Merged Bitcoin - Part 3

[steenkh]

well i think the difference between them and bitcoin is the way it’s coded. those things exist as an object in space. bitcoin is an automated ponzi.

in any case some of them may be ponzi schemes. like the art divided into equities you can trade, that could absolutely be a ponzi

What is your definition of a Ponzi scheme?

In my opinion it is a scheme where somebody promises big profits to investors, and actually pays these profits to investors by using the money from other investors, keeping a big slice for himself. It can only work by getting ever more investors, which means that ever more money has to be found to pay back, so it has to collapse.

There is nothing in Bitcoins, or art divided into equities that resembles a Ponzi scheme: nobody – not a person, not a company – is paying dividends to early investors by getting ever more investors to invest. There is only normal trade. People can also lose money in normal trade.

 

[dirtywick]

In my opinion it is a scheme where somebody promises big profits to investors, and actually pays these profits to investors by using the money from other investors, keeping a big slice for himself. It can only work by getting ever more investors, which means that ever more money has to be found to pay back, so it has to collapse.

i'm not sure how that doesn't describe bitcoin. without new investors, the price collapses. that's the whole problem, there's nothing productive happening with the investment. when you say the price rises with demand and no other mechanism, which is why i asked several times hoping for a different answer, that's exactly what that means.

you might say, oh well there's no central authority promising big profits to investors. and while that is perhaps true, but i think that since the concept of bitcoin changed from an alternative currency to an "investment" (and part of the problem with this discussion is this thing changes from a currency to an investment to a store of value to a hedge against inflation and back and forth when convenient), since it flopped as a currency, that's all anyone in the space has been promising and there's absolutely a handful of people with significant holdings behind that.

Strategy's Michael Saylor Says Bitcoin Will Grow at 30% Per Year for the Next 20 Years. Could He Be Right? | The Motley Fool

www.fool.com

look at a guy like michael saylor, who is using bitcoin as a ponzi scheme for a stock where he sells you shares of bitcoin and uses that profit to inflate the price of bitcoin. it's a ponzi within a ponzi. do we even have to talk about all the alt coins, which use bitcoins basic framework to create a million scams? thousands of those have collapsed since they were made, bitcoin isn't guaranteed to last forever.

hey, what happens when it's too expensive to mine and the transactions slow? do the whales all find their exit liquidity and everyone is left holding the bag? isn't that how a ponzi functions? the differences are very small imo

but in the meantime, you get a non-stop series of scams, and child molesters and terrorists get to launder their money while the greediest people on earth get a 5% fee and we waste a ton of electricity. i guess ponzis don't typically do that.

 

[psionl0]

What is your definition of a Ponzi scheme?

Bicoin runs itself as a ponzi scheme and keeps all of the profits to itself?

 

[steenkh]

i'm not sure how that doesn't describe bitcoin. without new investors, the price collapses. that's the whole problem, there's nothing productive happening with the investment

Without demand, the price goes down obviously. This is the same for everything: oil, strawberries, gold, and Bitcoin. What is the productive element in buying gold?

look at a guy like michael saylor, who is using bitcoin as a ponzi scheme for a stock where he sells you shares of bitcoin and uses that profit to inflate the price of bitcoin. it's a ponzi within a ponzi.

You still haven’t defined “Ponzi”. Of course you can run a Ponzi scheme with Bitcoins, just as you can run it with shares.

hey, what happens when it's too expensive to mine and the transactions slow? do the whales all find their exit liquidity and everyone is left holding the bag? isn't that how a ponzi functions? the differences are very small imo

No, that is not how a Ponzi functions. It is not every kind of bad investment or fraud that is a Ponzi scheme.

