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Comment by bhouston | Hacker News Reader

Bitcoin is a ponzi in the classic sense though. There is no underlying value and the price only goes up if more people buy in. A lot of people see the parallels: https://www.cnbc.com/2021/04/23/bitcoin-a-gimmick-and-resemb...

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"Gold is a ponzi scheme in the classic sense though. There is no underlying value[1] and the price only goes up if more people buy in."

[1] it's literally a shiny yellow rock. You can argue that there's some intrinsic value for use in jewelry or electronics, but given the demand breakdown (https://www.statista.com/statistics/299609/gold-demand-by-in...) and the current price, anyone buying right now is going to experience massive losses should a collapse happen

except gold has been valuable for thousands of years and retains value without electricity and internet, none of which are true for BTC.

In other words, gold is a more proven/resilient ponzi scheme

Gold has plenty of use besides speculation - jewelry, decoration, electronics, healthcare.

Covered in the GP comment.

>[1] it's literally a shiny yellow rock. You can argue that there's some intrinsic value for use in jewelry or electronics, but given the demand breakdown (https://www.statista.com/statistics/299609/gold-demand-by-in...) and the current price, anyone buying right now is going to experience massive losses should a collapse happen

I know that only about half of the demand for new gold is for investment, but this means gold is in much better position than Bitcoin. Bitcoin can go to zero because it has no intrinsic value, unlike gold.

No, ponzi means that proceeds from later investments pay returns to earlier investors, this is not what is happening with Bitcoin. It might be what's happening to tether (in a sense that they pay withdrawals out of recent deposits and rely on having more deposits that withdrawals). Bitcoin might be a bubble like tulips, but it's certainly not a ponzi scheme in any "classic sense."

Well, everything in the economy is a ponzi scheme in a loose sense of the word. The real question is whether it provides a value that allows its price to be set on a market. A classic ponzi scheme has no value beyond its commitment to yield a return. There are several arguments for why crypto might have a priceable value, and one has to decide if they're persuasive. I think the comparison to gold isn't actually that bad for a coin with a predicable increase in supply, like doge.

More people -> Higher Market Cap. -> ??? -> Profit.

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