> First, few if any gold investors have expectations of profits. They generally invest in gold as a hedge -- a "store of value" -- that they hope will retain its value in case other assets go sour.
Lol. Bitcoin is exactly comparable to gold. Plenty of people buy gold expecting it to appreciate...because other people use it as a hedge. Even if it were true originally that Gold's only purpose was as a hedge (protip: it's not), its very utility as a hedge would make it useful as a source of alpha for those wanting to bet on the demand for hedges.
This article is just stupid and pointless. It's attempting to take a label that has a strong negative valence, deconstruct its attributes and apply them to something else, and then port that valence over to the new thing. The negative valence ascribed to "ponzi scheme" is because it is a scam intended to defraud its investors. A ponzi scheme that is not an attempt to defraud its investors, even if it fits some "technical" description of a ponzi scheme, does not deserve to have the valence of "ponzi scheme" assigned to it.
I certainly don't believe Bitcoin meets the technical definition of a Ponzi scheme. But even if it did, this article would still be a stupid and pointless attempt at valence hijacking. An activity that the world already has far too much of.
> Plenty of people buy gold expecting it to appreciate...because other people use it as a hedge.
Long run? I think not. Gold hasn’t really risen over millenia, just stayed in a certain band.
Buffett made a good argument that you could either buy a giant gold cube and fondle it, or a large number of productive assets in the states and collect the revenues. He’d bet on the assets being worth more over the decades, and over the long run he was right.
Bitcoin proponents expect bitcoin to soar long run, unlike gold, which doesn’t.
> Long run? I think not. Gold hasn’t really risen over millenia, just stayed in a certain band.
I said they expected it, not that it did. I know plenty of people who buy gold expecting it to appreciate. Whether or not it does appreciate is irrelevant.
> Buffett made a good argument that you could either buy a giant gold cube and fondle it, or a large number of productive assets in the states and collect the revenues. He’d bet on the assets being worth more over the decades, and over the long run he was right.
No he wasn't. If you invested all your money in the medieval equivalent of an index fund, it'd be worth far less today than if you had invested in gold. You can't just cherry pick the last century.
> No he wasn't. If you invested all your money in the medieval equivalent of an index fund, it'd be worth far less today than if you had invested in gold. You can't just cherry pick the last century.
This isn’t true. Gold has about kept the same value, adjusted for inflation.
The economy grew enormously since medieval times. Anyone managing to keep reinvesting since then would be enormously rich.
> This isn’t true. Gold has about kept the same value, adjusted for inflation.
Yes, and how is the equity in your local shoemaker or blacksmith doing?
> The economy grew enormously since medieval times. Anyone managing to keep reinvesting since then would be enormously rich.
By "keep reinvesting" do you mean "always correctly escaping the industries that died into the ones that kept growing all the way up to the present"? Because if so, you're right. But that's not a particularly good way to think about how returns compound.
> You said the medieval equivalent of an index fund, which tracks the economy. The economy grew faster than gold.
Yes, but they still own shares in specific companies. Investing in an index fund is not the same thing as investing in GDP.
> Obviously there was no index fund, but no one in medieval times tried to get rich by buying gold and sitting on it. They used other methods.
The point is that simply maintaining your wealth from pre-modern times to the present would be an incredible feat, that someone who simply hoarded gold would have achieved.
Bitcoin isn't really a scheme either. Its creator does not access or use his coins, and may no longer even have access to them. If this was a get rich quick scheme for him, it sure doesn't seem like he's making much use of his success.
Anyways, i'm sure there was a first person to discover gold. And i'm sure that person had the most gold when the discovery was made. That doesn't really have much bearing on whether gold is a ponzi scheme, though.
Lol. Bitcoin is exactly comparable to gold. Plenty of people buy gold expecting it to appreciate...because other people use it as a hedge. Even if it were true originally that Gold's only purpose was as a hedge (protip: it's not), its very utility as a hedge would make it useful as a source of alpha for those wanting to bet on the demand for hedges.
This article is just stupid and pointless. It's attempting to take a label that has a strong negative valence, deconstruct its attributes and apply them to something else, and then port that valence over to the new thing. The negative valence ascribed to "ponzi scheme" is because it is a scam intended to defraud its investors. A ponzi scheme that is not an attempt to defraud its investors, even if it fits some "technical" description of a ponzi scheme, does not deserve to have the valence of "ponzi scheme" assigned to it.
I certainly don't believe Bitcoin meets the technical definition of a Ponzi scheme. But even if it did, this article would still be a stupid and pointless attempt at valence hijacking. An activity that the world already has far too much of.