Go on then: it pays out a lot to early "investors". It can only maintain this rate of return as long as adoption is increasing. Why is it not a Ponzi scheme?
Because the value of this currency does not come from the ponzi effect, nor will it disappear as it wears off. We'll see less investors, less risk takers, but the purpose it serves will be sustained and even improve as it stabilizes.
Once the situation settles, the risk takers will move on to the next thing, because that's what they like to do. But they aren't going to leave a dead ponzi behind.
Why don't we just agree that it is legitimate to call it a scam (leaving the question of whether it is a scam out of the issue). I know that this is devolving into a semantic argument, but it clearly isn't a Ponzi scheme, as a particular type of scam.
A Ponzi scheme is an investment that represents account balances that are satisfied from a cash pool that only grows from new investors, and provides fictitious returns on the balances.
This really is quite a simple scheme, but alarmingly effective, because as long as people trust that the account balance is legitimate, and the returns are good, people will not exit the scheme. Sometimes, as (apparently) in Mr. Ponzi's case, this emerges not through an attempt to steal money, but in an attempt to buy time to recover from trading losses.
Do we disagree on the definition of Ponzi scheme here? If we agree on the definition, then I don't see any way that you can claim bitcoin/dogecoin/litecoin is a Ponzi scheme -- there are no account balances (in anything but the coin itself), there's no promised return, there's no cash fund that is satisfying investors making exits (unless there's a massive conspiracy of exchanges).
Maybe you can switch to comparing cryptocurrencies to pump-and-dump schemes? Or just call it a scam, an attempt by the creators to create wealth out of thin air by preying on the gullibility of libertarians.
You're right that there's no explicit account balance. Words are imperfect; ultimately bitcoin is a new type of scam. But I want a term that emphasises the disproportionate returns given to the early "investors" - an ordinary stock pump-and-dump doesn't have bitcoin's built-in deflation. I think a Ponzi scheme is the closest fit.
Just like art is art first, or an antique chair is a chair first. The investment or any of these can be described as a ponzi scheme by the above criteria. The first few buyers of a chair make money, it only works is people are still interested in buying the chair...
