Quote from: jballs on January 15, 2014, 06:14:30 AM

If you call bitcoin a pyramid scheme you might as well call Amazon stock, hell all stock in all companies, and of course SSI and pension funds across the board, pyramid schemes. You are equating anything that requires increased participation for growth in value a pyramid scheme.

Welcome to planet earth 21st century. It's all dependent on that.

If you would differentiate it from your run of the mill gifting circle or productless MLM, we would probably appreciate your point. Otherwise you really have none.

The main thing that makes the bitcoin market system a pyramid scheme is the sustainability. Bitcoin value won't be able to sustain itself as soon as the flow of new participants start to slow. We can see this from looking at the market history and the constant trend of bubble forming and bursting. People are only holding if they believe that new people will be buying and therefor will raise them higher in the pyramid. There are no annual dividends paid, nor isn't your invested funds put into practical use. Your investments will be used to grow the pyramid or pay out other participants.
You could argue that the investments go to practical use by rewarding miners, but I think that the mining arms race is one of the most idiotic things regarding bitcoin. Enlarging the miner network doesn't speed up transaction times, nor does it increase the security, because all the mining is pooled together into single points that could be compromised in spite how much network power they handle. The mining arms race is mindless and wasteful.
Important thing to consider is that bitcoin is still a gimmick as an payment option in the legal business world. It doesn't help companies make their payment system more efficient when adopting bitcoin payment. It makes the companies waste even more resources for the ability to handle bitcoin (reprogramming the accounting software) and to convert bitcoin to fiat after every transaction. Not to mention that the clients also have to pay the fee at the exchanges to convert their money into bitcoin. That is why the CC system is still a lot more efficient and comfortable to everyone. Only reason why some companies are currently adopting bitcoin payment is for free publicity and marketing reasons. Adopting bitcoin gets you a place in the daily newspaper and those loyal to bitcoin may become your loyal customers as well.
You can see how news about payment adaptation give very little effect to the market price. The main factor to have positive influence to the price, are new markets that will introduce a new wave of recruits.
And because there is very little practical (legal) use for bitcoin, is why there is very little intrinsic value in bitcoin. Remember that pyramid schemes also don't offer any real usable goods or services and the value it holds is created by new recruits.

But I agree that there are also stocks out there that could be considered as pyramid schemes (not amazon), and there are pension funds that have all the characteristics of an pyramid scheme. But to me "others do it as well" is not the proper justification here...