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Comment by hanswesterbeek | Hacker News Reader

Hilarious. Can't wait to hear from the choir of libertarian crypto-currency-zealots, who will sing the praises of the Ponzi scheme that is Bitcoin.

On a serious note: who benefits?

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Unfortunately I get the feeling more and more everyday that this really is just a ponzi scheme built on really cool new technology. I mean honestly most people who buy bitcoin aren't looking to spend it or use it because of convenience, they are looking to hold it in the hopes that the price continues to go up and on the way encouraging everyone they know to buy in to drive up the price.

> I mean honestly most people who buy bitcoin aren't looking to spend it or use it because of convenience, they are looking to hold it in the hopes that the price continues to go up and on the way encouraging everyone they know to buy in to drive up the price.

Even if that's true, that doesn't make it a Ponzi scheme. A Ponzi scheme is an investment in a phony entity run by a fraudster (the Ponzi) who's promising guaranteed returns and lying about the existence and nature of what the investment is. New money making early investors rich is not a defining feature of nor unique to Ponzi schemes.

Ponzi schemes require a Ponzi, intentional fraud, and a fake investment. Bitcoin is none of these things; it's not even remotely similar to a Ponzi scheme. No one is being lied to about what Bitcoin is, there's no fake investment here, Bitcoin is a real and functional payment network. There's no guarantee of returns here. Stop spreading FUD. Gox is not Bitcoin, Mark being a criminal doesn't make Bitcoin a Ponzi scheme.

Bitcoin is much more like a speculative bubble than a Ponzi scheme.

Correct.

Yeah, the technology fascinates me as well, it's very cool.

It's said that the real-world economics of it make no sense at all. The technology will survive though, the ideas will make their way into other pieces of software.

Economics is merely a form of social contract. For god's sake, humans have turned gigantic immovable rocks into currency: http://en.wikipedia.org/wiki/Rai_stones

BitCoin will thrive (or not) based on the community that grows around the technology. While it's equally feasible that it becomes a major world currency, or that it collapses in value and held only by a handful of "crypto-enthusiasts", I don't think it will ever go away.

I hear there is a coin launching soon that may interest you, SchadenCoin!

All of these people were in this thing for purely speculative reasons, so please forgive me my lack of empathy :)

It was all orchestrated by GPU vendors and electric utility companies...

Yes, a failure of a single financial institution proves the currency is a completely failure. I mean, it's not like the USD and EUR markets had any institutions that failed or needed bailouts - well, except for Northern Rock, IndyMac, Lehman Brothers, Merrill Lynch, Fannie Mae, Freddie Mac, Washington Mutual, Wachovia, Citigroup, and AIG.

Those failures proved that USD and EUR have a system that works the way most civilized people want it to - individual investors were covered, losses were spread out, no individuals suffered catastrophe. Whereas most of the bitcoin "community" seems to take an ideological position of "everyone for himself".