Re:Bitcoin is a Ponzi
by graeme on Thursday October 07, 2021 @07:26PM
(#28793468)
The bulk of miner income is mining new bitcoins. And the money received from that goes to burning energy mostly.
So if someone new buys a miner btc at $54,000 today, that represents money paying for coal that was burnt. It isn’t profits and the money is gone. Effectively you are transforming $54,000 into burnt coal and a bitcoin.
Eg:
1. Miner expects $54,000 bitcoin sale. Takes $53,000 loan, buys coal, burns it. Gets bitcoin
2. Received $54,000, gives 1 BTC. Pays back loan
If you ask for your $54,000 back, it isn’t there. It’s gone.
(I know mining doesn’t work so precisely but that’s just a thought experiment to illustrate the dynamic)
So if someone new buys a miner btc at $54,000 today, that represents money paying for coal that was burnt. It isn’t profits and the money is gone. Effectively you are transforming $54,000 into burnt coal and a bitcoin.
Eg:
1. Miner expects $54,000 bitcoin sale. Takes $53,000 loan, buys coal, burns it. Gets bitcoin
2. Received $54,000, gives 1 BTC. Pays back loan
If you ask for your $54,000 back, it isn’t there. It’s gone.
(I know mining doesn’t work so precisely but that’s just a thought experiment to illustrate the dynamic)