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Re: Re: [FAQ] Is BitCoin a Ponzi or pyramid scheme? (Newbie-Friendly)
by
HBBZ
on 19/01/2013, 14:30:40 UTC
The profitability of hoarding bitcoins can be compared to interest rate...


No it absolutely can't! Interest rate is a tool central banks use to give the currency a value because the potential total moneysupply is infinite, and thus intrinsic future value of a USD is ±0. Now that can be considered a ponzi, because the people who get to spend/borrow the new money FIRST get most for their buck while the last people in the business-cycle pay inflated prices. (last pay for the first)

But in bitcoin there is no interest rate. Because bitcoins are in themself attractive due to a fixed, predictible supply similar to gold, nobody gets any benefit of spending/borrowing the money first or last.

Hoarding, is not an investment, its a speculation. And it can lead to losses.

Let's look in this way, new participants put their dollars in bitcoin exchange and take bitcoins in their wallets as a debit note for their dollars. They expect a higher profit than putting it in a bank. Does that penetrate the surface?

So interest rate is a precise term in this situation, which is the benchmark of alll the investment.