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Bitcoin ≠ Ponzi Scheme
All existing cryptocurrencies are designed around a math problem that gets exponentially harder to solve as time goes on.
However, the number of “coins” you achieve for solving it is fixed irrespective of where on the curve you solve it.
This is a Ponzi scheme by definition, since the first people obtain a given reward for little effort yet later people must expend exponentially greater effort for the same reward, and the laws of mathematics say that eventually the reward cannot be had for any rational (or even possible) expenditure.
In a classic Ponzi scheme, the total reward is static so late adopters cannot be paid.
Denninger overlooks the fact that his “coin” does not have a fixed value: cryptocurrencies offer a dynamic, potentially unlimited, reward.
Buying an investment backed only by investors’ desire to get rich is still a bad idea.
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