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Any medium of exchange issued by parties who are NOT the producers of the goods and services traded with said MOEs is a S C A M.
Requires a victim who is gullible to invest his valuables with the hucksters running the S C A M.
Of course, this includes "legal tender" based on debt-credit,borrowed at usury, with no par value. (Ex: Federal Reserve Notes, per 12 USC Sec. 411)
In 1920, an International Reply Coupons (IRC) bought in Italy was worth four times the purchase price in the US. Ponzi sent money to relatives in Italy, who purchased IRCs and sent them back to him.
Ponzi's scheme collapsed after someone actually did the math, and calculated that Ponzi would have to have purchased 160 million International Reply Coupons to produce the profits he claimed. In reality, the Post Office Department could only confirm about 27,000 of the coupons were in circulation. The Post Office Department also reported that there had been no mass redemptions of IRCs.
The USPS stopped selling IRCs as of January 27, 2013.
The danger of bitcoins is the ever increasing cost of electricity to validate a single transaction. Without the exponential growth in price, the bitcoin miners will get out of the business because it is not cost effective. When it starts taking weeks to verify a transaction the value of BTC could drop like a stone.
In that sense BTC resembles a classical pyramid scheme which depends on exponential growth. The collapse is likely to be sudden and severe spiral.
Not quite 'classic', as the number of future/total bitcoins is set at 21,000,000.
BTC are divisible up to 8 decimal places. Even if BTC zooms to $100,000 apiece a satoshi will still be only worth one mil.Just as Ponzi was selling and buying far more IRC than existed, eventually BTC will require more electricity than can reasonably be produced.
That is what makes it a classic pyramid scheme You are not producing any true wealth, but you are buying and trading something until you grow beyond your fixed resource.
BTC are divisible up to 8 decimal places. Even if BTC zooms to $100,000 apiece a satoshi will still be only worth one mil.Just as Ponzi was selling and buying far more IRC than existed, eventually BTC will require more electricity than can reasonably be produced.
That is what makes it a classic pyramid scheme You are not producing any true wealth, but you are buying and trading something until you grow beyond your fixed resource.
But the bitcoin user/investor know this or should know this.
"Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion."
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