A Ponzi scheme, is a type of investment fraud with these five features:

1. People invest into it because they expect good profits, and
2. that expectation is sustained by such profits being paid to those who choose to cash out. However,
3. there is no external source of revenue for those payoffs. Instead,
4. the payoffs come entirely from new investment money, while
5. the operators take away a large portion of this money.

Investing in bitcoin (or any crypto with similar protocol) checks all these items. The investors are all those who have bought or will buy bitcoins; they invest by buying bitcoins, and cash out by selling them. The operators are the miners, who take money out of the scheme when they sell their mined coins to the investors.

Features 3, 4, and 5 imply that investing in bitcoin, like "investing" in lottery tickets, is a very negative-sum game. Namely, at any time, the total amount that all investors have taken out is considerably less than what they have put into the scheme; the difference being the amount that the operators have taken out. Thus the investors, as a whole, are always in the red, and their collective loss only increases with time.

cont.

>>60621814 (OP)
cont.

The expected profit from investing in such a scheme is negative. While some investors who cash out may make a profit, that comes at the expense of other investors, who will lose more than their "fair" share of the general loss above.

Features 1 and 2 make the scheme a fraud, rather than simply a bad investment (or bad "musical chairs" gambling game). As a minimum, the operators should warn investors of the negative-sum character and negative expected profit. In the case of bitcoin (and all other cryptos), not only that does not happen, but there are thousands of promoters and "investment experts" who predict impressive price increases and/or claim that bitcoin will have massive uses in the future that would somehow make it valuable. Apart from the mendacity of those claims, those promoters never point out that such massive uses would not translate into revenue for the investors.

The observation that investing in cryptocurrencies is a ponzi scheme is not new or a cheap shot. Among many others, it was expressed in 2014 by economists Nouriel Roubini of NYU and Kaushik Basu of the World Bank (WB) and echoed by investment analyst David Webb in 2017 and by WB's president Jim Yomh Kim in 2018.

>>60621814 (OP)
I'm not buying chainlink or your boomer rocks, fuck off

>>60621815
> ponzi scheme without need for trusted third party

>>60621814 (OP)
>The operators are the miners
not entirely correct, in case of bitcoin the operators are whales and anyone can become an operator

>no revenue is generated with bitcoin
So i guess gold and silver are a giant ponzi scheme as well.

Youre really using all cylinders here huh buddy.

>>60621851
No, gold clearly fails to satisfy that definition on two counts.

First, few if any gold investors have expectations of profits. They generally invest in gold as a hedge -- a "store of value" -- that they hope will retain its value in case other assets go sour.

Second, as a commodity, gold HAS a source of revenue besides the investors; namely, the purchases by consumers like jewelers and industry, who take gold out of the market (2/3 of the production) for uses other than re-sale. When one buys 1 oz of gold, one gets a chip of a metal that one can sell to those consumers, and thus obtain some money that does not come from other investors.

(Nevertheless, investing in gold at the current price seems unwise, since its price is many times its "natural" price as commodity and so it is more likely to go down than up. Thus it is questionable, to say the least whether it is a good "store of value". But this problem is not enough to make it a ponzi.)

>>60621851
>gold and silver are a giant ponzi scheme
yes

>>60621851
>gold and silver are a giant ponzi scheme as well
yes
it doesn't mean it's necessarily bad that it's a ponzi, but it's important to acknowledge the fact so you don't end up being a fool holding a shiny rock nobody wants or a key that allows you to of changing a number in an online database that nobody uses
any ponzi scheme will earn you a lot of money if you're in early
bitcoin is still early

>>60621825
Have you seen oracle from Diadata or Supra. The latter also has AutoFi > LINK

>>60621814 (OP)
>>60621815
>>60621861

The thing that amazes me about this argument, is that it is straight from reddit, and the people who formulate this opinion sound smart, but completely fail to realize that this literally applies to the entire economy. Stocks? You're buying in hopes of selling to someone at a higher price. Housing market? You're buying in hopes of selling to someone at a higher price. Pokemon/or any card market? You're buying in hopes of selling to someone at a higher price. Silver? Gold? You're buying in hopes of selling to someone at a higher price. Dollars, pounds, euros, in reality they are all worthless, just paper. They only have value because we agree they have value. The entire economy is a ponzi, but for some benign reason, reddit trannies seem to hyper focus on bitcoin as if it's the exception.

>>60622253
Redditors would rather cut off their dick and balls than admit the System has ever lied to them

>>60622253
>Stocks?
No. Stocks have an external source of revenue, namely the profit that the company makes by selling its products and services to customers (not investors); and these profits eventually return to the investors through dividends or cash buybacks. In time, those profits are expected to exceed the amount invested, with a significant profit for all investors -- that is, they are expected to be positive-sum games. The market value of stocks reflects these expectations among investors. While some companies fail to achieve this goal, enough of them succeed to make stocks the favorite option of savvy investors.

Companies often fail to distribute profits to investors for several years -- while they are starting up, or because of mistakes or unexpected external events. The market value of their stock will then depend on the expectations by investors of the company's ability to become profitable again, and of its subsequent profits.

A company may also choose, with the approval of its stockholders, to reinvest its profit into growth. This is good for the investors because each becomes the owner of the same fraction of a bigger pie -- including hopefully bigger profits in the following years. And this growth generally makes the stock more valuable.

>>60622253
>Housing
No. Like stocks, real estate creates value while it is being owned, namely the sheltering service it provides to those who live in it. That value returns to the investor (owner) either by him living in the property, or by renting it to others.
>Silver? Gold? >>60621861
>Dollars, pounds, euros
No, national currencies too fail to fit the definition, because people do not "invest" in them with the expectation of gain. In fact, governments make their currencies slightly inflationary precisely to discourage hoarding.

You seem to lack the basic understand of how the economy works or definitions for that matter.

>>60622502
>>60622510

Yes, yes. Continue to keep pretending you're smart, and I'll continue laughing.

Just put the fries in the bag, lil bro.