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Estonia Bank: "Bitcoin Is A Ponzi Scheme"

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"bank-of-estoniaAlready is seems that the ceaseless hypocrisy and delusion of the banking system is attacking Bitcoin based upon ignorance, misinformation and self-interest.

This is especially ironic in that the entire global financial system is nothing more than one massive ponzi scheme, existing for the benefit of bankers, just waiting to implode - as it nearly did in 2008 - causing untold misery to billions of people. Bitcoin is not and can never be a ponzi scheme in and of itself due to its very nature.

 

To quote the Estonia central bank:

“All in all, virtual currency schemes are an innovation that deserves some caution, given the lack of any guarantees and responsible parties to back them in the longer term or evidence that this isn’t just a Ponzi scheme".

This quote shows just how little the banking system understands Bitcoin, while completely, and hypocritically disregarding the very nature of their own industry.

To begin with, what is the definition of a "ponzi scheme". Wiki provides us with this

"A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from existing capital or new capital paid by new investors, rather than from profit earned by the individual or organization running the operation. Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the high returns requires an ever-increasing flow of money from new investors to sustain the scheme"

It should be clear therefore that Bitcoin, in and of itself cannot be a ponzi scheme since it is by definition a "scheme", not a financial instrument in and of itself. 

Further, Bitcoin can never be a ponzi scheme due to the fact that, unlike fiat currencies such as the US Dollar, the total circulation and production is definitely self-regulating.

There are on the other hand numerous examples of why the banking and financial systems really are ponzi schemes, issuing unlimited amounts of currency, debt, derivatives and other financial instruments designed only to make bankers and their cohorts extremely rich at the expense of billions of innocent people.

The blatant manipulation of the precious metals is another example. The price of any commodity should be based upon actual supply and demand though a price discovery mechanism of the physical commodity. The prices of Gold and Silver are however grossly manipulated through futures exchanges, notably Comex, where the Gold and Silver prices are constantly driven down to a fraction of true value through the selling of paper - not real Gold and Silver - this is done through the banks using Dollars printed out of nothing by the Federal Reserve.

At the time of writing, every ounce of Gold at the Comex has been sold 112 times over - which is criminal since Comex cannot possibly ever satisfy the contracts people are taking out to purchase Gold or Silver. All this while physical demand for the real Gold and Silver metal is extremely high, with physical metal becoming increasingly scarce due to real demand, suggesting a price orders of magnitude higher. The Gold market will become interesting very soon as Comex almost certainly does not have the physical Gold to deliver against contracts standing for delivery this month - February 2014.

Bitcoin can expect many misleading misinformation about Bitcoin as it evolves, not based upon fact or genuine concern for people, but based upon self-preservation of a totally corrupt financial system that cares nothing about real people.  

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