Bitcoin is a Ponzi • Hacker News Board

Re: Bitcoin is a Ponzi

#181

Post by hanniabu » Thu, Oct 07, 2021, 4:43 AM UTC

wpietri wrote: post #72

dhsysusbsjsi wrote: post #9

I think this is simplistic. It’s viewing Bitcoin through a lens of a traditional Ponzi scheme assuming people that trade their fiat currency for Bitcoin are investing, with a view to one day take profits back into dollars. What if people are seeing discussion of minting a trillion dollar coin, trillions in QE, 25% of all dollars created in the last 12 months…and concluding that fiat currency is in an endgame and they…

It is absolutely not finite. Coinmarketcap.com lists 7048 cryptocurrencies, with 96 of them having nominal values over $1 billion.

OP mispoke and meant the supply is finite.

Re: Bitcoin is a Ponzi

#182

Post by rufus_foreman » Thu, Oct 07, 2021, 4:43 AM UTC

>> People invest into it because they expect good profits

OK yeah that's called an investment. Most people don't invest in stuff they think will be unprofitable. Maybe you're different?

>> that expectation is sustained by such profits being paid to those who choose to cash out

Profits aren't paid out from Bitcoin. There are no profits being paid out. That's sort of the key difference. Bitcoin doesn't send you a check if you own it.

>> the operators take away a large portion of this money

If there were "operators" of the Bitcoin scheme, they left billions of dollars on the table. Which...I hope they did!

But sadly, unlikely.

Re: Bitcoin is a Ponzi

#183

Post by nightski » Thu, Oct 07, 2021, 4:43 AM UTC

People do not invest in USD because they expect a gain? Anyone holding cash is doing exactly this. Because the only rational reason to hold USD instead of spending it or converting it to some other asset/investment is because you think it's value is going to either hold or grow more than other options.

If people expected no gain in USD (or inflation) then they would not hold USD and instead choose assets or other investments.

If one does expect profits they can achieve that not just by BTC going up in value, but other currencies being inflated.

I myself hold bitcoin as a store of value and do not necessarily expect profits. I simply feel that it will hold it's value better than other things. I could be wrong, but that doesn't mean it is a Ponzi.

Re: Bitcoin is a Ponzi

#184

Post by chowchowchow » Thu, Oct 07, 2021, 4:43 AM UTC

hanniabu wrote: post #154

muglug wrote: post #94

Earlier quoted context omitted.

A very very minute percentage of bitcoin is used in transactions. The vast bulk of it is seen by its users as an investment. And historically there have been Ponzi schemes that allowed people to cash out before the scheme fell apart — but it was always a small minority cashing out.

So no different than gold?

It’s clearly argued that since a majority of demand for gold is from non-investors it doesn’t fit the definition..

Re: Bitcoin is a Ponzi

#185

Post by rubinelli » Thu, Oct 07, 2021, 4:43 AM UTC

zacmps wrote: post #163

jliptzin wrote: post #147

Bitcoin is a lot of different things to a lot of different people. The fact that it satisfies a certain set of conditions of a Ponzi scheme does not invalidate the myriad current and future applications of crypto. The social security administration could also be considered a Ponzi scheme, but it still provides tremendous value to a lot of people.

I'm sorry, what applications? Besides accelerating global warming there doesn't seem to be anything it's good at.

That's not true. It's fantastic for ransomware and scams in general.

Re: Bitcoin is a Ponzi

#186

Post by lalaland1125 » Thu, Oct 07, 2021, 4:43 AM UTC

dosenbrot wrote: post #122

sailingparrot wrote: post #52

Earlier quoted context omitted.

> What if people are seeing [...] What if my grandmother had wheels? More seriously, how many people do you know are seeing what you are talking about? Everyone I know that invested in crypto did so hoping to trade it back later on for more fiat than they paid. Sure, maybe it's a biased sample, but it's a sizeable sample and I do not know even a single person that traded their fiat for crypto definitly.

How about the stock market? Everyone I know that invested in stocks did so hoping to trade it back later on for more fiat than they paid.

Stocks produce value though. They represent shares of companies that make useful products that generate actual value.

When you own a share of Apple you literally own a fraction of their factories, IP, etc.

Re: Bitcoin is a Ponzi

#187

Post by amin » Thu, Oct 07, 2021, 4:44 AM UTC

BrianHenryIE wrote: post #173

zacmps wrote: post #163

Earlier quoted context omitted.

I'm sorry, what applications? Besides accelerating global warming there doesn't seem to be anything it's good at.

Commerce.

What percentage of people who bought bitcoin today, bought it with the intent of making normal commerce-related transactions?

Re: Bitcoin is a Ponzi

#188

Post by Sevii » Thu, Oct 07, 2021, 4:44 AM UTC

coz131 wrote: post #142

PanosJee wrote: post #130

Earlier quoted context omitted.

Comparing all those ERC20 tokens to Bitcoin is like comparing a Wix website to Google / Facebook

How about non ERC20 token? So a WIX website isn't as legitimate as Google/FB? Who is this arbiter of legitimacy?

The users, it’s the same network effect that prevents me from making a Facebook clone and taking market share.

Re: Bitcoin is a Ponzi

#189

Post by [deleted] » Thu, Oct 07, 2021, 4:44 AM UTC

Kranar wrote: post #119

onlyrealcuzzo wrote: post #57

Earlier quoted context omitted.

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…

[deleted]

Re: Bitcoin is a Ponzi

#190

Post by HashBasher » Thu, Oct 07, 2021, 4:44 AM UTC

analog31 wrote: post #146

lpa22 wrote: post #11

> 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 strongly believe bitcoin will be the new gold one day, if it doesn't pan out as a currency. It sounds insane, but I actually believe the Winklevoss twins when they say Elon and SpaceX will be able to mine gold on asteroids within the next 20 years, which would crash the price of gol…

My bank account is a digital store of value, in US dollars. I never visit the bank (was impossible during the lockdown), rarely handle cash, and when I do, it's inconvenient.

Your digital store of value promises to lose around 2% of its buying power every year, and they beat that by a lot this past year.