Why Bitcoin is worse than a Madoff-style Ponzi scheme

Fresh in-pouring of victims to sustain the whole thing, while some bigger players benefit.<p>Im sorry, I don&#x27;t want to argue anymore with crypto advocates. There is no more rational discussion to possibly be had about any of the current contenders in this space. The whole thing needs to be pulled apart. Just because some people earn money from it, doesn&#x27;t make it moral, a good idea , useful, or bettering human society. Oil companies also make a lot of money and we can see where that has ended up.

This argument is so basic yet it keeps being repeated over and over on HN...<p>It boils down to you can&#x27;t expect a return on bitcoin hence it&#x27;s shouldn&#x27;t be worth anything. If that argument was true, then gold is a ponzi that shouldn&#x27;t be worth anything and the same would apply to art.<p>A slightly more advanced rebuttal would be to say, yes but gold has some industrial use and you pay for art because you can enjoy consuming it. But the price of gold and rare artistic pieces is many times their &quot;useful value&quot; if defined as such.<p>All these arguments show a deep misunderstanding of what constitute money, the history of money [1] and the concept of &quot;hard money&quot;. Bitcoin is the only way to transfer an arbitrary amount of money in a way that is fast, verifiable, permissionless and to an arbitrary location. This particular use, that no other tool makes possible, means it has some value to some people and consequently should be worth something. The question of what its fair value is harder to answer but just because gold is worth more than its industrial value doesn&#x27;t make it a ponzi scheme.<p>[1] <a href="https:&#x2F;&#x2F;econwpa.ub.uni-muenchen.de&#x2F;econ-wp&#x2F;eh&#x2F;papers&#x2F;0211&#x2F;0211005.html" rel="nofollow">https:&#x2F;&#x2F;econwpa.ub.uni-muenchen.de&#x2F;econ-wp&#x2F;eh&#x2F;papers&#x2F;0211&#x2F;02...</a>

Indeed my first assessment way back when it was &lt;$1 was that it was a Ponzi scheme. However, the market has been saying something I ignored for years... so I took another look at things and this time really took the time to study it. By study it I mean:<p>1) Read the Whitepaper<p>2) Read the Bitcoin Standard Book (and subsequently the Fiat Standard book)<p>3) Listened to The Saylor Series on YouTube, and<p>4) Did the MIT Blockchain and Money course.<p>I then re-considered criticism from:<p>1) Various Warren Buffet and Charlie Munger interviews<p>2) The Blackpaper by Nassim Taleb, and<p>3) Various interviews with Peter Schiff.<p>My conclusion is that most arguments raised by the above respectable figures in criticism of Bitcoin are ignorant of evidence contrary to their arguements and display a surprising lack of knowledge or understanding that careful study would have overcome. I say that as I was that ignorant person. There are some valid criticisms, however they are in the same category as any new emerging technology.<p>I then decided to venture into crypto with money I could completely lose and not worry about, and it really helped my understanding further.<p>I&#x27;m now convinced this is like the pre-dotcom bust whereupon Amazon, Google, Facebook etc emerged to generate enormous value. There is enormous Alpha here to be made but I&#x27;m not arrogant to believe I know what will emerge as the market winners, but I have a stake in it now, and I&#x27;m further educating myself. I encourage dedicated study and an open, but critical mind, before making any aspersions on crypto.

My prediction: it will take years for this to pop in the absence of a general economic crysis. The crypto coins gave just struck the most anti tech circle of my friends. They are watching youtube videos of how to mine on mobile phones besides buying the most obscure coins they can find.<p>So it looks to me like there&#x27;s plenty of potential &quot;investors&quot; out there who can sustain this thing for years to come.

<a href="https:&#x2F;&#x2F;archive.md&#x2F;sQhtq" rel="nofollow">https:&#x2F;&#x2F;archive.md&#x2F;sQhtq</a>

If you think Bitcoin is worse than a Madoff-style Ponzi scheme, wait until you hear about Lebanon&#x27;s central bank[0].<p>[0]<a href="https:&#x2F;&#x2F;www.nytimes.com&#x2F;2021&#x2F;07&#x2F;17&#x2F;business&#x2F;lebanon-riad-salameh.html" rel="nofollow">https:&#x2F;&#x2F;www.nytimes.com&#x2F;2021&#x2F;07&#x2F;17&#x2F;business&#x2F;lebanon-riad-sal...</a>

The counter argument is that Bitcoin provides more than 45 million dollars a day in utility.<p>edit: Does the lightning network need Bitcoin to work or is it just Venmo?

There was a period of time where bitcoin was almost exclusively used for illegal substances &#x2F; activity - predominately for drugs (the only time I ever used bitcoin was to buy adderall on silkroad), but also for things like hiring hitmen, weapons, and child pornography.<p>To see cryptocurrency grow to what it is today, especially given the context of what it originally was used for is a bit demoralizing.

I&#x27;m quite surprised that Madoff&#x27;s investors are being successfully pursued. Presumably they invested in good faith, and so are not at fault.

I am glad the ft audience think BTC is a bad idea. They are mostly well-off elite in developed countries. Bitcoin is meant to erode their power.

The Bitcoin situation reminds me of one wing of current U.S. politics. It&#x27;s a complete fraud that&#x27;s been obvious to a lot of people for quite a while now. But countless people have become so married to it and have allowed it to become a core part of their identity that they&#x27;re no-longer capable of seeing reality clearly.<p>It comes with all the same kinds of personalities too:<p>- The angry commenter who just wants you to know that _you&#x27;re_ the idiot, not them<p>- The &quot;just show me the facts then&quot; perpetually recursive denier<p>- The few who manage to benefit from it and are amplified as a signal that _everyone_ will benefit<p>- The few at the top actually making all the money, funding the further manipulation of the weaker minds at the bottom<p>Yeah, it&#x27;s all a Ponzi scheme. A cult. All that.

I love unfounded FUD articles like this. I hope it dips the price so I can get bitcoin at a discount

The biggest irony of Bitcoin and similar schemes is that they actually commoditized money-printing and caused massive inflation, despite the libertarian claims that come along with it about how deflationary they are, and how we need to prevent government to do so.<p>It is pretty counter-intuitive to understand that you can have two transactions between three parties, where everything is properly accounted for with double-entry check, and yet, more money is created in the system as a whole.<p>So people, of course, in this gold rush, run the money printers 24&#x2F;7. Of course, if Bitcoin replaced normal currency, it could be conceivably deflationary (probably for worse). But it doesn&#x27;t, it just adds to it. I don&#x27;t think humanity is fully aware of the amount of inflation that various crypto-schemes caused around the world.

Sure... please make it drop so I can get more.

I always UPvote negative Bitcoin comments... the longer time I have to buy it cheap, the better...

Am I the only one hitting paywall while accessing this article?

It&#x27;s obvious that there is global demand for money which is separated from state control. You can see this demand in Bitcoin price. Bitcoin is the opposite of a Ponzi scheme, because there&#x27;s no central operator which can arbitrarily print more money for its own benefit. It&#x27;s completely transparent and traded on open markets.