Ask HN: Is a Ponzi scheme ethical if everyone knows it’s a Ponzi?

If it's transparent, it's not a Ponzi scheme. In Ponzi schemes, like any other scam, there must be deception.

This is gambling, pure and simple. Is it honest to play in the Lottery? You know that if you win, you'll profit at the expense of others.

Personally, I don't see how this is dishonest (and therefore immoral) in any way.

It becomes unethical when someone who doesn't know about Ponzi schemes are gets involved. If someone has to tick a box saying that they read the wikipedia (for example) page on Ponzi schemes, they assume responsibility for any loss... assuming that they own the resources being staked, and that they are of sound mind.

It's the kind of thing that will attract smug dicks as early investors, though, and you'll get some desperate people at the bottom of the pyramid.

If everyone understands the terms, then it is gambling, not a Ponzi, so I think it depends whether you consider gambling unethical. I don't, so gamble away!

As http://urbanlegends.about.com/od/internet/f/chain_letter.htm points out, there are laws against chain letters soliciting money. Which, in some sense, is exactly the "business model" that you're describing.

It may be illegal in many jurisdictions (not sure since nobody's playing for legal tender).

But regardless of legality, is it moral or ethical?

If all players know that the schmucks at the bottom of the pyramid lose their money to enrich those at the top, is that OK?

Or is there something fundamentally wrong about a 'business' that produces no new value and systematically transfers and concentrates existing value from the bottom to the top?

It's not very ethical.

The line between moral and not moral is fuzzy, and this is definitely somewhere in the fuzzy zone, not in the clear white zone.

In a vacuum, sure. But most governments would consider it something like gambling and stop it.

Ethically, as long as all the participants know the rules of the game, there's no trouble. Some people like games where there's an element of total catastrophe.

If bitcoin freaks you out, I suggest reading up on the history of fiat money, and the federal reserve.

This isn't about bitcoin per se.

> I’m convinced that the virtual currency itself is legitimate,

> but some of the biggest bitcoin 'businesses' are gambling

> and Ponzi/pyramid schemes.

It's about the legitimacy of 'honest and transparent' Ponzi/pyramid models.

If you strip out the deceit that usually accompanies these things, are they OK?

Or is there something fundamentally unethical or anti-social about this model?

Isn't this illegal?