why btc is not a ponzi or tulips

Cuddles · Dec 19, 2017

Pekelo said:
[Note to myself: not going to get dragged into this.]

Instead of debating, I offer a peaceful solution to the ponzi debate:

Let's call mining based cryptos like Bitcoin smart ponzis, where the definition is this:

Smart ponzi: a pyramid-like system where the value of the "product" isn't derived from its features, usefulness or widespread usage, but clearly just based on expectations of future price increase. A smart ponzi needs constant new incoming money flow to keep its price at least on the same level, because miners constantly selling new coins. Once this need can not be met, price will inevitably fall.

So are you guys happy if I call Bitcoin a smart ponzi?
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I buy that, with the caveat that you can keep patching crappy software functioning for a long time.

Pekelo · Dec 19, 2017

jubalix said:
Ponzi schemes are limited by incoming supply,
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So is Bitcoin. Somebody has to cough up that 15-18 million bucks PER DAY to keep up the price...

Alexpung · Dec 19, 2017

Whatever coin you name is just like penny stock pump and dump and you can say it is not really ponzi.

- The penny stock deliver as promised: A share of said company.
- Market manipulated to keep up with the price.
- Shareholder have incentive to hype said stock.
- Rely on new money for old money to profit, no earning so increase in price is not self sustained.

S2007S · Dec 20, 2017

Pekelo said:
[Note to myself: not going to get dragged into this.]

Instead of debating, I offer a peaceful solution to the ponzi debate:

Let's call mining based cryptos like Bitcoin smart ponzis, where the definition is this:

Smart ponzi: a pyramid-like system where the value of the "product" isn't derived from its features, usefulness or widespread usage, but clearly just based on expectations of future price increase. A smart ponzi needs constant new incoming money flow to keep its price at least on the same level, because miners constantly selling new coins. Once this need can not be met, price will inevitably fall.

So are you guys happy if I call Bitcoin a smart ponzi?
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Haaaaaaaa
They are thrilled...

cole_ · Dec 20, 2017

jubalix said:
ok its time to put these to bed.

In a ponzi scheme you hope to receive more money from the next person(s) incoming, and so this plays with the velocity of money. When new entrant sources fail, then the scheme fails

With btc, what is gives in exchange for fiat, or other goods/services/cryptos is a promise to be able to access block space,
[1] without counterparty risk, and
[2] No person or gov can stop you accessing or updating the blockspace. (the btc blockchain)

more correctly btc is necessary but not sufficient, you need enough btc to pay the fee to a miner, and a remainder, to access and update blockspace

That promise is unable to be taken away by any other entity.

Only you with your private keys can make the decision when you wish to access block space and change the ledger.

Now some people may chose to think through the lens of a ponzi scheme because

[1] they hope to get more fiat in the future for the same number of btc, but that's not what BTC is.
[2] Its easy for people to address something novel this way.

If you do get more fiat that's a function of btc being a better system, immune to quantitative easing, policy changes, corporate welfare, bad laws and economically failed jurisdictions.

BTC is a protocol and make no promises in an for about returning greater fiat profit or any profit to anyone.

Along the same reasoning, tulips did not give you access to blockspace. You simply had a tulip.

Now for both you may argue but tulips and pozi gave you access to "tulip space" and "ponzi space" to update the ledger in the respective schemes.

Lets deal with that.

Any record in either of those space still existed on centralized ledgers, where you relied on others to act as intermediaries and fulfill promises. This is a fundamental difference. Block space is decentralized. You update the ledger without any intermediary. Your actions cannot be countermanded or erased.

While this alone is sufficient to rebut and assertions of "tulips" or "ponzi scheme", we can make a sort of restatement of these in ways that may be more understandable

You could not transfer to any actor anywhere in the world in either ponzi schemes or tulips with zero counter-party risk and irrespective of capital controls or other risks. The records of you position in the ponzi system was not guaranteed to last or be fulfilled, rather the longer it goes on the more it tends to zero. Tulips well they are very very perishable and you cant exactly send them through the internet.

So the upshot of BTC, is its about unfettered and inalienable rights to access block space, a decentralized ledger with zero counterparty risk in a know supply system.

The features were not and have not been found in any ponzi or tulip scheme. Nor shall they.

What is btc?

It is something sui generous,

it may have features or people may describe it as a currency, commodity or any other number of say more traditional species of security, and these descriptors may all be true, or in combination true.

However is I post a supra set of these things and novel and that makes it hard describe in pre existing language.

Sort of like trying to describe email to some one in 1985, and then trying to explain how email was not the internet but it was part of the internet.

So while people might be able to wrap thief heads around the mail analogy aspect of email as to post mail, email is not really a good descriptor of what the internet is.

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you're just arguing semantics

the reason people compare it to the tulip mania or a ponzi scheme is because those things are/were based on buying high and hoping you can sell at a higher price to a bigger idiot.

Peter10 · Dec 20, 2017

in my own view, I think people are misunderstanding bitcoin. Bitcoin is originally created to be a means of making payment and transferring money not an investment vehicle.
buying bitcoin for investment purpose is like a ponzi schemes to me because you need new investors to buy and push up the price before you can make a profit. if nobody is willing to buy the bitcoin from you, it is totally worthless

Pekelo · Dec 20, 2017

I don't know why you had to mix in tulips with ponzis, they don't deserve it.

jubalix said:
Along the same reasoning, tulips did not give you access to blockspace. You simply had a tulip.

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Great. You killed this argument good. So a plant is not a technological improvement. Do I really have to spell it out for you? The tulip analogy is for an overpriced asset, not describing blockchain's features or abilities. If you can't even see it, well, there is nothing to say. And tulips have intrinsic value too.

The ponzi analogy is sure debatable, but the tulip one isn't. There is nothing unique or rare about bitcoin, so there is absolute no reason for an overpriced evaluation. Blockchain technology also can be used without mining, Ripple, Cardano, so again, generating new coins isn't necessary.

Instead of crying about analogies, why don't we discuss the technical failures of your fav crypto?

ElCubano · Dec 20, 2017

Peter10 said:
in my own view, I think people are misunderstanding bitcoin. Bitcoin is originally created to be a means of making payment and transferring money not an investment vehicle.
buying bitcoin for investment purpose is like a ponzi schemes to me because you need new investors to buy and push up the price before you can make a profit. if nobody is willing to buy the bitcoin from you, it is totally worthless
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Many things on this planet would not appreciate unless someone else pays more for something someone else paid less for. Semantics cuts both ways..

oopsies · Dec 20, 2017

Money Trust said:
Referring to Bitcoin as a ponzi scheme is a talking point made by people who wanna sound like they know what they're talking about, but they really don't. I've compared bitcoin to Tulipomania and even to John Law but my comparison has nothing to do with the asset(s) themselves. My comparison has more to do with the emotions involved in any speculative mania. We've reached a point in bitcoin where the rise is being driven by greed. This is evidenced by the fact that many people who have never speculated in their life are now buying bitcoin. I even read a story where people are taking our mortgages in order to speculate on bitcoin. So, yeah, it's definitely emotional now.
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This. I believe crypto has a great future and can one day be an alternative or even replace fiat money. But right now, the way to make money in it is just... scary.