Yes, I know the definition of a Ponzi scheme, and yes, crypto isn't typical of such schemes -- but the underlying mechanism is the same. The "some sort of payout regularly" is not dividends but more like withdrawals or stock sales at "customer" chosen times [You could buy a "house or a car" with either withdrawals from Maddoff's con or by converting some of your Bitcoin to fiat]. You watch the daily price. As it goes up and up, other people get into the scheme; who doesn't want to invest in something going to the moon? And THAT is happening only because more and more people are getting on board; further, most new "customers" arrive looking for a future payout from the rising BC price. Will that continue indefinitely? Or will other factors increase Bitcoin's value? Possibly.
I don't see Bitcoin being widely used as a medium of [common] exchange right now, and for several reasons I don't expect to see that in the future either. What supports Bitcoin and other crypto? Bitcoin is just information; ones and zeros, the same bedrock as an .MP3 file. The promise of secure cryptography is intriguing but that not only assumes no easy way for others to decrypt but also assumes a connection to the internet and for that matter, a functioning internet [also, see links at bottom]. It also assumes enough people in the future willing to exchange something of value for the ones and zeros of Bitcoin (basically also true of fiat currency and anything else used as a store of value and a medium of exchange -- without people willing exchange something of value for X, then you've got nothing no matter how much X you have on hand).
With precious metals, the metal itself is highly useful in numerous industries (including many of today's high-tech industries) and has been used throughout the civilized world for thousands of years; a one-oz precious metal coin minted today and a one-ounce coin from 5,000 years ago have the same value (plus any collector value for the old coin). A person could outfit themselves with a nice set of clothing in ancient Rome for an ounce of metal and -- you can still do that today, despite precious metals no longer being used in our [corrupt fiat] currency system. On the other hand, there are plenty of downsides to physical money of whatever type, including metals. "Diversify" is almost always good advice.
The alleged security that underlies much of Bitcoin's appeal is less comprehensive, even aside from the coming quantum decryption issue [also regardless of a quantum ENcrypted version] than most believe:
https://www.wired.com/story/theres-no-good-reason-to-trust-blockchain-technology/
https://www.schneier.com/blog/archives/2021/09/i-am-not-satoshi-nakamoto.html
https://www.schneier.com/blog/about/
I didn't expect to make this reply so lengthy. Thanks for giving me a reason for writing it out.
Yes, I know the definition of a Ponzi scheme, and yes, crypto isn't typical of such schemes -- but the underlying mechanism is the same. The "some sort of payout regularly" is not dividends but more like withdrawals or stock sales at "customer" chosen times [You could buy a "house or a car" with either withdrawals from Maddoff's con or by converting some of your Bitcoin to fiat]. You watch the daily price. As it goes up and up, other people get into the scheme; who doesn't want to invest in something going to the moon? And THAT is happening only because more and more people are getting on board; further, most new "customers" arrive looking for a future payout from the rising BC price. Will that continue indefinitely? Or will other factors increase Bitcoin's value? Possibly.
I don't see Bitcoin being widely used as a medium of [common] exchange right now, and for several reasons I don't expect to see that in the future either. What supports Bitcoin and other crypto? Bitcoin is just information; ones and zeros, the same bedrock as an .MP3 file. The promise of secure cryptography is intriguing but that not only assumes no easy way for others to decrypt but also assumes a connection to the internet and for that matter, a functioning internet [also, see links at bottom]. It also assumes enough people in the future willing to exchange something of value for the ones and zeros of Bitcoin (basically also true of fiat currency and anything else used as a store of value and a medium of exchange -- without people willing exchange something of value for X, then you've got nothing no matter how much X you have on hand).
With precious metals, the metal itself is highly useful in numerous industries (including many of today's high-tech industries) and has been used throughout the civilized world for thousands of years; a one-oz precious metal coin minted today and a one-ounce coin from 5,000 years ago have the same value (plus any collector value for the old coin). A person could outfit themselves with a nice set of clothing in ancient Rome for an ounce of metal and -- you can still do that today, despite precious metals no longer being used in our [corrupt fiat] currency system. On the other hand, there are plenty of downsides to physical money of whatever type, including metals. "Diversify" is almost always good advice.
The alleged security that underlies much of Bitcoin's appeal is less comprehensive, even aside from the coming quantum decryption issue [also regardless of a quantum ENcrypted version] than most believe:
https://www.wired.com/story/theres-no-good-reason-to-trust-blockchain-technology/
https://www.schneier.com/blog/archives/2021/09/i-am-not-satoshi-nakamoto.html
https://www.schneier.com/blog/about/
I didn't expect to make this reply so lengthy. Thanks for giving the a reason for writing it out.