Bitcoin is a Ponzi

[Anonymous No.28154956]

Bitcoin is a Ponzi

What is a Ponzi?
A Ponzi scheme, or "ponzi" for short, 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.

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.

cont.

[Anonymous No.28154999]

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.

cont.

[Anonymous No.28155041]

nice he just uploaded
https://www.youtube.com/watch?v=86m2OPbYYy0

[Anonymous No.28155071]

Objections
That is not the legal definition of ponzi in country X.The legal definition is relevant to understanding the legal implications: can anyone in Crypto Space be prosecuted for running/promoting/aiding that scheme in country X?

But if one wants to know whether bitcoin is a good investment, or just an old type of investment fraud with a new coat of paint, the legal definition is irrelevant. One must use a quacks-like-a-duck definition,that describes the mechanism through which fools and money are separated and the reasons why it is a fraud.

That is not the definition of ponzi from source X. Indeed there are many variants of the definition, and they may include other spurious requirements (see below). But those requirements were incidental features of almost all ponzis before bitcoin, not essential features. They are not the reason why investing in a ponzi is a very bad idea, nor the reason why ponzis are frauds rather than just bad investments.

A definition of "TV" a few decades ago could be "a device that converts electrical signals into an image on a cathode ray tube (CRT) screen." But when flat screen TVs appeared, it would have been silly to say "those are not TVs,because they have no CRT." Instead, people would have seen that the mention of CRT in that definition was spurious, and that a useful definition should capture the effect of the device, regardless of the technology.

It is not a ponzi because it does not guarantee a profit. A ponzi does not need to do that. Madoff's ponzi did not. A ponzi only needs to create the expectation of profit in enough people, which it usually does by actually paying such profits to the few who choose to cash out. Its investors will then be its main promoters.

Ponzis that guarantee a profit will catch only the most ignorant victims, because most people know that such guarantees are impossible in the world of finance; and they will be short-lived, because the cops will come knocking as soon as they see that promise.

[Anonymous No.28155181]

>A ponzi scheme must be a company.
That is not necessary; there have been many ponzi schemes [NYT1] [UGA1] in which the victims "invested" by simply giving money to the operator(s). And also many schemes in which the company was non-existent, such as the Bitcoin Savings and Trust that Tendon Shavers ("@pirateat40") pretended to have created.

>It must have a single operator.
Like other spurious requirements, this has been generally true of previous ponzis, but it is not relevant for the mechanism, and is not what makes a ponzi a bad investment.

>The operator must lie to investors about the source of profits.
Again, while this feature has been present in most previous ponzi schemes, it is neither a necessary nor sufficient requirement for a scheme to have the effect of a ponzi (although, depending on the jurisdiction, it may be necessary for the operators to be prosecuted).

Unlike those classical examples, items 3--5 of the definition and the negative-sum character of crypto investment are obvious to anyone who cares to analyze its money flow. However, the victims of the scheme are unaware of those features because they are obfuscated by a highly complex mechanism and economic arguments that they are not able to understand. While, on the other hand, crypto promoters from Andreessen to Zhao actively spread many lies and misleading claims about the scheme, through malice or ignorance. Investment "experts" like Tom Lee, Mike Novogratz [BPR1]. and Dan Morehead [FOR1] often give extremely optimistic predictions for the price on business or mainstream media. Those predictions have no rational basis whatsoever, and, while qualified with "perhapses" an "maybes" and "not investment advice" disclaimers, they are obviously intended to promote investment in the coins.

cont.

