[kgo]

An actual pyramid scheme involves you giving a cut of your profits to the person who signed you up, and getting a cut of profits from people you sign up. Nothing remotely like this happens with bitcoin.

Similarly it's not a Ponzi scheme because it doesn't involve the fraudulent transfer of new capital into fictional profits. Nothing remotely like this happens with bitcoin.

If we alter the definition of pyramid scheme so that Bitcoin qualifies, that definition would match every successful startup company.

[antiscam]

It's a kind of distributed Ponzi scheme that lacks the ordinary intent and centralized accounting associated with them.

It's different from startup in that a startup's shares increase in value, at least theoretically, on the likelihood of future dividends from the company. Startups can have bubbles or be Ponzi schemes too, but if they're indeed successful, they can earn money, and that money (or at least the bet that it will materialize) is a basis for sound investment by passive third parties who have capital.

Bitcoins increase in value only if you can sell them to future owners who are willing to pay more than you did. It's not quite a Ponzi scheme, but it has all of the important characteristics of one: old money is paid back from the new, and the value increases only on the hope that you can involve more new money.

[Andrew_Quentin]

And if there are less future owners who are willing to buy then it decreases in value.

You make it sound as if there is a set amount of buyers and transactions and the only way bitcoin can have value is if its price goes up which isn't the case.

As long as people are willing to accept bitcoins as having value then people are willing to buy it at a certain price. What that price is is determined by the market. It isn't necessary for bitcoin to either go up or go bust.

"old money is paid back from the new, and the value increases only on the hope that you can involve more new money."

Old money isn't necessarily paid back from the new. Money has already exchanged hand. Those that hold bitcoins hold a value of whatever the market considers worth. That may be 0, that may be 1m. That isn't any different from anything else. I.e. those who have dining tables hold such a value as the market is willing to pay.

And of course the value increases only if more people are willing to buy than sell i.e. involve more money.

What exactly is the ponzi part?

[antiscam]

I'm making no such assumptions; I don't think I'm making the argument you think I'm making.

As for "money has already exchanged hands," that can be true of any Ponzi scheme as well. When we talk of "old" and "new" money in a Ponzi investment scheme, we don't mean two literally segregated categories. You might have some old money and some new money at the same time.