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Bitscam And Other Extraordinary Insanities

Wednesday, December 6, 2017 12:01
% of readers think this story is Fact. Add your two cents. / by Karl Denninger / 2017-12-06 

If you’re too short in attention span to listen to my interview from Monday I guess I can lay it out in text for you.

Not that anyone will read more than the first two sentences that’s in the first category…..

Any scheme that shares the following single essential element is a ponzi scheme whether recognized formally in the law at any given moment or not.

That is, the first people who perform some action get a given reward.  The scheme is designed, intentionally, so that the amount of effort for that same unit of reward rises, usually exponentially.  In addition it is usually the case (but not required) that the original effort’s starting point is extremely small relative to the reward.

Let me remind you of the mathematical facts surrounding two exponential curves where one exponent is larger than the other.  I will use an extreme example; a “spend” in effort that starts at $1 and goes up at 5% for each iteration and a fixed reward of $100.

If you’re one of the first to participate this sounds great!  You spend $1 worth of effort and get $100 in reward.  This scheme is an illegal Ponzi scheme because by the time the 100th iteration takes place each further iteration must produce an inevitable — and ever-larger from that point forward — loss.


The post Bitscam And Other Extraordinary Insanities appeared first on Silver For The People.


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