[Anonymous No.28155194]

>btc
>revenue

He obviously doesn't understand bitcoin or the purpose of bitcoin

[Anonymous No.28155268]

Crypto promoters also make dozens of claims about the virtues of the currency and/or the payment system, such as that it will "one day" replace credit cards, replace national currencies, protect people's savings from inflation or confiscation by government, make banks obsolete, starve governments to death by depriving them of taxes or "money printing", enable support of dissidents in oppressive regimes, "bank the unbanked", allow free internet trade of drugs and other illegal items, end corruption, poverty, and inequality, etc. etc. etc. Ripple Inc., for instance, has boasted for many years that their XRP currency will be used by banks for international transfers. Ethereum promoters claimed that its "smart contracts" will remove the need for lawyers and courts in business deals. Creators of several cryptocurrencies, such as IOTA and Tron (TRX), falsely claimed to have partnerships with entities such as Microsoft [PYM1] and the Liverpool Football Club [TRW]. Bitcoin (BTC) promoters falsely claim that the Lightning Network will "soon" turn their crippled payment system into a "Visa killer". And so on. When one tries to debunk any of these claims, the promoters simply switch to another one.

Even if these rosy claims were to materialize, none of them would result in a source of revenue for people holding bitcoins. The value of those payment services would go partly to the users who use coins for payments, and partly to the miners in the form of transaction fees. But most crypto investors do not understand this point. They, almost "by definition", do not understand what a good investment is -- e. g. why gold, stocks, and real estate have value, and why investing in a game that is guaranteed to be negative-sum is a bad idea. And bitcoin promoters make no attempt to educate them on those points -- quite the opposite.

cont.

[Anonymous No.28155422]

>By that definition, stocks too are ponzis.
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.

>By that definition, real estate too is a ponzi.
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.

cont.

[Anonymous No.28155454]

>>28154956
I just sold all of my BTC after reading this! Thanks, anon!

[Anonymous No.28155488]

>By that definition, gold too is a ponzi.
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.)

>By that definition the USD is a ponzi.
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.

cont.

[Anonymous No.28155489]

>>28155454
Thanks just bought 100k

[Anonymous No.28155571]

think of it like fine art

it has no inherent value, or rather it has no inherent utility. It's a piece of art.

[Anonymous No.28155589]

>It is not a ponzi because bitcoins can be earned and spent, not just bought and sold.
That makes no difference for the purpose of this discussion. If you buy a $2000 laptop directly with bitcoin, for financial analysis it is the same as if you had sold the coins for $2000 and bought the laptop with that. It would count as a $2000 cash-out. Similarly if you earn bitcoins by selling a $2000 laptop, or providing a service for which you would otherwise have charged $2000: it would count as a $2000 purchase of bitcoin.

>It is not a ponzi because bitcoins have intrinsic value.
According to this claim, bitcoins are scarce artifacts whose unique properties, like gold's, make them exceptionally good instruments for certain uses, such as payments or store of value.

This objection usually derives from the misconception that a bitcoin is a definite pattern of bits that required a huge amount of energy to produce, and that only a fixed number of them -- 21 million -- can ever be created. And that these properties make bitcoins (or cryptocoin X) more valuable than any other cryptocoin, including any fork from it. But neither of these claims is true.


cont.

[Anonymous No.28155613]

>>28155454
genuinely a good time to sell before Elon Musk tells everyone to dump next week.

[Anonymous No.28155725]

A bitcoin is not a definite pattern of bits; it cannot be printed, played on speakers, or shown on a screen. There is only a ledger with entries that assert "there are N bitcoins assigned to address Z" -- and it does not even say which bitcoins. The miners' massive hashing work does not go into creating the bitcoins, but into stamping the ledger to (allegedly) secure the record of past transactions. Once a bitcoin is moved, all that work becomes largely irrelevant; the security of that bitcoin -- more precisely, of that transaction -- will depend on the work done by miners after it was accepted.

Thus a bitcoin is not a definite artifact that somehow "contains" a huge amount of hashing work. That work is not attached to the bitcoins. So much so that each of the million bitcoins that Satoshi created on his laptop is equivalent to, and has the same market price as, the bitcoins created yesterday, each of which supposedly required 13'000'000'000'000'000'000'000 hash calculations to create.

Back in 2014 or so, when the US gov started auctioning the Silk Road bitcoins, some believers thought that those coins would fetch a higher price than "ordinary" ones -- because they would have been blessed as "legal" by the US government, and because of the "historical" value of having been owned by the greatest hero of Crypto Space. But that did not happen, precisely because bitcoins lack even the abstract "existence" of a tweet. How much would you pay for a $1.00 from my checking account that once was in Al Capone's checking account?

cont.

