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China wants an orderly exit from Bitcoin mining

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21–30 of 94 posts

Re: China wants an orderly exit from Bitcoin mining

#21

Earlier quoted context omitted.

Can't agree more. Also I am getting pretty sick of the impact crypto trading is having on office conversations. All I hear these days are inane conversations about getting rich quick. Everyone is an expert in technical analysis these days. At best, trading these currencies is a zero-sum game where you take money from others without providing any intrinsic worth to humanity. At worst is a pyramid scheme plain and simp…

Naysayers would point out that trading increases liquidity which ostensibly increases the ability of a market to parlay information into value. But I'd be likely to agree with you. While blockchain technology /does/ have a future and will enable forms of socio-economic organization that were previously impossible, it's not there yet, and at the moment we're mostly passing tulips off to the greater fool.

> Naysayers would point out that trading increases liquidity which ostensibly increases the ability of a market to parlay information into value.

And increasing opioid supplies, increases the ability of the market to efficiently parlay money into an altered mental state. Doesn't mean it's a net positive for society.

The "liquidity" argument is such a terrible and simplistic justification for so many things.

Re: China wants an orderly exit from Bitcoin mining

#22

As to mining farms owned by smaller players, especially those in the mountainous areas of Sichuan and Yunnan provinces, simply locating the miners is a near impossible task. A growing number of private owners of hydropower plants in the two regions have begun to operate mining machines themselves as the price of bitcoin has surged, Du Jun, founder of Node Capital, a Beijing-based venture-capital firm focusing on the…

Miners find a block and distribute them to the P2P Bitcoin network. Blocks do not carry IP addresses, and everyone running a Bitcoin node contributes to sharing blocks, so you'd have a hard time finding out who is mining just from the IP.

If the Chinese miners are using a public mining pool, you may be able to see who is connected to the pool. If they're pool mining, they do not even have to run a Bitcoin node in the first place.

Re: China wants an orderly exit from Bitcoin mining

#23
post #17

Earlier quoted context omitted.

Could you clarify why those things are mutually exclusive? And to be clear: I don't know how to feel about Bitcoin and the attention it has received lately.

There's just nothing about the definition of a pyramid scheme that applies to Bitcoin, not even close. There's no organisation, recruiting, directors, membership or promise of payments. It doesn't have to grow forever. It's not illegal. The amount of ignorant Bitcoin comments on HN is just baffling.

It's a very uncharitable definition, sure.

There's no organisation, recruiting, directors, membership or promise of payments.

But those definitely exist, just not via any singular organization. There very much is organization and organizations, recruiting, would be directors, unofficial membership in the club of ownership, and lots of promises of payments.

When people make that comparison, what they're really saying is Bitcoin is mostly funny money which above all else has enriched early adopters and will probably lose a lot of late adopters lots of money. It's ceased to even be a useful currency.

You don't have to squint very hard to see the comparison, even if it isn't flattering or technically the same thing as a pyramid scheme. This is from your link:

In a pyramid scheme [Bitcoin], an organization compels individuals who wish to join to make a payment [purchase Bitcoin]. In exchange, the organization promises its new members a share of the money taken from every additional member that they recruit [to the moon]. The directors of the organization (those at the top of the pyramid) also receive a share of these payments. For the directors, the scheme is potentially lucrative—whether or not they do any work, the organization's membership has a strong incentive to continue recruiting and funneling money to the top of the pyramid.

Such organizations seldom involve sales of products or services with value. Without creating any goods or services, the only revenue streams for the scheme are recruiting more members or soliciting more money from current members. The behavior of pyramid schemes follows the mathematics concerning exponential growth quite closely. Each level of the pyramid is much larger than the one before it. For a pyramid scheme to make money for everyone who enrolls in it, it would have to expand indefinitely. This is not possible because the population of Earth is finite. When the scheme inevitably runs out of new recruits, lacking other sources of revenue, it collapses. Because in a geometric series, the biggest terms are at the end, most people will be in the lower levels of the pyramid (and indeed the bottom level is always the biggest single layer).

In a pyramid scheme, people in the upper layers typically profit while people in the lower layers typically lose money. Since at any given time, most of the members in the scheme are at the bottom, most participants in a pyramid scheme will not make any money. In particular, when the scheme collapses, most members will be in the bottom layers and thus will not have any opportunity to profit from the scheme, yet they will have paid to join the scheme. Therefore, a pyramid scheme is characterized by a few people (including the creators of the scheme) making large amounts of money, while most who join the scheme lose money. For this reason, they are considered scams.[2]

Sounds like many cryptocurrencies and Bitcoin is approaching that if it hasn't hit it already.

Re: China wants an orderly exit from Bitcoin mining

#24
post #6

Earlier quoted context omitted.

Agreed. Shutting down participation in the planet's largest pyramid scheme doesn't have a lot of downside.

Can't agree more. Also I am getting pretty sick of the impact crypto trading is having on office conversations. All I hear these days are inane conversations about getting rich quick. Everyone is an expert in technical analysis these days. At best, trading these currencies is a zero-sum game where you take money from others without providing any intrinsic worth to humanity. At worst is a pyramid scheme plain and simp…

I have no problem with valid criticism of cryptocurrency, and especially of its fanatics, but I’d be curious to hear you back up your claim that at best it’s a zero-sum game. That seems to me to be clearly incorrect.

