On Wed, 27 Dec 2017, Luke Kenneth Casson Leighton lkcl@lkcl.net wrote: ...
(3) this is quite LITERALLY the opposite of a ponzi scheme. they are LITERALLY making the bitcoin that underpins the entire scheme. this is a completely unique approach which is actually extremely clever.
It seems to me that one way of looking at this is that they are using other people's money to bet that the BTC price will go up on average, and then using the resulting profit to do a spot of mining as cover.
Whether they are paying people back from the speculation profit and/or in the traditional ponzi manner from later investor's funds doesn't seem to make much difference to me.
Most of the people involved in this to date would almost certainly have been better off simply buying BTC at the start, and selling them some time later on.
Likewise, saying that you're only putting BTC in, and hence its only pretend money (or some such) ignores the opportunity cost of no longer being able to sell those BTC for cold hard cash.
So this looks to me like a ponzi built on a speculation bubble, which might be a way of making the ponzi survive longer than it would do otherwise, but if and when the BTC bubble bursts[1] investors are going to discover that the people in charge have done a runner with the remaining assets and that any balance still held within the scheme is just gone.
Luke, given your repeated assertions about the importance of ethics I'm astonished that you'd be willing to be anywhere near such a scheme.
Cheers, Phil.
[1] The actual underlying value of BTC, if it has one, seems to me to be a decentralised medium of exchange. The volatility has recently convinced Storm to stop accepting them:
http://steamcommunity.com/games/593110/announcements/detail/1464096684955433...
which seems like a pretty bad sign for the underlying value. What's left is 90% speculation and 10% criminality.