[Anonymous No.28155787]

Contrast that with the properties that make gold a unique metal with high and lasting demand for jewelry and other uses: those properties are physically attached to each bit of the metal, and thus are truly "intrinsic".

In fact, while bitcoins are created in a fixed amount only when the miners have expended a large amount of work, the creation of those bitcoins costs nothing. The reward per block is defined by two lines of code in a program. By changing those lines, the reward could be sixty or six million bitcoins per block, with no extra work being required from the miners. Contrast that with the cost of producing gold, that is defined by geology and not by some line in a program.

It is claimed that the code lines that define the block reward cannot be changed because that would be "against the miners' self interest", or would be "rejected by the community". But neither of these arguments stands up to a critical analysis, that considers the actual reaction of that community to more radical changes that have been imposed on the protocol -- such as BTC's intentional congestion, and Ethereum's breaking of the sacred "code is law" principle.

It follows that bitcoins have no more intrinsic value than coins of any other cryptocurrency, or than the shares of Madoff's ponzi fund. These too were only an entry in a ledger, and where worthless by themselves. Unlike stocks or dollars in a checking account, none of those ledger entries gave their holders legal property rights on anything else; their value being only the right, conceded by the operators, to play the game -- that particular game -- while it lasted.

cont.

[Anonymous No.28155851]

>It is not a ponzi because it has recovered after each crash.
Once more, that feature of past ponzis -- their ending with an abrupt, total, and permanent crash -- was a consequence of their particular features, not of the properties that made them fraudulent investments. Schemes that depended on a blatant lie, like Ponzi's or Madoff's, would crash abruptly when that lie was exposed; which usually happened when an excess of withdrawals over new investments made it impossible to honor the former. Once the truth got revealed, and confirmed by arrest of the operators, there was no further investment, and all investors demanded their money back.

However, as explained above, crypto ponzis sustain their expectation of profitability by technical and economic obfuscation, and claims about an indefinite future, rather than by a single and simple lie that implies constant income. Thus, even when new investments -- and consequently the immediate "payoffs" -- drop by 80% or more, as happened to BTC between 2017-12 and 2018-12, there will be a band of faithful investors who will continue to put all their spare money into the game, firmly believing that the price will "eventually" rise again and "go to the moon". And this money will be enough to keep the blockchain alive, even if with a lower hashrate. That is why even the most obviously broken cryptocurrencies can survive multiple crashes and years of dropping prices, and only die if and when the price finally reaches zero.

>People buy for the ideology, not as an investment for profit.
That is simply not true. For 99.9% of bitcoiners, when they buy bitcoins, they think they are investing -- and doing it because they expect to make big profits. One need only read what they write on forums to realize that. Those who truly buy it for ideological reasons (other than for criminal purposes) must be a very small minority.

[Anonymous No.28155861]

Nobody would lose anything if they stopped selling.
Stop selling faggots.

[Anonymous No.28155881]

>>28154956
central banking is a ponzi who gives a fuck

[Anonymous No.28155888]

>>28155422
>No. Stocks have an external source

This is where I lose you. I see the same type of faggots writing out paragraphs about how the stock market is a ponzi as well. I don't care about your trash arguments, stay poor.

[Anonymous No.28155941]

>Institutions buy it as a hedge, not as an investment for profit.
That may be true in some cases, but "hedge" seems to be often just an excuse to cover other reasons. Some of those institutions may be in fact expecting to make a profit, but understandably their managers do not want to admit that they are gambling with the company's funds -- and do not want to be blamed if they lose money on that bet. (And some of these managers may well be aware that it is a ponzi scheme, but believe that, by cashing out at the right time, they can collect many millions of dollars from the faithful bitcoiners who have been putting more than 10 million USD/day into the game, rain or sunshine.) A few other big investors may be doing it for ideological reasons. And some CEOs may have found ways to personally profit from company purchases.

