Bitcoin is a Ponzi • Hacker News Board

Re: Bitcoin is a Ponzi

#421

Post by ulrikrasmussen » Thu, Oct 07, 2021, 5:46 AM UTC

MelonTree wrote: post #161

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…

I got involved in bitcoin after being blackballed from the (US) financial world while for 2-3 months while I was "investigated" in the most dystopianly opaque way possible. One day I lost the ability to transact. A few months later I got it back. Had it not been for good friends who could cover my expenses, I could have easily ended up homeless. And the most shocking part of it all, was that I was merely collateral d…

To begin with, let me say I'm very sorry this happened to you, and I think it sounds like an example of a really broken system. This should never happen to someone randomly, and I think you should have been compensated a lot for the troubles and stress it must have caused you.

However, I think we should be careful with drawing the conclusion that technology for circumventing our institutions' ability to regulate altogether is the natural solution, when perhaps fixing the institutions would lead to an overall better outcome. If we all moved to Bitcoin, then we would no longer have central democratic control over who is allowed to transact or not, and I don't think that leads to a better society.

Re: Bitcoin is a Ponzi

#422

Post by skinnyasianboi » Thu, Oct 07, 2021, 5:47 AM UTC

luka-birsa wrote: post #310

Why are such articles constantly popping up on HN? It's clear that the HN crowd does not like Bitcoin. So why keep reiterating similar arguments all over? There is zero utility in the article shared. It states some anti crypto views and that's it. Even the author concedes that this is according to his own definition and not based on real life legal tests (which have of course shown that Bitcoin is not a ponzi). Just…

A few years ago I was upvoting such articles myself, probably out of annoyance that I had known about Bitcoin since 2010 but had no financial interest in it. What got me into it was the open source aspect.

I expect that many users on HN have known about Bitcoins since the beginning and are upset that they didn't look into it years ago. Many will find their niche in it(smart contracts, NFTs..), younger people more so.

Stateless P2P open source currency is an incredibly powerful combination of words.

Re: Bitcoin is a Ponzi

#423

Post by graeme » Thu, Oct 07, 2021, 5:47 AM UTC

theurbandragon wrote: post #408

If we go by this logic some could claim that the "Dollar" is a Ponzi scheme 1. People invest thier time/effort for "Dollars" 2. When someone "buys" something they are effectively cashing out the worth of the "Dollar" through trade (someone else's time/effort) 3. "Dollars" do not nessarily create more labor (time/effort) 4. "Dollars" are just effectively pieces of paper or digital bits if people stop actually working.…

No one view a dollar as a speculative investment asset they expect to rise in value though. That’s the whole point of a ponzi scheme, and also why most people buy bitcoin: they expect it to go up.

You can reliably expect a dollar to decrease in value, by contrast. People may hold it as a hedge but no one expects a dollar to 10x.

You have hit on something useful: dollars are just a claim on the real economy, but if the economy stops dollars are worthless. But this isn’t the same as the dollar (or any type of savings) being a ponzi

Re: Bitcoin is a Ponzi

#424

Post by jspaetzel » Thu, Oct 07, 2021, 5:48 AM UTC

wpietri wrote: post #292

hanniabu wrote: post #181

Earlier quoted context omitted.

OP mispoke and meant the supply is finite.

It's not finite. The supply of cryptocurrencies is effectively infinite. There's almost no barrier to entry. In the closest historical equivalent, the wildcat banking era, at least you had to have state-chartered bank. [1] But what's it take to launch a cryptocurrency these days? Is it anything beyond a tech guy, a marketing guy, and a a credit card with a little room? [1] https://en.wikipedia.org/wiki/Wildcat_bankin…

You don't really need a room to do it...

Re: Bitcoin is a Ponzi

#425

Post by glenvdb » Thu, Oct 07, 2021, 5:49 AM UTC

scottyp21 wrote: post #326

> Nevertheless, investing in gold at the current price seems unwise, since its price is many times its "natural" price as commodity and so it is more likely to go down than up. This is a misconception and a fundamental misunderstanding of gold's primary utility for thousands of years. While it is true that gold's price reflects a significant premium beyond the "natural" market price, this has been the case for millen…

Some people will never change their minds. They've made their choice and changing their mind would be more painful than not.

Bitcoin could be the world reserve currency and the same people would still say it's a scam.

Ultimately, who cares? The world is changing with or without them.

Re: Bitcoin is a Ponzi

#426

Post by [deleted] » Thu, Oct 07, 2021, 5:49 AM UTC

bb88 wrote: post #319

tyrfing wrote: post #269

Bitcoin is a store of value. Why is it a store of value? Because people believe it is, much like gold. You can gesture vaguely at the minor utility that gold has, the ability to be made into things of commercial value, but that's a fig leaf as much as it is to point to Bitcoin's potential use for payments. Hashrate and mining investment is a reflection of that belief. Don't take this as advice to buy Bitcoin at 50k.…

People tend to "invest" in bitcoin. I don't "invest" in a bank account.

