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User Info Tickerguy on F.A.C.E.....; entered at 2017-12-06 09:53:36
Posts: 150661
Registered: 2007-06-26

All Ponzi schemes have the same basic structure as I outlined in the interview; that's why they're called Ponzi schemes and why the mathematics make them a fraud.

Whether they survive for a long time or not doesn't change any of that.

Any scheme that gives all persons who take an action a "reward", yet the action increases in cost on an exponential basis as each "reward" is earned, is a ponzi scheme. The reason for that is the FACT that eventually the effort must exceed the value of the reward, at which point the next person to attempt it CANNOT expend effort for a positive return. This is not a matter of psychology, it's a matter of mathematical FACT. In addition the first participants earn "reward" for other people's attempts to earn said identical reward yet they have done exactly NOTHING for those additional "earnings" AND they are wildly out-of-proportion (exponentially so!) to their ORIGINAL effort and value of reward.

Ponzi schemes are illegal due to the mathematical certainty of these relationships but whether the law recognizes them at any given point in time doesn't change their character. Many such schemes go on for years or even DECADES before being recognized, and some escape legal sanction even though they clearly meet the definition of same.

Cryptocurrencies are cleverly designed to funnel your work to the founders of same, while giving you a pittance of that which the founders receive. Of note, and distinct from a founder of a real, legitimate business the founders do exactly nothing after launching said "coin" to obtain that additional value; they steal it from further participants, and the scheme is designed to operate this way.

This doesn't mean "blockchain" doesn't have use -- it means that what has been built on it thus far is, in every example, a scam.
2017-12-06 09:53:36