It should also be noted that many of the "big investors" cited by promoters are in fact bitcoin-based funds that, like Grayscale's GBTC, buy bitcoins with their clients money, not with their own; and therefore will make a profit from service and maintenance fees, no matter what will happen to the price. Once those funds are excluded, the number of "institutional" investors remains quite small.

It is hard to believe the "hedge" excuse, because such purpose requires an asset that is expected to at least retain most of its value in the short term, and whose volatility is low enough. Adding to one's portfolio any amount of an "asset" that is losing the money put into it at the rate of 10 billion USD per year, and has the highest volatility ever seen, will only increase its risk, not reduce it.

>Ponzi should be written with capital "P".
That is true. The word should always be capitalized, like Boycott, Lynch, Hamburger and Sandwich.

end

[Anonymous No.28155978]

>>28155194
This

>yasss

[Anonymous No.28156239]

Ok op, you buy $100,000 of gold today and I'll be $100,000 bitcoin today, lets come back in 5 years, and again in 10 years, the again in 20 years, and we'll see who wins.

[Anonymous No.28156366]

>>28154956
Gold is neither an asset, nor a commodity. So it’s practically useless, or it is a collectible, at best? Surely, some gold investment products can have aesthetic or emotional value (think about grandma’s jewelry or some rare coins). And one can argue that the value of gold is created only by its scarcity and expectations of future investors pricing it more highly than we do now, just like collecting baseball cards or stamps. However, this is not the distinguishable feature of the collectibles, but of other investments (why do people buy stocks which don’t pay dividends?) – and the media of exchange as well. Moreover, for most investors, aesthetic features of gold don’t matter – only its monetary aspects are relevant.

Indeed, we accept something as a medium of exchange, based on expectations that people will accept in the future, so it must retain its purchasing power.

[Anonymous No.28156568]

>>28155194
Didn't read the entire post but the point is that anything that doesn't produce revenue (and never can) is speculation in it's purest form

[Anonymous No.28156645]

based op

[Anonymous No.28156670]

>>28156366
I believe the idea is that when these fiat systems collapse people will default back to gold like they used to. The horizons for gold are much longer both backward and forward in history. So in some sort of collapse, people assume eventually normality will return and gold will be just as valuable in the future.

Compare that to a bitcoin. The electricity goes out or the system is hacked by Israel and it's worth zero.

[Anonymous No.28156730]

>>28156670
Yes, we're going to return to GOLD

HAHAHAHAH yeah, fucking DELUSIONAL.

Absolutely FUCKING DELUSIONAL

[Anonymous No.28156771]

don't buy bitcoin
buy besra gold

[Anonymous No.28156778]

>>28154956
he is a genius

[Anonymous No.28156836]

>>28156568
Why do people believe US dollars have value? It's just a piece of paper after all.
Now people believe BTC has value. How hard is it to understand that? BTC is money, not a company. It isn't supposed to produce revenue.

[Anonymous No.28156929]

>>28156239
Little old BTC still around in 20 years? hmmm

[Anonymous No.28157000]

>>28154956
I love Peter Schiff. He is my hero.

[Anonymous No.28157013]

>>28154956
>>28154956

[Anonymous No.28157027]

>>28156366
>useless
No
GDX is a liquidity proxy for bonds

[Anonymous No.28157071]

>>28157000
What a moron.

[Anonymous No.28157096]

>>28157000
What makes this even funnier is that it's @ 26K. Imagine when it hits 150~200K EOY.

[Anonymous No.28157131]

Holy shit he is on fire today baby.

Elon Scamusk BTFO.

[Anonymous No.28157249]

>>28154956
So is the US Dollar a ponzi scheme run by the federal government?

[Anonymous No.28157280]

>>28155851
I have been listening to this bullshit since 2013.

[Anonymous No.28157357]

>>28157131
So this is what nuclear levels of cope look like.

[Anonymous No.28157358]

>>28157027
>GDX is a liquidity proxy for bonds
Cool. My bonds are registered in a tamper-proof blockchain. Your bonds are registered in some MySQL database

[Anonymous No.28157386]

>>28154956
in a nutshell - yes

[Anonymous No.28157395]

>>28156836
BTC isn't money because it barely manages to meet one of the three requirements (and you need all three) to be money.

