There are some valid points in this video:
http://www.youtube.com/watch?v=0UKC7iaBKvs
How come there were 6 million BTCs already in existence when the project started? Who owns them? That's now the equivalent of almost 1 billion $.
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2Welcome to Bitcoin.SE. Bitcoin certainly did not have 6 million premined coins. I'm not sure what you're talking about or what you're asking; can you clarify?– BinaryMageApr 5, 2013 at 17:01
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2watch the video, the guy says that when bitcoin went to the public, there were already 6 million coins on the market. And why r u downvoting me? Please, if you're a bitcoin fanatic just ignore this Q. I'm looking for objective answers– MellaApr 5, 2013 at 17:03
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2Voting is a StackExchange decentralized regulation method. We're down-voting because we think this isn't a useful question, not because we don't like you.– BinaryMageApr 5, 2013 at 17:09
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2possible duplicate of Is Bitcoin a scam?– Nick ODellApr 5, 2013 at 17:16
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3We get this question all the time, and most of us are pretty tired of it. bitcoin.stackexchange.com/q/32/2306 bitcoin.stackexchange.com/q/9033/2306– Nick ODellApr 5, 2013 at 17:16
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1 Answer
There were only about 2 million Bitcoins mined when the system was fully announced and opened to the public. They are owned by Satoshi and other early adopters. While they have a huge present value, that's because their value increased.
Long after the Bitcoin system was public, Bitcoins dropped down to $2. At that time, the value of the early adopters Bitcoins was around $4 million at most. Their position increased in value the same way non-early adopters who bought Bitcoins found their positions go up in value.
If not for early adopters, there would be no Bitcoin today. The currency needed to be bootstrapped by people who mined it (to secure its transactions) and promoted it. Bitcoin is what it is today because they took risks.
As for whether or not Bitcoin is a Ponzi scheme, that completely depends on whether you think it's reasonable to believe that Bitcoin's usefulness as a payment method will eventually bring in real value. If you don't, then the only way people who buy Bitcoins can profit is from other people buying those Bitcoins from them for more money with no real value being added, which is the crux of a Ponzi scheme.
My opinion is that the belief that Bitcoin will add real value as a payment method is reasonable and thus Bitcoin is not a Ponzi scheme. Bitcoin's irreversible, pseudonymous transactions that can take place across the world as easily as across a street have the potential to add significant value to the world economy. Those who hold Bitcoins may reasonably expect to be investing in a share of that added value. Anything that has a realistic chance of adding significant value cannot be a Ponzi scheme.
Pretty much all of the characteristics of Bitcoin that you mention are shared by many successful businesses. People who bought Apple stock early made a lot of money. The founders got lots of Apple stock without having to pay for it because they created it. Risk was rewarded. And so on.
answered Apr 5, 2013 at 17:17
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I guess you're right, but still 2 million is quite a lot. It's like 20% of the economy... Sounds kind of fishy. And why didn't the creator made the 21M coins available initially? Like distribute them evenly for each IP address like the guy in the video says?– MellaApr 5, 2013 at 18:13
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4@Mella: I could rebut each of those arguments, but there's really no point. They're throw away arguments. As you go through the painstaking process of rebutting each one, the people half-heartedly advancing them just make 100 new ones that they also don't really believe. If you pick one argument that you research and come to fully believe, feel free to ask about it as a new question and I promise I will do my best to rebut it to your satisfaction. Apr 5, 2013 at 18:58