Post
Topic
Board Economics
Re: Why bitcoin indeed "looks" like a Ponzi scheme
by
buwaytress
on 06/12/2017, 08:30:59 UTC
Please, let's not review every possible definition of a ponzi scheme.

The main characteristic of a Ponzi is to give capital gain to 1st investers with the money of the 2nd investers, give capital gain to the 3rd with the 4th, etc... other stuff, like centralized or not is detail.
I said bitcoin "looked like" a ponzi but it is more than that.

So now, let's not review every definition of a ponzi, instead let's cherry pick details to offer a valid comparison? That's the common theme of every failed thesis paper... Even if you use the main characteristic you just pointed, out, as I said, then every trade of every asset can "look like" a ponzi. That's a poor way to start an argument. Definition is usually the starting point. Clarify it, then go from there.

On one side, there is the trading part, giving sometimes huge fluctuations to the value (panic selling, incertitude, external actors...). I think THIS part is the bubble part. Sometimes, price increase drastically and then crashes. Bubble.
On the other side, the price is sky rocketing (and also helps bubble crashes recoveries) because bitcoin exposition controls the number of people coming in (and also the global point of view, even of the bitcoin first enthusiasts : "oh yeah, we talk a lot about bitcoin today, I'll buy some more because I think it will make the price rise").

Bubble symptoms I agree with, in fact, even the most ardent advocate will feel Bitcoin is in a kind of bubble (that doesn't necessarily mean it crashes to zero with every burst) but not ponzi. A ponzi is not a bubble... You might have confused yourself trying to describe a bubble, somehow thinking it looks like a ponzi.