[ExI] [mta] Re: Long Term Bitcoin Catastrophe?
gts_2000 at yahoo.com
Thu May 23 23:17:33 UTC 2013
Brent Allsop <brent.allsop at canonizer.com> wrote:
>>> It could become the Mother of all Ponzi schemes.
>>Ponzi schemes, normally understood, involve early investors being paid with the investments of late investors. That is not happening with bitcoin.
>If you really think this, you should canonize it. I bet nobody would agree with you. But I could be very mistaken. You haven't convinced me with just this.
"Definition of 'Ponzi Scheme'
A fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors. These schemes usually collapse on themselves when the new investments stop." http://www.investopedia.com/terms/p/ponzischeme.asp
Bitcoin might turn out to be a boondoggle, but it is not a Ponzi scheme so defined.
Bernie Madoff ran a true Ponzi scheme. He paid his early investors with the money he received from his later investors. He was a fraud. This is why he is spending life in prison. If bitcoin collapses, who will go to prison, and why? The answer is that nobody will go to prison. Bitcoin is speculative, but not fraudulent.
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