[Anonymous No.28157446]

It is unironically a ponzi scheme run by commies but the reason is not readily apparent to virtually anyone including schiff

[Anonymous No.28157553]

>>28157249
>>28155488

>By that definition the USD is a ponzi.
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.

[Anonymous No.28157588]

>>28157131
>comparing GME to Bitcoin

jesus christ

[Anonymous No.28157595]

>>28157446
Bros... I'm just trying to PND it...

[Anonymous No.28157612]

>>28156836
>Why do people believe US dollars have value? It's just a piece of paper after all.
unironcially because it traced its value to gold.
Also because you can pay off the mob (irs) with it.
BTC cannot be money because nothing that has a deflationary supply can act as a money. It is simply impossible. If BTC actually became the world standard, we would relatively quickly transition to eth or some other crypto with perpetual tail emissions or staking rewards

[Anonymous No.28157665]

>>28157553
>governments make their currencies slightly inflationary precisely to discourage hoarding.
I'll just have to hoard even more.

[Anonymous No.28157739]

>>28154956
THAT DUDE ISN'T SHILLING AND FUDDING, HE'S HONESTLY CONCERNED WITH YOUR PORFOLIO, ANONS. BUY GOLD INSTEAD

[Anonymous No.28157750]

>>28157395
The biggest problem in my opinion is the IRS treating cryptocurrency as property and taxing it as such. Can you imagine if every time you went to the store and bought an item you had to verify and record the value of your dollars compared to when you first earned them and then pay capital gains tax at the end of the year on every single purchase you made? That's what you have to do with cryptocurrency and it's bullshit. Literally the US government regulating cryptocurrency in a way that intentionally hinders its ability to compete with fiat.

[Anonymous No.28157800]

>>28157595
It looks like the scam will go on for another decade because the crypto space is a commie infested shiester fest, so investing in btc is a good idea for now

[Anonymous No.28157828]

>>28157395
I just bought 2 24 x 24 x 72 wireshelving and 2 48 x 30 x 36 inch stainless steel tables from overstock.com using BTC. I should have used junk fiat for it. I see that now.

[Anonymous No.28157832]

will schiff kill himself when BTC hits a market cap of $1000T?

[Anonymous No.28157849]

>>28157131
Why hasn't he committed suicide? Serious question.

[Anonymous No.28157927]

>>28156239
lol I would take that and I have no problem with people buying crypto

[Anonymous No.28157938]

>>28157800
>commie
>shiester

OK, you seem to have beef with BTC. Why? I ask you, please give me the black pill.

[Anonymous No.28157950]

>>28154956
Sounds a lot like gold

[Anonymous No.28157969]

>>28157750
You don't have to pay capital gains on every increase in BTC value.

[Anonymous No.28157982]

>>28157750
>bitcoin will always be taxed

[Anonymous No.28158059]

>>28157938
Because he's a nigger from /pol/.

[Anonymous No.28158087]

https://www.youtube.com/watch?v=18MqtJ7UD0M

[Anonymous No.28158150]

>>28157982
Id literally become circumcised and and jew for this.

[Anonymous No.28158191]

>>28155194
>He obviously doesn't understand bitcoin or the purpose of bitcoin
>muh limited decentralized currency
>BTC, Link, XRP, Doge, LTE, UNI...etc.
and neither do any of you buying into crypto

[Anonymous No.28158206]

>>28157750
>what is a taxable event

[Anonymous No.28158210]

>>28157969
Where did I say that? I said you have to pay capital gains tax on every transaction. Buying an item with BTC is considered by the IRS to be selling BTC for equivalent USD in exchange for the item and you have to pay tax on the conversion of BTC to USD for the transaction.

>>28157982
I didn't say it will always be taxed, I said BTC will never be a viable currency until it stops being taxed.

[Anonymous No.28158231]

>>28158087
Watched 3 seconds and turned it off. Fucking women are annoying and belong in the kitchen.

