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Bitcoin may or may not intentionally be a Ponzi scheme.

But that doesn't matter, because functionally, there is no difference between an intentional Ponzi scheme and Bitcoin.

Bitcoin trading is a negative-sum game. All winning that anyone gets comes out of the pockets of newer investors. There is no net inflow of value or money that could cover the gains people make trading, other than the money being put in by other people. There is a net outflow of money, in the form of trading and mining fees, but there is no inflow.

So functionally, with Bitcoin, old entrants are paid off with the money invested by newer entrants. This is exactly how a Ponzi scheme works.

Again, it may not be intentional, but it works the same nonetheless.

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That's still not a Ponzi scheme unless you are also lying to investors by telling them that the returns are coming from some kind of business venture or something. Investors willingly speculating on commodities because they think they will rise isn't a Ponzi scheme.

The lie is that your bitcoins are worth, today, 62000 USD each.

Again, this is not an organised Ponzi scheme, but it is functionality identical anyway.

That isn't a lie, I think you are just misunderstanding what you are looking at.

When Coinbase (or whoever) shows a bitcoin price of 62000, what they are saying is that in their order book they have customers waiting to buy and sell bitcoins at that price right now. It is not just a made up number, it is actually the place where the demand between buyers and sellers is being met right now.

If you think that price is too high, then sell some for cheaper and you will take some of the high-price buyers off the market, therefore lowering the actual fair price of bitcoin.

> this is not an organised Ponzi scheme, but it is functionality identical anyway.

Functionally, a Ponzi scheme requires that investors are being deceived about the origins of their returns. What you are describing just isn't anything like a Ponzi scheme at all and it is a misunderstanding of what they are.

The possible ponzi is people claiming Bitcoin will replace the existing financial system due to its intrinsic superior qualities and will go to $1 million and beyond. The HODLers don’t believe they are merely speculating.

Of course that could be true, and people saying it may well believe it. Ponzi believed his international reply coupon scheme would actually pay out. So to some extent it will only be proveable in hindsight.

That's not a Ponzi scheme. Misleading investors about the potential of a technology isn't a Ponzi scheme. You have to mislead them about the origin of the returns they are getting.

If the technology in fact has no such potential I fail to see the distinction.

Particularly when the actual mechanism of raising value for early investors is convincing more to come in based on that narrative, but old investors can only cash out from new ones.

The distinction is that any investor can form their own opinion about the technology equally well. We don't, and can't dictate to investors what technologies they ought to consider worth investing in.

The mechanism you are describing is the mechanism by which every speculative investment works. That's not what identifies a Ponzi scheme. In fact it specifically can't be a Ponzi scheme if the old investors are aware that the returns are coming from new investors.

> The mechanism you are describing is the mechanism by which every speculative investment works.

That’s not true. Most speculative investment promise revenues if they succeed.

For your last sentence, why would that be true? In the case of bitcoin, the early investors have been led to believe that later investors will need to invest. But this can easily be false.

> That’s not true. Most speculative investment promise revenues if they succeed.

That wouldn't be speculative then (at least not completely)

> For your last sentence, why would that be true?

Because it's not a Ponzi scheme unless you are lying about the origin of the returns which you are giving to investors.

> That wouldn't be speculative then (at least not completely)

Can you give an example of non crypto speculative investments which are not expected to produce revenues? That’s how 100% of business promise to eventually provide returns.

Even real estate is rents. Collectibles such as sports cards and art are the one exception category I can think of.

> Because it's not a Ponzi scheme unless you are lying about the origin of the returns which you are giving to investors.

Yes that was my point. Bitcoin could be a distributed Ponzi, where people make representations about bitcoin’s eventual value through network value, but it turns out there is nothing to it. There’s no single agent telling a lie but it has the same effect.

To make the limit argument: if bitcoin was run by a single person selling coins and claiming their value would go up because of network value, but this claim was not true, this would be a ponzi correct? Assuming the proferred proof was reported coin value appreciation to date. (I.e. the returns)

> where people make representations about bitcoin’s eventual value through network value, but it turns out there is nothing to it.

That's not a Ponzi scheme, that's a market bubble.

There's nothing gained by misappropriating existing jargon just to try and lend more credence to an assertion that a thing is bad.

Imagine if someone were trying to argue that a MacBook's motherboard is just one big integrated circuit because it's a circuit (natch), and solder has been used to integrate it all together. On the one hand, sure I can why someone who isn't a computer techie might see it that way. On the other hand, that's simply not what that term means.

> Can you give an example of non crypto speculative investments which are not expected to produce revenues?

How about any commodity or foreign currency? Gold, oil, etc.

> That’s how 100% of business promise to eventually provide returns.

Exactly. Since Bitcoin obviously isn't a business, it couldn't be a Ponzi scheme (because investors in Bitcoin aren't being mislead into believing that the returns are coming from a business activity).

> To make the limit argument: if bitcoin was run by a single person selling coins and claiming their value would go up because of network value, but this claim was not true, this would be a ponzi correct? Assuming the proferred proof was reported coin value appreciation to date. (I.e. the returns)

No, that couldn't be a Ponzi scheme because the person isn't lying about the origin of the returns. They really do come from other investors. That might be considered a pyramid scheme, though.

Bitcoin is as much or as little a ponzi scheme as things like the US dollar.

Absolute nonsense.

If we look strictly at present mechanisms (ignoring the fact that the definition of the dollar could be changed as it has several times in the past), the dollar is much closer to a Ponzi scheme than Bitcoin is.

Again: Absolute nonsense.

You keep saying that but increasingly more and more people are wisening up to what the central bankers have pulled off and you calling it nonsense won’t change the mathematics

Bitcoin is in some ways preferable, since you’re not subjected to violence if you choose not to participate in it.

I think you've made a distinction without a difference. Bitcoin assets, and income that is denominated in Bitcoin, is every bit as taxable under US law.

It's true that attempting to conduct your entire financial life in Bitcoin won't save you from receiving tax bills that are denominated in dollars. I think your more immediate problem, though, would be that it's probably impossible for someone living in the US to participate in Bitcoin without owing someone a bill that they will expect to be paid in USD. It's difficult to transact Bitcoin without Internet access, for example. And that'll get you long before the IRS sends police to knock on your door.

This is a comment someone who doesn't understand how Bitcoin fundamentally works would write. Just because people like to call it a cryptocurrency it does not have much in common with the US Dollar.

Gold works the same way: the mining of new gold creates a downward pressure on the value of existing gold. Dilution is not the same thing as fraud.

USD also has some similar effects at play. But inflation is also not fraud.

Whataboutism.

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