Re: China wants an orderly exit from Bitcoin mining

#25
post #4

It's things like this that really make the west seem backwards. Did you know the average Chinese citizen has more representation in their government than the average US citizen cf. https://aeon.co/ideas/one-way-the-us-and-the-eu-are-less-dem... ?

Comparing China's National People's Congress to the US Congress is ludicrous. The NPC holds one annual session lasting less than 2 weeks, and passes legislations often with 99% Yeas. Every Chinese knows that the NPC is largely a show and holds no real power despite what the constitution says. Wikipedia summarizes it pretty well [1]: > In theory, the NPC is the highest organ of state power in China, and all four PRC c…

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Re: China wants an orderly exit from Bitcoin mining

#26
post #6

I am personally of the opinion that China swiftly killing off its cryptocurrency mining industry overnight would be to the great benefit of humanity. The sheer amount of electricity it wastes is an environmental disaster.

Agreed. Shutting down participation in the planet's largest pyramid scheme doesn't have a lot of downside.

I just feel sorry about all the people that lost or will lose money on it. It is our(techies) job to protect them, and we are failing miserably.

Re: China wants an orderly exit from Bitcoin mining

#27

Earlier quoted context omitted.

There's just nothing about the definition of a pyramid scheme that applies to Bitcoin, not even close. There's no organisation, recruiting, directors, membership or promise of payments. It doesn't have to grow forever. It's not illegal. The amount of ignorant Bitcoin comments on HN is just baffling.

It's a very uncharitable definition, sure. There's no organisation, recruiting, directors, membership or promise of payments. But those definitely exist, just not via any singular organization. There very much is organization and organizations, recruiting, would be directors, unofficial membership in the club of ownership, and lots of promises of payments. When people make that comparison, what they're really saying…

> In a pyramid scheme [Bitcoin], an organization compels individuals who wish to join to make a payment [purchase Bitcoin]. In exchange, the organization promises its new members a share of the money taken from every additional member that they recruit [to the moon].

There is no such thing. In that respect, Bitcoin is no different from real estate, stock or gold investors which do tend to sometimes promote their investment of choice. Pyramid scheme has a precise definition which does not fit Bitcoin at all and using it to describe Bitcoin is just misleading and intellectually dishonest. If it was a pyramid scheme, it would be deemed illegal in many, many countries. I agree with one thing however: as with every single investment ever, early adopters, which take on more risk, stand to profit more than late adopters.

Re: China wants an orderly exit from Bitcoin mining

#28
post #6

Earlier quoted context omitted.

Agreed. Shutting down participation in the planet's largest pyramid scheme doesn't have a lot of downside.

Here is what a pyramid scheme is: https://en.wikipedia.org/wiki/Pyramid_scheme Bitcoin is a distributed database that solves the "Two Generals Problem". Please don't spread misinformation on things you do not understand.

Sigh. The only sense in which it "solves" the Two Generals Problem is the sense in which it will, over the course of decades, create a rainbow table for it. None of the work being done is in any way socially useful (a crypto coin based on, say, folding proteins actually produces a social good and so could be equity based).

Decentralized proof of a transaction having occurred is in principle valuable, but the token itself is not the store of value. The reason it is accurately described as a pyramid scheme is because holding bitcoin for the purpose of reselling it is exactly like holding a baseball card, or a share in Bernie Madoff's hedge fund: it is based on the premise that someone will come along and pay you more for it than you paid, despite no actual appreciation in any fundamental value.

Re: China wants an orderly exit from Bitcoin mining

#29
post #17

Earlier quoted context omitted.

Could you clarify why those things are mutually exclusive? And to be clear: I don't know how to feel about Bitcoin and the attention it has received lately.

There's just nothing about the definition of a pyramid scheme that applies to Bitcoin, not even close. There's no organisation, recruiting, directors, membership or promise of payments. It doesn't have to grow forever. It's not illegal. The amount of ignorant Bitcoin comments on HN is just baffling.

The Bitcoin product is garbage, just like in a pyramid scheme. People buy in to Bitcoin so they can profit from the people who buy in later and not because there's a valuable product to invest in, just like a pyramid scheme. If Bitcoin was useful in commerce, it wouldn't be useless as it is now.

Re: China wants an orderly exit from Bitcoin mining

#30

Earlier quoted context omitted.

It's a very uncharitable definition, sure. There's no organisation, recruiting, directors, membership or promise of payments. But those definitely exist, just not via any singular organization. There very much is organization and organizations, recruiting, would be directors, unofficial membership in the club of ownership, and lots of promises of payments. When people make that comparison, what they're really saying…

> In a pyramid scheme [Bitcoin], an organization compels individuals who wish to join to make a payment [purchase Bitcoin]. In exchange, the organization promises its new members a share of the money taken from every additional member that they recruit [to the moon]. There is no such thing. In that respect, Bitcoin is no different from real estate, stock or gold investors which do tend to sometimes promote their inve…

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