[Anonymous No.28158234]

>>28154956
MOOOOOODDDDSSSSSSSS
>HOW MUCH DID PETER PAY YOU RETARD
>GOLD IS A PONZI SCHEME
>YOU ARE A RETARD

[Anonymous No.28158294]

>"A bitcoin is like a commodity, in the sense that it’s a scarce digital "object" that provides no cash flow, but that does have utility."
This sentence contains four errors: a true commodity will provide a cash flow, bitcoin is not really "scarce", it has negligible utility, and is not at all like a commodity.

A commodity must have producers, who supply it to the market, and consumers who take it permanently out of the market. Then the theory of markets applies, and says that the price will be the point where the producers' price x supply function intersects the consumers' price x demand function.

Speculators or middlemen, who buy the commodity for re-sale rather than consumption, will modify those functions and hence change the price away from that "natural" value. But these distortions are highly volatile, since they depend entirely on the feeling of the speculators about future prices.

Bitcoin has producers (the miners), but has no consumers: all coins that have been created are (and forever will be) conceptually in the market, even if they are stored in the private wallets of the "hodlers". It follows that its "natural" price as a commodity is zero. Its market price is 100% speculative overpricing -- that is, entirely dependent on the investors' feelings about their future feelings about their even later feelings... which explains its exceptional volatility.

[Anonymous No.28158300]

>>28158191
nobody really understands it (very few at least), which is why it has any value at all. Kind of like a Jackson Pollack painting.

[Anonymous No.28158374]

>>28158206
If you go to the store and buy an item in cash it is not a taxable event. If you go to an online store and buy an item with BTC it is a taxable event. It's bullshit and until the IRS stops doing that cryptocurrency will never work as real currency. The average person doesn't want to file 1099 forms every year for every latte they bought throughout the year.

[Anonymous No.28158381]

>"Specifically, [Bitcoin] is a monetary commodity; one whose utility is entirely about storing and transmitting value."
There is no such thing. Commodities that have been used for money all had an "intrinsic" value as a commodity, created by a consuming demand, which was the basis for their monetary value. Even the rai stones of Yap, which are commonly advanced as an example of a form of "money" with purely conventional value, had in fact an intrinsic value, because they were made of a stone with beautiful appearance that was almost non-existent in the island.[6].

>"By similar logic, gold is a 5,000 year old Ponzi scheme."
Gold is primarily a commodity with a substantial and dependable consuming demand. Currently, about 2/3 of gold's production (2100 tons in 2019) is bought for use in jewelry and other decorative or utilitarian uses. Gold also has a large speculative demand, by people who buy it with intent to re-sell, mostly for "store of value" purposes. This speculation has inflated its market price to many times its "natural" price as a commodity. But the speculative demand would not exist without this basis.

[Anonymous No.28158424]

>>28157938
>>28158059
When compared to other cryptos with the purpose of being a store of value and medium of exchange, i.e. the entire point, its fucking garbage. The only thing is is good at is continuously increasing in value (as long as people believe)

And yes, crypto-commie sheisters are running most of these coins

[Anonymous No.28158471]

>"[Gold's] unique properties ... made it continually regarded as being optimal for long-term wealth preservation and jewelry across generations: it’s ... pretty, malleable, ... and nearly chemically indestructible."
Again, lumping the jewelry and store of value uses is misleading. Indeed, those properties of gold -- plus its ability to be welded by hammering, its electrical conductivity, and more -- are what created the the demand for jewelry and industry. That demand, and its relative scarcity, are what made gold valuable; and this in turn made it a viable store of value. Its permanence and high value per weight also made it a viable form of money (but definitely not the "best" or "standard" one).

>"Gold [is Bitcoin's] closest comparison. ...[Like gold,] Bitcoin relies on the network effect, meaning a sufficiently large number of people need to view it as a good holding for it to retain its value."
And this is the great lie that the false statements about gold are meant to lead to. Sorry, but nothing can retain a value for long based only on common belief that it has value.

