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Agent 488 · 06-12-2011, 10:32 AM

interesting analysis here:

http://www.hightechforum.org/bitcoin...eek-ponzi-sche

Exponentially Higher Benefits for Early Bitcoin Miners
There was another way to obtain bitcoins, but those days are long over. In the early days of bitcoins before they could be had for fractions of a penny, computer geeks with fast graphics processors designed for high end gaming could generate their own bitcoins through a process called “mining.” Since the pool of bitcoin miners were few in the beginning and they all had a statistically equal chance of gaining a bitcoin if they had equivalent computing hardware, it was relatively easy to generate bitcoins. So easy in fact that nearly 3 million bitcoins were generated in 2009 — 13% of the total number of bitcoins allowed. The number of people sharing those 3 million bitcoins were relatively few, because not many people (even hardcore computer and information technology geeks) read cryptography mailing lists.

So who were the folks that knew about bitcoins in 2009 and had the first crack at getting a significant fraction of those 3 million bitcoins? It was the cryptography geeks. More specifically, the developers who wrote the first bitcoin mining software probably paid themselves by having the first crack at generating bitcoins with almost no competition. It would also be no surprise if one of those developers were the actual person behind the fictitious character “Satoshi Nakamoto” (who actually may or may not be Japanese). I agree with those who bet that he or she is not Japanese, as assuming that identity would only make it harder for him or her to be tracked down.

Conveniently Anonymous
We can effectively think of “Satoshi Nakamoto” as being on top of a Ponzi scheme. But unlike physical world Ponzi schemes where the creators almost always end up in jail, the creator of bitcoins is anonymous and went out of his way to use anonymous email accounts through TOR networks to anonymously publish a whitepaper on bitcoins. The next wave of speculators who bought early into the bitcoin scheme and/or tried to generate their own bitcoins at a much slower pace (but still much higher than today) were the next tier in the scheme and they can probably walk away with some nice earnings if they pull out before the bubble bursts. At this late stage when the mainstream news is reporting on bitcoins, we have speculators trying to buy in at extremely high valuations hoping to sell to the “greater fool”.

06-12-2011, 10:32 AM
Agent 488 Registered User Industry Role: Join Date: Feb 2006 Posts: 22,511	interesting analysis here: http://www.hightechforum.org/bitcoin...eek-ponzi-sche Exponentially Higher Benefits for Early Bitcoin Miners There was another way to obtain bitcoins, but those days are long over. In the early days of bitcoins before they could be had for fractions of a penny, computer geeks with fast graphics processors designed for high end gaming could generate their own bitcoins through a process called “mining.” Since the pool of bitcoin miners were few in the beginning and they all had a statistically equal chance of gaining a bitcoin if they had equivalent computing hardware, it was relatively easy to generate bitcoins. So easy in fact that nearly 3 million bitcoins were generated in 2009 — 13% of the total number of bitcoins allowed. The number of people sharing those 3 million bitcoins were relatively few, because not many people (even hardcore computer and information technology geeks) read cryptography mailing lists. So who were the folks that knew about bitcoins in 2009 and had the first crack at getting a significant fraction of those 3 million bitcoins? It was the cryptography geeks. More specifically, the developers who wrote the first bitcoin mining software probably paid themselves by having the first crack at generating bitcoins with almost no competition. It would also be no surprise if one of those developers were the actual person behind the fictitious character “Satoshi Nakamoto” (who actually may or may not be Japanese). I agree with those who bet that he or she is not Japanese, as assuming that identity would only make it harder for him or her to be tracked down. Conveniently Anonymous We can effectively think of “Satoshi Nakamoto” as being on top of a Ponzi scheme. But unlike physical world Ponzi schemes where the creators almost always end up in jail, the creator of bitcoins is anonymous and went out of his way to use anonymous email accounts through TOR networks to anonymously publish a whitepaper on bitcoins. The next wave of speculators who bought early into the bitcoin scheme and/or tried to generate their own bitcoins at a much slower pace (but still much higher than today) were the next tier in the scheme and they can probably walk away with some nice earnings if they pull out before the bubble bursts. At this late stage when the mainstream news is reporting on bitcoins, we have speculators trying to buy in at extremely high valuations hoping to sell to the “greater fool”.