The Indoor Enthusiast

It is really shocking how few people seem know what actually constitutes a Ponzi scheme. Lately journalists are throwing the word around to describe any type of isolated financial phenomenon which they do not trust, and mostly assuredly, do not understand. Why? Perhaps they are attempting to placate to readers who have recently been introduced to the term with the likes of recent high profiles cases such as Bernie Madoff and Zeek Rewards. Or maybe just to sensationalize what is really a more financially academic topic not fit for mainstream press. Either way, it is reason #139 why journalism today is embarrassing and shameful.

Take this recent article on Slate:
http://www.slate.com/articles/news_and_politics/view_from_chicago/2013/04/bitcoin_is_a_ponzi_scheme_the_internet_currency_will_collapse.html

Now the author obviously learned everything he knows about Bitcoin just a few hours before writing his article. Statements such as “Nakamoto must have realized this because there are not enough bitcoins to substitute for the currencies around the world. The currency can only succeed if it is expanded or supplemented.” reveal he was in a rush to publish something outside of his expertise. He fails to even realize that Bitcoins can be subdivided and transacted with up to 8 decimal places deep. So what do you do as a journalist when you know your thin content not will standup to even the slightest bit of scrutiny? Package it as a flash in the pan article with a provocative headline – “Fool’s Gold: Bitcoin is a Ponzi scheme.”