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Comment by andy81 | Hacker News Reader

That feels overly pedantic, since bitcoin does function as a ponzi from the investors' perspective if not a textbook one.

The difference is that miners are constantly pulling dollars out of the system rather than some sinister individual constantly pulling dollars out of the system. Hopefully we'll end up with a new word for "decentralized ponzi" to differentiate them in future.

Obviously there are actual ponzis involving bitcoin (e.g. Tezos/Nexo/BlockFi/Crypto.com, possibly USDT/USDC) but those aren't bitcoin itself. Maybe that's part of the confusion.

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>That feels overly pedantic, since bitcoin does function as a ponzi from the investors' perspective if not a textbook one.

Right, but the following are all different things:

1. a guy holding a gun to your head and demanding that you withdraw cash from an ATM

2. a hacker hacking into your coinbase account and draining your funds

3. a scammer pretending to be the IRS and demanding that you to send money via western union

even though from "your perspective", they all function the same (ie. you losing money).

>Hopefully we'll end up with a new word for "decentralized ponzi" to differentiate them in future.

Yeah, it's called "speculative bubble". I suspect the reason why people don't use it is because it doesn't carry a sense of malice/criminality that "ponzi scheme" does.

The difference in nearly every other speculative bubble is people agree the underlying assets have some real value. Housing may be way overpriced, but nobody thinks it should be 0.

With crypto there are plenty of rational arguments that the underlying assets are worth absolutely nothing.

They don't function the same if you take a macro-economic view. Bitcoin does in this sense (If the value extracted by miners from the BTC ecosystem to keep it running exceeds the value created by it, then it by definition has to be a speculative bag-holding scheme.)

> Hopefully we'll end up with a new word for "decentralized ponzi" to differentiate them in future.

We don't need new word.

We already have words like "pump and dump" or "irrational asset bubble" or "high yield fraud" that accurately describe what's going on.

By understanding the kind of financial fraud that is (or many be) actually occurring and calling it out correctly, we can more effectively put a stop to them.

In fact, although there are many different kinds of crypto scams, very few are new. Most have been run many times before in a variety of different ways and have well-defined names.

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