"Bitcoin is not owned by anyone. This is not a required in the...

  1. 898 Posts.
    "Bitcoin is not owned by anyone.
    This is not a required in the definition of a ponzi scheme."


    A ponzi scheme requires new investors to pay for some returns to the old investors. Bitcoin does not function this way. If a new investor buys Bitcoin, no transference occurs to older investors. Their current holdings may increase in value due to increased scarcity, but if this is your argument, then all commodities are therefore ponzi schemes as well (Gold, Silver, Oil, etc).

    "Bitcoin is not a currency because it is not accepted every where that currencies are."

    Bitcoin is a currency because it is a medium of exchange. There are businesses which can accept only Bitcoin, just like there are businesses which can only accept AUD. By your logic therefore the Australian Dollar is not a currency, as it is not accepted where other currencies are. AUD might not be accepted in the USA and therefore may not be considered a currency in this context, however, overall it is a currency.

    "As the price rises higher and higher the early adopters have more and more incentive to exit"

    If the price rises and rises then the consumer investment base is much larger than what it originally was. Some early investors then selling are signs of a healthy market and will contribute to liquidity.

    "But one day, there simply won't be enough later investors to come in"

    Bitcoin has been around for 8 years. What year do you think this will happen? People will be born and die from old age as well. New investors are always possible.

    "or because there aren't any more out there in the world with sufficient wealth to invest in it"

    It amazes me how many people don't comprehend the basic concept of supply / demand. If Bitcoin was as successful as you state, this would increase their value. It is divisible down to 8 decimal places (Possibly more with future code changes if accepted by the democratic majority of nodes), therefore this process could go on almost forever.

    "This is different from a stock, because a stock has intrinsic value to due earnings, profit, cash-on-hand, talent of management, talent of employees, contracts, etc.."

    'Intrinsic value' is one of most backwards medieval terms used in economics. ALL value is psychological. For example, I can believe my house that I live in is worth nothing and burn it down. Or I could find a pebble on the road and believe it to be priceless.

    "It is apparent from #4 that all the destructive effects of a ponzi scheme doesn't require a centralized con man, neither do the definitions I quoted in the OP"

    However, a ponzi scheme requires new investors to pay returns to old investors. Since Bitcoin does not function like this, it destroys the basis of your argument.

    "Indeed they do end up in jail. And Bitcoiners who cash out will also in my opinion end up in jail"

    Going to gaol usually requires some sort of illegal activity. What illegal activity do you think they conducted?

    "Bitcoin exchanges lie about your balance."

    If that were true, they would be shut down by the Department of Fair Trading. I have bought Bitcoin twice (2013 Mt Gox, 2014 BTA), in both cases I received the amount I paid for. I know others which have sold and received the amount they expected. If you use your own wallet, then an exchange cannot lie about your balance because you own it. If you're stupid to think leaving your Bitcoins on a centralised exchange is a smart idea, I would question your understanding of Bitcoin. I think most exchanges these days just send the amount you paid for directly to your specified address. At least this is what I recall last time when I bought through BTA.

    "They seem to imply that you can sell for a certain price, but the float is only about 0.1% of the market cap,"

    This is a highly illogically constructed statement. 'Float' in economics refers to money which is temporarily counted twice due to delays in a banking system. Bitcoin cannot have a float because it is an open system and would lead to double spending.

    " meaning only about 0.1% of the money in Bitcoin can get out any where near the current price. Slam dunk!"

    I don't know how you conclude this even if the previous part of your sentence was true.

    " For example in #12, there is no way to know what your balance is"

    If you use your own wallet, then you will know what your balance is.
 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.