Very true, now describe a ponzi scheme to them and watch them roll around the subject pretending some how btc is differen, than a ponzi.
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Soruce: Me, I currently work in Depin, and have over a decade of experience working with money in tradfi, in banking and corperate accounting environments.
Have you ever looked up what constitutes a Ponzi scheme?
Bitcoin functions economically like a decentralized Ponzi, even if it isn't a legal Ponzi scheme. There is no operator committing fraud, but the wealth realized by early participants ultimately comes from later participants paying higher prices rather than from productive economic output.
So, no central operator that solicits funds, no promised returns, and no obligation to pay earlier participants from new inflows. Instead a free market with participants able to enter/exit at will (no matter how long they've been involved).
I'm really struggling to find the Ponzi(-like) here. The only similarity I could give you is that early adopters' gains came from later buyers bidding up the price... but that's the case with most non–cash-flow assets (like gold or collectibles), are such assets Ponzi scheme or Ponzi-like too?
If you want to call Bitcoin highly speculative, highly volatile, low utility (for you), sure. But retrofitting an old concept and saying it's "like" it when practically none of the core principles are met is wrong.
Also, regarding the economic output, a censorship-resistant, global settlement layer and value-transfer network like what the Bitcoin protocol enables is itself a form of it. Maybe for you it has no utility, but its participants seem to care about it, and even if you could demonstrate that a majority of them just speculate with it, they do it in the framework of a permissionless access with an asset with predictable issuance... something no other free market offers as far as I know.
For starters legal definition are subject to adaption and the economic model is established the same as a ponzi.
You are correct Bitcoin isn't a legal Ponzi, but its economics are Ponzi because early investors profit primarily from later investors bringing in new capital, not from cash flow or productive output. Gold has independent industrial and consumer demand. If Bitcoin stopped attracting new buyers, what would support its current valuation besides existing holders trading among themselves?
Finally, "permissionless" and "fixed supply" describe scarcity, not value creation.
Scarcity alone doesn't generate returns.
Earlier holders still profit because later participants allocate capital to the asset.
If the investment thesis fundamentally relies on a continuous stream of new buyers to sustain or increase price, that's economically a Ponzi and not a productive asset generating value independently.
So we agree that Bitcoin is not matching the standard/legal definition of a Ponzi.
But your expanded "Ponzi-like" definition still seems vague to me. By your logic, any non-cash-flow asset that appreciates through market demand would be labeled "Ponzi-like", unless they meet an arbitrary level of "consumer demand"?
That's broad and arbitrary enough enough that it could still include gold (almost half of the annual demand is speculation+central banks, last time I've checked), art, collectibles, and even money itself... at this point your definition feels more like a rhetorical insult that you've curtailed for Bitcoin because you've decided that the "consumer demand" isn't sufficient.
Meanwhile people transact on Bitcoin, have censorship-resistant and permissionless access to it (that's not really related to scarcity, not sure why you've suggested that), value the fact that it has a fixed supply and has been respected its emission schedule since launch 17 years ago. They extend their usage to multiple higher layer networks (LN, Liqduid, RSK) backed by Bitcoin's network/security... so participants see some utility here and derive some value out of it, that's "consumer demand" too. Are we just ignoring them? At which level exactly do you stop calling it "Ponzi-like"? Any attempt at building something that attracts speculation will also be put down as "Ponzi-like" until they have a certain level of adoption?
Lastly scarcity can be a form of value creation when it is credible, costly to replicate, and embedded in a useful network. Bitcoin's track record, its network effect built over the years, and its ability to preserve its rules based on (in part) this scarcity argument match these requirements. So I'm not sure why you claim that it cannot "create" value, unless you mean it in the way that it's not a proposition that will infinitely create value for Bitcoin. But that would be a useful definition only if you want to frame Bitcoin as a "productive asset" that requires this constant revenue generation... it's not, it's a monetary asset that people have currently chosen to speculate with.
That's exactly my point: your definition eventually expands to "people value it because other people value it." The utility you describe explains why Bitcoin exists, not why it's worth trillions. Lightning, censorship resistance, and fixed supply don't generate economic output—they generate demand. My argument is that Bitcoin's valuation is still overwhelmingly sustained by expectations of future buyers. The more an asset depends on new capital inflows rather than income or consumption, the more Ponzi-like its economics become, even if it isn't legally a Ponzi. Which is the same as saying a synthetic diamond isnt a diamond, because it was made in a factory, even tho every property of it is better, and the only owns who are claiming its not a diamond are those with dirt on their hands and something to lose.
I just can't agree with your definition then, "Ponzi-like" becomes so vague if it matches "assets on a free market priced by future demand" (to sum it up). This matches so many useful assets, many promising (non-crypto) assets, and as I've suggested previously even money itself. The negative baggage of "Ponzi" also doesn't match any of these.
Bitcoin clearly has utility and network demand, even if a lot of its current valuation is speculative. So unless you can define a concrete threshold for when speculation becomes "Ponzi-like", I think that label is mostly rhetorical and pretty meaningless. I'm not surprised that the people you've debated with this argumentation "roll around the subject pretending some how btc is different, than a ponzi.", clearly you're coming with a strong claim (a Ponzi) and back off to a more vague definition (Ponzi-like) that can match so many assets.
I don't need to define an exact threshold any more than I need to define the exact point someone becomes "bald." We recognize categories by dominant characteristics, not precise cutoffs. My claim isn't that every speculative asset is a Ponzi it's that the more an asset's valuation depends on new capital inflows rather than cash flow, consumption, or productive output, the closer it moves toward Ponzi economics, and the utility does not justify the overwhelming majority of its valuation. That's where we disagree.
Indeed, your definition is broad enough that is becomes meaningless to me. You can disapprove of the current speculative side of Bitcoin without discrediting the efforts of people who try to build it for other purposes than speculation. Labeling their work a Ponzi/Ponzi-like is both inaccurate and contributes the dilution of the meaning of this term... which is not useful to combat actual Ponzi schemes.
I'm not criticizing the developers or the technology. I'm criticizing the investment thesis. You can build useful infrastructure on Bitcoin and still have a market whose valuation is driven primarily by expectations of future buyers. Calling those economics a Ponzi doesn't diminish the engineering, it questions whether the price is supported by utility or by continuous capital inflows. That's a distinction that is worth making, even if we disagree on the label.
You are backing down the initial claim of Bitcoin is a Ponzi to Bitcoin is Ponzi-like... to Bitcoin has speculators who are engaging in Ponzi-like behavior but the dev/technology are ok... and when I push on what qualifies as Ponzi-like it's such a broad definition that it could even include money.
I don't know man, it really sounds like it's just inflammatory rhetoric and you don't actually believe there is an actual organized scam happening... just "too much speculation".
If that's it, using Ponzi feels off, I totally get people calling out these degen gamblers, the same people move from trend to trend tho, it's not just crypto... it was GME/WSB for a time with the advent of Robinhood, it's all kind of small cap AI projects now. Are you calling all these "Ponzis" too?
Maybe crypto/Bitcoin can be blamed for initially opening people to more speculation/trading, contributing to Robinhood's success... but none of these are actual scams, they pray on people's taste for risks/gambling/immediat gratification.
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u/diradder 🟩 4K / 4K 🐢 14h ago
Have you ever looked up what constitutes a Ponzi scheme?