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Comment by base | Hacker News Reader

for pure curiosity... isn't bitcoin like a pyramid scheme? 25% of the money is with the early adopters and the first individuals have big amounts compared to people that came 1year after.

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I would think that early adopters must be given some incentive, otherwise such things would never get off the ground.

But they had to invest computational power into it, so their power bill went up, so it wasn't "free" for them.

Not necessarily. But it does seem that most the interest is oriented around speculation rather than actual usage and that this sort of behavior could create an unhealthy dynamic that turns it into a fiasco.

The same could be said of LLCs. Early investors can snag a large proportion of the total shares for a relatively cheap price.

Could you describe how that makes it like a pyramid scheme?

The return one gets is a function of elapsed time since bitcoin started with every newcomer getting ever-diminishing returns even if they expend the (Moore's law inflation adjusted) same amount of work. With pyramid schemes, the wealth of those who got in early is entirely supported by those who came in under them at a later date. It's not entirely analogous as later bitcoin adopters aren't kicking back value to the early adopters, but there are similarities in the end result: someone new to bitcoin in the year 2029 has no chance of catching up with those who were new in 2009 due to the fact that the total number of bitcoins has been mathematically limited to 21,000,000: http://www.bitcoin.org/faq#How_are_new_Bitcoins_created

But there's more money being created every day, for the next decade or so (I believe). Once Bitcoin drops off Hacker News, there's probably going to be inflation rather than deflation. But if bitcoin does take off and they get rich, well, good for them for spotting the next big thing!

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