The Nakamoto Scheme is an automated hybrid of a Ponzi scheme and a pyramid scheme which has, from the perspective of operating a criminal enterprise, the strengths of both and (currently) the weaknesses of neither.Byrne made no suggestion that the fraudulent aspects were intentional, and in riffing on Byrne's post David Gerard amplified the point:
The Nakamoto Scheme draws strength from the same things which make pyramids and Ponzis so compelling, in that it promises insane investment returns, can be accessed by the man on the street with almost no effort at all, and recruits individual participants as new, self-interested evangelists of the scheme.
The problem with calling Bitcoin a “Ponzi scheme” or “pyramid scheme” is that a Ponzi conventionally has a mastermind at the top, making the money.Now, in THE STRANGE CASE OF NAKAMOTO'S BITCOIN - PART 1, Sal Bayat repeats Byrne's analysis in much greater detail but does suggest that Nakamoto intended the fraud. Below the fold I critique Bayat's post
Bitcoin doesn’t have that. (And Bitcoiners are very big on this as a reason not to call it a “Ponzi”!) Satoshi Nakamoto appears to have been completely sincere in setting up Bitcoin.
Even given Nakamoto’s extensively documented political aims for Bitcoin — an anarcho-capitalist reimplementation of the gold standard, with banker conspiracies along for the ride — he was disconcerted at just how rabid the fans got about the possibility of profit. He even asked them to hold off on video card mining because it would spoil things for getting everyone involved.