar denomination. Personally, when I bid (or receive bids) on any of my NFTs, I'm only considering the ETH price. It's a new shift, but I think quite profound. Edit: If you're referring to mainstream media, the dollar value is all that most would be able to put into context. For those deep in the space, we're thinking about dollar values less and less. My p…

But ETH is still tied to the dollar and that's where it gets its value, is in the comparison to the dollar. I don't accept ETH for a used car I'm going to sell. I accept dollars, though.

I'm not sure I understand. You could denominate ETH in dollars, yen, euros, gold, or any other form of money/currency.

Although USD might be your preferred, many would happily sell a vehicle for compensation in BTC, ETH, silver, gold, euros, etc.

Re: Bitcoin is a Ponzi

#113

Post by rektide »

Since not a single comment agrees with the premise, I'll say: yes. Heck yes & obviously. A limited supply of increasingly hard to miner tokens is a clear & obvious indicator of a ridiculous scheme. There's very few examples in the world of the utility of a thing continually decreasing while the valuation ascends, yet Bitcoin has ascended pointlessly to a tens-of-thousands-of-dollars price-point.

There was a time when bitcoin was a possible way to either encode data into the blockchain, or to make financial transactions. These uses are still possible but at vastly less available price points.

Re: Bitcoin is a Ponzi

#114

Post by bin_bash »

amin wrote: post #35
bin_bash wrote: post #14

The article describes "5 features of a Ponzi scheme" which make it sound like some authoritative rules, but so far as I can tell these were simply made up just for this article. I can't find them referenced anywhere else.

There you go: https://en.wikipedia.org/wiki/Ponzi_scheme

That's the first place I looked. They're not on that page, I don't know why you linked it.

Re: Bitcoin is a Ponzi

#115

Post by baby »

yunohn wrote: post #106
dvt wrote: post #61

People use BTC/ETH/etc. in exchange for goods . I mean, I'm not a fan of cryptocurrency, but calling it a Ponzi scheme is just wrong. There are plenty of shitcoins out there that are purely pump and dumps, but it seems like BTC is here to stay.

> in exchange for goods Generally speaking, the people who provide the goods, use fiat for production of the good, and convert the crypto back into fiat to realize profits.

We don’t have data and what if they convert back into fiat? Would you say that foreign workers who get paid in USD and send money back home only use USD as a ponzi?

Re: Bitcoin is a Ponzi

#116

Post by yunohn »

topspin wrote: post #36
amin wrote: post #8

In a nutshell: A ponzi scheme has no external revenue, instead the payoffs come from new investors. This is the case when investing in Bitcoin.

The crucial difference that excludes Bitcoin (and any other such blockchain currency) is that a Ponzi scheme deceives investors by pretending it is profitable and the profits are derived from legitimate investments. Bitcoin et al. does not do this; there is no deception, no fraud and, therefore, no Ponzi.

> profits are derived from legitimate investments

Exactly, crypto doesn’t even claim to have legitimate investment profit. All of it is from newcomers pouring money into the pot…

Re: Bitcoin is a Ponzi

#117

Post by glenvdb »

sentinel wrote: post #24

Another day another “stay away from bitcoin” post on HN

The anti-Bitcoin sentiment on HN is frankly baffling to me.

It's one of the most exciting things happening in tech right now, and HN is at best ambivalent and at worst openly hostile to Bitcoin.

Why wouldn't the tech crowd be excited about digital native money which is perfect for the Internet?

Look at what's happening around the ecosystem with the Lightning Network, Impervious.AI, RGB etc.

https://rgb-org.github.io/ https://www.impervious.ai/

Re: Bitcoin is a Ponzi

#118

Post by satoshiiii »

Bitcoin is nothing new. See Rai stones: https://en.m.wikipedia.org/wiki/Rai_stones

It's the people invested in it that gives it value. Just like fiat, gold, art, stamps, useless antiques, etc. As long as it has value to someone, then it has value. I can't see it disappearing anytime soon. Yes, it might fall and rise in value but to disappear like any other Ponzi scheme? Don't hold your breath. Bitcoin is more than a decade old now. It will be the longest running "Ponzi" scheme. Be back in a decade to say I told you so. Bye!

Re: Bitcoin is a Ponzi

#119

Post by Kranar »

onlyrealcuzzo wrote: post #57
wyc wrote: post #44

"By that definition, stocks too are ponzis. No. Stocks have an external source of revenue, namely the profit that the company makes by selling its products and services to customers..." This is a very simplistic view of equities markets and does not explain penny stocks, meme stocks (GME/AMC), TSLA, and other things that seem to escape traditional fundamental analyses.

The vast majority of equities by value are not penny stocks or meme stocks.

The average P/E ratio of U.S. stocks is 38, meaning if the value of a stock really is primarily based on its ability to produce an external source of revenue, it would take 38 years for an investor to recoup the cost of a share of a company. When you adjust for 2% inflation, it would take 117 years for someone to recoup the cost.

Since that exceeds the lifespan of well over 99% of the population, it must follow that people are not investing in stocks because they expect the company to produce some external source of revenue that will eventually repay the principle. There are a host of complex reasons why people invest including wealth preservation, a desire to support a company they are interested in, speculation, a belief that investing is smart and the right thing to do... these are all fine reasons, but they have little to do with some kind of fundamental valuation that some people think stocks intrinsically have.

The vast majority of gains from the stock market have next to nothing to do with external sources of revenue.

Re: Bitcoin is a Ponzi

#120

Post by baby »

amin wrote: post #107
bugzz wrote: post #93

> By that definition, gold too is a ponzi. No, gold clearly fails to satisfy that definition on two counts. > First, few if any gold investors have expectations of profits. They generally invest in gold as a hedge -- a "store of value" -- that they hope will retain its value in case other assets go sour. I believe Bitcoin has potential to become the "new" gold. It's better in many ways. Does that mean I can only buy…

There are many cryptocurrencies who are nearly identical to Bitcoin, except that most don't have the widespread fame and support. In 2019 alone, 90,000 new crypto-currencies were created. Yes, there will only be 21 million bitcoins, but there are already countless, nearly an infite amount of copycat coins. This is not the case with gold.

There are plenty of other metals or “creations” like time pieces.
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