If I understand correctly, a pyramid scheme is something like when you try to convince me that 2 people will send me a dollar if I agree to send you a dollar. Is bitcoin really like that? In what sense do I have to send someone “already enrolled” in the scheme a dollar to get my two dollars?
It’s not a pyramid scheme in the exact sense, but Bitcoin’s more valuable with a wide subscriber base, and early adopters have a large advantage in terms of acquiring portions of the Bitcoin space cheaply. The changes in the investment-to-returns ratio over time that these pressures produce do end up looking a lot like a pyramid scheme’s in the case where Bitcoin fails as a currency, even though you can make that investment in GPU cycles rather than dollars.
If it succeeds as a currency, of course, that curve ends up looking more like what you’d see in a gold rush or another emerging market. So some of this looks like dueling prognostications to me, or even just different levels of cynicism regarding the concept.
(By way of disclaimer, I don’t currently own any Bitcoins.)
Looks like one of those instances where pyramid scheme is used as a catch all term for scams which aim to look like a franchise or investment. Could be that they are thinking of the miners as franchisees but that would only make sense if the founders were selling graphics cards.
I believe the technical term for what the bitcoin founders are making the right moves to be doing is a pump-and-dump.
If I understand correctly, a pyramid scheme is something like when you try to convince me that 2 people will send me a dollar if I agree to send you a dollar. Is bitcoin really like that? In what sense do I have to send someone “already enrolled” in the scheme a dollar to get my two dollars?
It’s not a pyramid scheme in the exact sense, but Bitcoin’s more valuable with a wide subscriber base, and early adopters have a large advantage in terms of acquiring portions of the Bitcoin space cheaply. The changes in the investment-to-returns ratio over time that these pressures produce do end up looking a lot like a pyramid scheme’s in the case where Bitcoin fails as a currency, even though you can make that investment in GPU cycles rather than dollars.
If it succeeds as a currency, of course, that curve ends up looking more like what you’d see in a gold rush or another emerging market. So some of this looks like dueling prognostications to me, or even just different levels of cynicism regarding the concept.
(By way of disclaimer, I don’t currently own any Bitcoins.)
Looks like one of those instances where pyramid scheme is used as a catch all term for scams which aim to look like a franchise or investment. Could be that they are thinking of the miners as franchisees but that would only make sense if the founders were selling graphics cards.
I believe the technical term for what the bitcoin founders are making the right moves to be doing is a pump-and-dump.