On 13/06/11 5:54 PM, Adam Back wrote:
Bitcoin is not a pyramid scheme, and doesnt have to have the collapse and late joiner losers. If bitcoin does not lose favor - ie the user base grows and then maintains size of user base in the long term, then no one loses.
Um, Adam, that's the very definition of a pyramid scheme :) No-one need lose as long as the size of the user base grows, long term! So everyone is incentivised to bring in new victims^H^H^H^H^H^H users :P That's why they're illegal, typically.
I think in the current phase the deflation (currency increasing in value) helps increase interest and number of users.
Um, yeah, whatever. Look, whatever you do, don't tell anyone of your friends or family to invest in it.
Say that in the next phase bitcoin stops rapid expansion and reaches some stable number of users, the deflationary period stops, and the remaining users use it for transactions only (not speculation). I dont see the losers in that scenario.
No, but the scenario is incomplete: Those speculating on an increase in value will realise it has reached stability. So they'll sell. Which will cause a reduction in value. Which will cause a run, as those that didn't understand the mechanics of a pyramid scheme get their rude lesson.
However. Unless the laws of financial conservation have been repealed by the design, those who follow have to invest a lot and come out with less...
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