 

[dirtywick]

Without demand, the price goes down obviously. This is the same for everything: oil, strawberries, gold, and Bitcoin. What is the productive element in buying gold?

you have the ability to input labor into gold and produce a product more valuable than the base. you cannot do this with bitcoin. big difference always ignored in the comparison

You still haven’t defined “Ponzi”. Of course you can run a Ponzi scheme with Bitcoins, just as you can run it with shares.

bitcoin is structured the same way a ponzi is structured. the mechanics of the scam. it’s coded to do so

No, that is not how a Ponzi functions. It is not every kind of bad investment or fraud that is a Ponzi scheme.

what is the functional difference?

 

[steenkh]

you have the ability to input labor into gold and produce a product more valuable than the base. you cannot do this with bitcoin. big difference always ignored in the comparison

That is because it is irrelevant.

bitcoin is structured the same way a ponzi is structured. the mechanics of the scam. it’s coded to do so

So how is a Ponzi scheme structured?

I have described how I see a Ponzi scheme, and why Bitcoin is not a Ponzi scheme. Now you will have to define a Ponzi scheme, or we’ll get nowhere.

 

[dirtywick]

That is because it is irrelevant.

obviously i disagree so we can set that aside if that’s your only commentary on it

So how is a Ponzi scheme structured?

I have described how I see a Ponzi scheme, and why Bitcoin is not a Ponzi scheme. Now you will have to define a Ponzi scheme, or we’ll get nowhere.

i’ve described why multiple times just a few posts ago. even though you didn’t answer my question here i will for you again: the essential element of a ponzi is that new investment pays out old investment, its the only way pot gets bigger until it gets so big that new investments dry up and the thing collapses, and a few people profit and the rest are holding worthless stake in nothing

and that is exactly how bitcoin is coded to function. and so, i call it a ponzi.

you may disagree with that and that’s fine with me. don’t call it a ponzi. but i haven’t seen anything convincing why i should stop

edit

as an example, and primarily why i keep bringing it up, would be explaining there’s an alternative way for bitcoin to appreciate besides new investment. if it generates a return by some action other than being sold to someone else for more than it was purchased, i will stop calling it a ponzi

 

[psionl0]

the essential element of a ponzi is that new investment pays out old investment,

Bitcoin doesn't do that. It can't. It is inanimate.
The correct definition of a ponzi scheme is that the person running the scheme pays out early investors with money received from new investors.

If you want to keep calling bitcoin a ponzi then you need to identify who that person is.

 

[dirtywick]

well, no. it's a computer program performing a function.

 

[psionl0]

well, no. it's a computer program performing a function.

And keeping the profits to itself?

 

[dirtywick]

the people that profit when it collapses will be the ones to pull their liquidity first. it's an automated ponzi scheme.

 

[Dr.Sid]

the people that profit when it collapses will be the ones to pull their liquidity first. it's an automated ponzi scheme.

Ponzi scheme where everybody has the same chance ? I see ..

 

[psionl0]

the people that profit when it collapses will be the ones to pull their liquidity first. it's an automated ponzi scheme.

And when it doesn't collapse, it won't be a ponzi scheme (if that were the definition of "ponzi").

 

[psionl0]

Ponzi scheme where everybody has the same chance ? I see ..

Ponzi scheme where the person running it (the "computer program") doesn't make any money out of it.

 

[dirtywick]

Ponzi scheme where everybody has the same chance ? I see ..

not exactly. the whales dictate when it occurs.

regardless, if you don’t agree that the mechanics of a ponzi and the mechanics of bitcoin are the same, and why it’s bad and why it’s not an investment, there’s not much more for me to add.

 

[dirtywick]

Ponzi scheme where the person running it (the "computer program") doesn't make any money out of it.

what’s next, i need to explain what a “computer program” is lol

 

[psionl0]

what’s next, i need to explain what a “computer program” is lol

In your case, yes. You have a unique definition of words.

 

[dirtywick]

too bad you’re in your own

 

[psionl0]

too bad you’re in your own

That's ok. I never expected you to make sense anyway.

 

[steenkh]

That's ok. I never expected you to make sense anyway.

Indeed. dirtywick is calling any investment that doesn’t pay out dividends a Ponzi scheme.