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Comment by TheAnimus | Hacker News Reader

I think the biggest fault with bitcoin is the name, coin.

People like coins and cash to be liquid, stable, and ultimately not a ponzi scheme (by this I mean growing by an ever slowing amount, that gives added value to those who mined early and held, punishing any sizeable withdrawal, dividends paid only due to more outside money coming to the fund..).

Too many people have taken to investing in it with the attitude that it always rises, yet in a classic characteristic of a bubble backed entity it doesn't take much to crash the value of the asset.

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>ultimately not a ponzi scheme

A ponzi scheme has a specific definition. By your modified definition certain commodities, such a gold and oil, are ponzi schemes because they become scarcer as time goes on.

>it doesn't take much to crash the value of the asset.

Looking over the past few days, the price is 8% or so below what it was. Not much of a crash. Predictably, as the market for Bitcoin has grown it has become less volatile.

We can split hairs on definitions as long as you like. The trading desk I used to work at, we used to even have the phrase ponzi asset. It is quite common for firms in trouble to pay large dividends, to improve the stock rating, so they can raise more money. I worked on an equity derivs desk and have been corrupted by their terminology and no doubt thinking. I hope I made clear what I consider to be the issues, that lead me to want to use a negative word.

>as the market for Bitcoin has grown it has become less volatile.

I do not agree, the vomma does not show this characteristic trending in a reliable fashion.

> and ultimately not a ponzi scheme (by this I mean growing by an ever slowing amount, that gives added value to those who mined early and held, punishing any sizeable withdrawal, dividends paid only due to more outside money coming to the fund..

Yea well that's not what a ponzi scheme is so you need to adjust your meaning and use the correct words. Here, let me help you out...

Ponzi Scheme: a form of FRAUD in which belief in the success of a NON-EXISTENT ENTERPRISE is fostered by the payment of quick returns to the first investors from money invested by later investors.

Nothing about Bitcoin is or resembles a Ponzi scheme; stop spreading FUD.

This is no different than gold coins.

And it doesn't matter what "people are used to", they will still see value in it eventually, just like they did for thousands of years before the central banks took over and started messing everything up, including our education. No wonder nobody understands that just a few centuries ago, private money was already a thing.

Not everyone has such glowing memories of private money: http://en.wikipedia.org/wiki/Company_scrip

Private money is obviously not the problem in those cases.

It's like saying "Not everyone has such glowing memories of gold", and you link an article that talks about inhumane working conditions in gold mines.

Yeah...well...now that you mention it, that is a major downside of having gold play a crucial role in the world economy.

So what, specifically, will prevent whatever you think happened re central banks from happening again in this case?

Read the Bitcoin FAQ to learn a bit of what it is and how it works and why it can't be stopped. From your username I deduce that you haven't done so yet.

Also, it's not what "I think happened", just history. That snarky tone was unnecessary from your part, especially when you don't understand the topic.

Heh, I understand a bit more about BTC than you think...

And you didn't answer my question, perhaps because you do not understand what happened that resulted in the previous shift from a currency base of fundamentally finite supply to fiat currency. I suggest you read up on it.

That is not a Ponzi scheme, that is called increasing scarcity.

Bitcoins are not much different than gold. People hoard them like an asset, but because there is nobody at the controls for liquidity (and the impending scarcity) it's not taken seriously as a currency.

Another thing that tends to confuse people about bitcoin as well is that there are 100,000,000 satoshis per bitcoin. This hasn't really been communicated by the press. Every person who doesn't follow bitcoin closely or understand the underlying technology is always surprised by this.

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