[Anonymous No.28158527]

>>28158374
>If you go to the store and buy an item in cash it is not a taxable event. If you go to an online store and buy an item with BTC it is a taxable event.
oh shit for real? Damn. It's almost like the government ensures a monopoly on their currency because that's what they get paid taxes in, and they can always print more of it so they can run eternal deficits.

[Anonymous No.28158550]

>>28158471
>Sorry, but nothing can retain a value for long based only on common belief that it has value.
By this logic human life will lose value and everyone will kill themself since the only value that a person's life has is the value they place on it...

[Anonymous No.28158564]

>>28154956
(((Schiff)))

[Anonymous No.28158593]

>"By the broadest definition of a Ponzi scheme, the entire global banking system is a Ponzi scheme."
This is irrelevant and misleading. Indeed, this is one of the most cringe-worthy tropes used by bitcoin promoters to convince people to give them their "worthless" dollars in exchange for the "valuable" digital donut holes that they are generously willing to sell.

As I explained , a national currency like USD or JPY does not fit the definition of ponzi for multiple reasons. There is no expectation of profit by "investing" in it. There are no profits paid off to those who choose to "cash out". Thus the new "investment" money is not used to pay off those non-existent profits; and the operators of the "scheme" do not take a fat slice of that "investment" money.

And the same objections apply to the attempt to cast "the entire global banking system" as a ponzi scheme. No one expects to make a profit by depositing money in a bank, there is no profit paid to those who cash out, etc. etc.

National currencies and bank accounts are clearly not meant to be investments, and therefore it makes no sense to compare them to investments. This line of argument is like claiming that a dead rat is a better paperweight than a chair, because chairs are disgusting.

[Anonymous No.28158660]

>>28158471
>but definitely not the "best" or "standard" one
no, either gold or silver is the best money. If you're gonna say that bitcoin is a scam AND that gold isn't the best money, I'm assuming you are either a greenbacker that used schiff to appeal to this board or you are just randomly assuming that we will find an even better money.
The Knight commodity basket currency is stupid

[Anonymous No.28158783]

>"Fiat currency is an artificial commodity, in a certain sense."
Only in the "wrong" kind of sense. Modern national currencies are totally not commodities. They don't have a consuming demand, and their value is totally not determined by the laws of supply and demand.

>"When we do work or sell something to acquire dollars, we do so only with the belief that its large network effect (including a legal/government network effect) will ensure that we can take these pieces of paper and give them to someone else for something of value."
That is unfortunately a common misconception that is spread by cryptocurrency promoters, to mislead their victims into thinking that the value of the coins is as well-founded as that of dollars and euros.

That is totally wrong. A national currency has a stable value only because, and as long as, its central bank is willing and able to stabilize its value, through constant intervention in its circulating supply. Someone who accepts a dollar bill trusts that it will retain its value because he trusts that the Fed will do that job -- even if he does not know what the Fed is and what it does.

[Anonymous No.28158852]

>>28157982
Based jews
There's something I never thought I'd ever say

[Anonymous No.28158921]

>"If about 20% of people were to try to pull their money out of their bank at the same time, the banking system would collapse. ... That’s actually one of the SEC’s red flags of a Ponzi scheme: difficulty receiving payments."
of course banks lend out most of the cash that clients deposit, keeping only a small reserve to satisfy expected withdrawals. That is their function; that is how they get the revenue to pay their operating costs and the profit of their stockholders.

If you lend money directly to someone who is setting up a restaurant, you cannot demand the money back at any moment before the agreed-to deadline. If you buy stock of a company at its IPO, you cannot demand to receive immediately all your money back as dividends. It would be absurd to view that as a "red flag" suggesting that lending money or investing in stocks are ponzi schemes.

>"Each individual unit of fiat currency has degraded about 99% in value or more over the multi-decade timeline."
This is another old trope of "gold bugs" that bitcoin peddlers have adopted, for the same purpose: convince their victims to give up their dollars.

Yes, a yearly inflation rate of 4% per year means 99% loss in 120 years. But that number is relevant only if you just dug up the bank robbery loot that your great-grandparent "invested" into your backyard in 1900. In real terms, if you spend or invest your monthly salary during the following month, a 6% USD inflation rate means a "money holding tax" of 0.25%. That is, for each $1000 that your employer spends on you (after taxes and benefits), inflation will take $2.50. That is negligible compared to other taxes and the cost of just staying alive.

