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Bitcoin is a Ponzi

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Re: Bitcoin is a Ponzi

#281

Post by panarky »

dybber wrote: post #201
hanniabu wrote: post #154

Earlier quoted context omitted.

So no different than gold?

https://www.usfunds.com/slideshows/the-many-uses-of-gold/ Go to Coinbase and try to figure out how to use Bitcoin to buy something with. All they talk about is Bitcoin as an investment. A currency can’t be an investment as the expectation that it will rise in value undermines the main quality of a currency, which is to maintain a stable value, so it can be used as intermediary.

Most Ponzis and pyramid schemes are built on something that has a legitimate use.

After all, the eponymous scheme by Charles Ponzi was built on legitimate postal reply coupons.

So a list of non-monetary uses for gold is not evidence that its monetary uses are not Ponzis.

Most financial instruments are at least Ponzi-adjacent in that their value is derived from the expectation that other market participants will pay more for them than you did.

Whether it's real estate or equities, precious metals or cryptocurrency, profit requires an infinite cycle of growth that must collapse at some point.

Re: Bitcoin is a Ponzi

#282

Post by earnesti »

lalaland1125 wrote: post #249
glenvdb wrote: post #51

A lot of the "Common Objections" relate to the REASONS people choose to own Bitcoin and how those cases make it a Ponzi. There are many different reasons to own Bitcoin, however the author seems to only view it through the lens of someone living in a wealthy and developed country with financial stability. The properties of it being difficult/impossible to confiscate and its privacy make it valuable in oppressive regi…

The fees for Bitcoin are way too high to make sense for citizens in poor authoritarian counties. The average transaction fee during slow periods is about $5 and it jumps to $20 whenever there is load on the network. And the lightning network is a poor solution to this because the LN requires a lot of capital to fund channels, something poor people explicitly don't have. Finally, the fact that Bitcoin proponents have…

Custodial wallets are also one solution to that. I'm not saying that BTC fee problem isnt real, but there also are ways around it.

Re: Bitcoin is a Ponzi

#283

Post by adolph »

sb057 wrote: post #226
chowchowchow wrote: post #184

Earlier quoted context omitted.

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

Roughly 50% of gold's demand comes from private investors and central banks, with another 40% of demand being driven by (para-investment) jewelry. https://www.gold.org/goldhub/data/gold-supply-and-demand-sta...

Reminds me of US $100 bills:

As of June 30, 2012, the $100 bill comprised 77% of all US currency in circulation. Federal Reserve data from 2017 showed that the number of $100 bills exceeded the number of $1 bills. However, a 2018 research paper by the Federal Reserve Bank of Chicago estimated that 80 percent of $100 bills were in other countries. Possible reasons included economic instability that affected other currencies, and use of the bills for criminal activities.

https://en.wikipedia.org/wiki/United_States_one-hundred-doll...

Re: Bitcoin is a Ponzi

#284

Post by ButtSpark69 »

jtbayly wrote: post #193
Zamicol wrote: post #140

Earlier quoted context omitted.

This year Ethereum has so far settled over $6 trillion in value on chain. And the system has revenues. Ethereum did around $35 million daily in fees this last week. Uniswap did around $3 million. https://cryptofees.info/ No doubt there's something to it.

That’s like saying that because people are actually selling shovels and pickaxes there is something to the gold rush.

yeah, it's a reasonable probabilistic inference, not a guarantee

Re: Bitcoin is a Ponzi

#285

Post by phreack »

cemerick wrote: post #268
rabuse wrote: post #192

Earlier quoted context omitted.

Venezuela

Perfect example, thank you. Given the typical wage in Venezuela of late, someone looking to exfiltrate their "wealth" there would be looking at working weeks if not months to afford a single typical BTC transaction fee. Again, these proposed use cases are absolute fantasies.

One way people have of affording these fees is by working for people outside the country who can pay a salary that would cover the fees alongside being a living wage. After building enough wealth in crypto, they can choose to leave the regime in better terms than as a refugee. This has happened many many times already, this is the most valuable use case for crypto in practice.

Re: Bitcoin is a Ponzi

#286

Post by rmetzler »

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.

I think bitcoin is a ponzi scheme, but the article (and so far I haven't seen it mentioned in the discussion) doesn't mention the following reasons which capture value in bitcoin:

As long as you don't steal the electricity you need to pay for it in fiat. And you not only need electricity to mine new coins, but also for transactions

Ransomware creates demand in bitcoin and this demand keeps the value up.

Re: Bitcoin is a Ponzi

#289

Post by G3rn0ti »

In a Ponzi scheme, a fraudulent perpetrator takes your money (and the money of many others), gives some of that to early dropouts but takes the rest for himself. Ponzi schemers profit from lying to you where your money goes.

With a decentralized digital asset there is no sole person or company that profits from just lying to you about where your Dollar goes in exchange for digitals. Sure, miners and exchanges make profits based on fees when Bitcoin is created or sold, respectively — but they are only being rewarded for their legitimate efforts required to maintain and sell a digital currency. They do not pretend making your money work for you by some magical scheme.

This whole confusion stems from a rather vague understanding of what the subjective theory of value means: Goods and services provided by humans have no intrinsic value but become precious simply there being demand by other humans. Gold can become worthless if nobody wants or needs it anymore. A stupid trading card may cost thousands of dollars costing pennies to make but is sought after by enough collectors. Edit: Yes, Bitcoins are just numbers stored in a computer memory around the world but so is software. And software ain’t cheap.

While Bitcoin‘s value might be grossly overestimated due to rampant speculation but even then, these speculators are no victims in an investment fraud but they truly believe that Bitcoin will become much more useful in the future. They may be wrong but, currently, nobody knows. Only the future will show.

Edit: Typos.

Re: Bitcoin is a Ponzi

#290

Post by phreack »

newswasboring wrote: post #266
lalaland1125 wrote: post #249

Earlier quoted context omitted.

The fees for Bitcoin are way too high to make sense for citizens in poor authoritarian counties. The average transaction fee during slow periods is about $5 and it jumps to $20 whenever there is load on the network. And the lightning network is a poor solution to this because the LN requires a lot of capital to fund channels, something poor people explicitly don't have. Finally, the fact that Bitcoin proponents have…

> The average transaction fee during slow periods is about $5 and it jumps to $20 whenever there is load on the network. When people say this, do they mean $5/$20 per bitcoin or per any transaction whatever size?

The second one.
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