[deleted]

Re: Bitcoin is a Ponzi

#427

Post by ls15 » Thu, Oct 07, 2021, 5:50 AM UTC

everfree wrote: post #131

amin wrote: post #107

Earlier quoted context omitted.

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.

> This is not the case with gold. Silver, platinum, palladium, rhodium, copper... Just as people have generally centered around gold, people have so far generally centered on Bitcoin. There's a great deal of other metals and a great deal of other cryptocurrencies, but if nobody really cares about them, then they are not relevant to the conversation.

> palladium, rhodium

Sidenote: Both of them have surpassed gold in terms of pricing for a while recently. Not every cryptocurrency is valuable, but some can be if they can fill a gap like palladium and rhodium, that were mostly useless metals 100 years ago.

Re: Bitcoin is a Ponzi

#428

Post by joe_the_user » Thu, Oct 07, 2021, 5:50 AM UTC

scottyp21 wrote: post #326

> Nevertheless, investing in gold at the current price seems unwise, since its price is many times its "natural" price as commodity and so it is more likely to go down than up. This is a misconception and a fundamental misunderstanding of gold's primary utility for thousands of years. While it is true that gold's price reflects a significant premium beyond the "natural" market price, this has been the case for millen…

I'm curious for those that still truly believe Bitcoin is a ponzi scheme or a bubble - at what price point and time would you start to consider that you may be tragically wrong?

What price would tulips have had to have attained for them to be proved "not a mania"? [1] "At the peak of tulip mania, in February 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled artisan."

Which is to say a high price by itself is not a proof of bitcoin not being bubble. I do have a criteria - bitcoin will not be a ponzi scheme if it genuinely winds up being used as currency. Of course, this wouldn't solve its other noxious problems.

[1] https://en.wikipedia.org/wiki/Tulip_mania

Re: Bitcoin is a Ponzi

#429

Post by arcticbull » Thu, Oct 07, 2021, 5:51 AM UTC

qez wrote: post #403

arcticbull wrote: post #346

Earlier quoted context omitted.

The article literally covers each of those cases and explains exactly why those are not Ponzi schemes while Bitcoin is ([edit] under "Common Objections" - which should really read "Common Whataboutisms"). > 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 (not investors); and these profi…

As per gold: I agree with that common objection. If bitcoin is a ponzi, so is gold. > 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. First, this does not negate the comparison. Bitcoin could also be like that, and therefore not a ponzi. Second, I know a long of gold inve…

Yeah, I think you have a point regarding gold. I think the same way the author treats Bitcoin in regards to the way 'most people are using it' when defending its categorization should apply to gold as well.

Once we accept that the price is defined by speculators, the industrial and decorative applications of gold set a floor price rather than necessarily redefining the category.

There are a few key differences.

(1) Gold is zero-sum. Once out of the earth, it simply continues to exist. It produces nothing, consumes nothing, reacts with nothing, and doesn't really get lost or destroyed.

(2) On the other hand, if Bitcoin miners are turned off, 100% of the value evaporates instantly.

(3) Bitcoin therefore is negative-sum because miners require a steady influx of new capital in order to purchase coal to burn to 'secure' the network. This new capital is raised in the form of block rewards which are sold, exerting negative price pressure in the amount of ~$60M USD per day. If new capital stops coming in, Bitcoin bleeds value slowly, and then drops to zero all of a sudden.

The difference between a zero-sum vehicle and a negative-sum vehicle is enormous at the limit.

> People like to own gold jewelry for the same reason people like to own bitcoin.

I do disagree with this however, most people buy gold because it's shiny and a status symbol. They want others to see it. People buy bitcoin because number go up.

Re: Bitcoin is a Ponzi

#430

Post by arthurcolle » Thu, Oct 07, 2021, 5:51 AM UTC

wpietri wrote: post #82

arthurcolle wrote: post #50

Earlier quoted context omitted.

Blame financial news media, things like Fortune magazine's list of new crypto billionaires. The author of this blog post's claim that 99.99% of people in crypto are only participating because of expectations of future profit is unsourced and a fiction that he has created based on preconceived notions. Don't participate if you don't want - I like participating in a system that isn't being tracked by agencies especiall…

I'd bet that cryptocurrencies are much more vigorously tracked than US dollars. The fraction of cryptocurrency transactions related to scams, fraud, money laundering, tax evasion, and other financial crime must be at least a couple orders of magnitude higher than that for real money.

This gets to the heart of the issue with these discussions - people like yourself asserting non-factual statements based on the equally (if not more so) incorrect assertions they hear from others. Where are your sources? Why do you feel like you need to state things as fact when you just don't like something?

You are exactly incorrect.

Cash represents the overwhelming supermajority of laundered funds and ongoing credit extended across criminal elements.

https://www.swift.com/sites/default/files/files/swift_bae_re...

Cash is the heart of the criminal economy, crypto is creating a transparency that doesn't exist in traditional peer to peer physical transaction systems like cash or IOUs.

I'm done with this, nothing productive is coming out of this conversation.