[Anonymous No.28159131]

>"[USD inflation] means that investors ... need to buy investments instead, which inflates the value of stocks and real estate compared to their cash flows, and pushes up the prices of scarce objects like fine art. Bitcoin is an emergent deflationary savings and payments technology..."
Indeed, in an economic crisis the whole country, if not the whole world, sees their revenue and wealth reduced; and investments generally lose value. So the solution to the is to invest into a ponzi that gives you the illusion of enrichment, while giving all your money to the operators and earlier investors?

>"DBS Group Holdings, for example, which is the largest bank in Singapore ... generates over 2.5 billion USD per year in fees. And that’s one bank with a $50 billion market capitalization."
Those are wholly irrelevant numbers. It makes no sense to conflate the fees for money transfer with interest from loans and fees from other services. And it makes no sense to compare those numbers with the bank's market cap: one should instead compare them to the volume of the corresponding services.

[Anonymous No.28159193]

>"Wealthy investors store wealth in various items that do not produce cash flow, including fine art, fine wine, classic cars, and ultra-high-end beachfront property that they can’t realistically rent out."
Fine wines have a consuming demand, so they can be analyzed as commodity investments. Luxury real estate too has a consuming demand -- even if it it can't be rented, the owners can live in them, full or part time, and thus receive some revenue in the form of service. As for fine art and classic cars, it is pointless to view them as investments, even if as "stores of value", because their prices are not amenable to meaningful economic analysis. The "investors" themselves seem to view such purchases as mere ostentation of wealth -- like lighting cigars with $100 bills.

>"The vast majority of gold’s usage is not for industry; it’s for storing and displaying wealth. ... here are 60+ years of gold’s annual production supply estimated to be available in various forms around the world."
Lumping the speculative demand and stockpile with those of jewelry is very misleading, because they have vastly different prospects for the future. The demand for jewelry (and industrial uses) is likely to remain stable for decades to come, and little of the gold locked into those uses is likely to return to the market, irrespective of its market price. The speculative demand, on the other hand, can easily vanish, or even reverse (with speculators selling more gold than they buy), in a relatively short time. This fact explains the historic volatility of gold prices (swinging from over 2000 to less than 350 USD/oz, in constant dollars). [9]

[Anonymous No.28159215]

>>28155851
What you say is right about Bitcoin in particular, but not necessarily other crypto currencies or blockchain technologies. DYOR, buy something that is actually worth something.

[Anonymous No.28159364]

>>28154956

[Anonymous No.28159375]

>>28158527
Yup, the IRS doesn't see buying an item with BTC as an exchange of BTC for an item, it sees it as a SALE of BTC for USD to exchange the USD for the item. It's basically like buying something using stock shares. If you use BTC to buy things you get double taxed (sales tax from the store, plus capital gains tax) and it's a huge disincentive for using BTC as actual currency.

[Anonymous No.28159703]

>>28159364
Two beggars are sitting side by side on a street in Rome.

One has a cross in front of him; the other one the Star of David. Many people go by and look at both beggars, but only put money into the hat of the beggar sitting behind the cross.

A priest comes by, stops and watches throngs of people giving money to the beggar behind the cross, but none give to the beggar behind the Star of David.

Finally, the priest goes over to the beggar behind the Star of David and says, "My poor fellow, don't you understand? This is a Catholic country; this city is the seat of Catholicism. People aren't going to give you money if you sit there with a Star of David in front of you, especially when you're sitting beside a beggar who has a cross. In fact, they would probably give to him just out of spite."

The beggar behind the Star of David listened to the priest, turned to the other beggar with the cross and said: "Moishe, look who's trying to teach the Goldstein brothers about marketing."

[Anonymous No.28159772]

>>28159364
>honk honk

[Anonymous No.28159878]

>>28155861
It's not us wee retail bitches. If/when these guys start dumping it's going down

https://bitcointreasuries.org/