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Bernie Madoff has died

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Re: Bernie Madoff has died

#61

Post by tim333 »

soneca wrote: post #33

Madoff made his ponzi scheme last 17 years with a limited network. Imagine how long a ponzi scheme accessible by the whole world could last. Possibly forever (or at least longer than my lifetime). I am thinking about Bitcoin here.

Bitcoin isn't really a ponzi scheme though, just an asset that gets bid up. In a ponzi you pay in x and are promised x+50% or some such and the scheme fails when there isn't money to pay out x+50%. With bitcoin you buy for price x and sell for price y which may be higher or lower. Different thing. It can't fail, just go up or down in price.

Re: Bernie Madoff has died

#62

Post by yummypaint »

soneca wrote: post #33

Madoff made his ponzi scheme last 17 years with a limited network. Imagine how long a ponzi scheme accessible by the whole world could last. Possibly forever (or at least longer than my lifetime). I am thinking about Bitcoin here.

The nature of ponzi schemes necessitate exponential growth, even if the doubling time can be made long, perhaps on the scale of years. This places a short bound on how long they can last. The US has about 1/20th of the worlds population, so that's less than 5 doubling periods before you run out of new marks. Maybe an additional decade or two at best?

Re: Bernie Madoff has died

#64

Post by mumblemumble »

user-the-name wrote: post #60
mumblemumble wrote: post #52

Earlier quoted context omitted.

That is something that applies to all sorts of situations, and is in no way a litmus test for whether or not something is a Ponzi scheme. For it to be a Ponzi scheme, you first have to have some sort of centralized control of the ledger so that you can lie to people about the volume of assets they have in your care. And already we have made a complete departure from what Bitcoin is and how it works.

But there is a lie. The lie is the supposed value in USD of the bitcoins you hold.

Like I said up above, even if, for the sake of argument, it were subject to market manipulation, that would still not make it a Ponzi scheme. Not every financial crime is a Ponzi scheme.

Re: Bernie Madoff has died

#65

Post by danielbarla »

lotsofpulp wrote: post #55
Icathian wrote: post #40

Earlier quoted context omitted.

Okay, but the value of gold has basically zero relationship to it's industrial or commercial uses, so that isn't really relevant here.

There could be some value attributed to being able to use gold as a store of value and currency in the event of a dissolution of modern society such that the internet or widespread electricity is no longer around.

Sure, but this is based on the idea that the innate uses and value of gold would be similar (or "relatively high") after such a transformation of the world. This is not clear to me at all, compared to say, a similar wealth invested into a large cache of firearms and ammo. Or whatever will happen to be useful, depending on the scenario.

It reminds me of an anecdote from my grandfather from the end of WW2, people were giving away gold rings for loaves of bread. (Clearly, only when in desperate need, but it did happen.)

Re: Bernie Madoff has died

#66

Post by obmelvin »

finikytou wrote: post #56
obmelvin wrote: post #46

Earlier quoted context omitted.

Oh, please. Madoff ruined plenty of "normal" people's life savings. Say what you will about other bankers, but please don't try to elevate someone who destroyed the life savings of others. EDIT: Yes, non-profits and pension funds as well. That's not taking from the rich. Madoff was not Robin Hood.

no he did not. 75% of what he robbed was recovered also. Wouldnt call it ruining life... if he did steal to "normal people" that is to a much smaller percentage than he robbed the rich ones. thousands of people that are still in wall street today robbed poor people and are still trading/working in the industry today. While I am not elevating him I am elevating the fact that he rot in jail for robbing the rich. Just l…

So, it's ok to steal from people as long as most of them are rich?

And, it's ok to steal as long as you only steal 25% of it?

Re: Bernie Madoff has died

#67

Post by kingsuper20 »

finikytou wrote: post #43
cletus wrote: post #30

Here's the one lesson I really want us to all learn from this: the only thing the rich fear is prison because prison robs them of time. Fines are just the cost of doing business. There are many other scandals: the whole subprime disaster, pollution from plants and the like where no one went to prison and people really should've.

that is not the number one learning and I think you are wrong. The real powerful and rich do not fear jail. They fear people like madoff that targets them. That is why Madoff ended his life in jail while banks/funds CEO in the 2008 are now richer than ever stealing money from the poors and taking 0 accountability for the subprime crisis that destroyed a whole decade. In my book he was better than any of those bankers…

"That is why Madoff ended his life in jail"

That's an interesting point and probably true. The identity of your victim matters as much as the crime. It isn't like a serial car thief would receive the same sentence.

I've always wondered if jail was appropriate for purely financial crimes. Maybe simply pauperizing people is the right answer and keep them pauperized from some time.

Just imagine a prison system that doesn't contain financial criminals or drug cases. Transfer a certain amount of punishment to Singapore-style caning (probably a better mind-modifier than 6 months in the county clink) and you could shrink the whole industry to a tiny fraction of it's current size.

Re: Bernie Madoff has died

#68

Post by toomuchtodo »

finikytou wrote: post #56
obmelvin wrote: post #46

Earlier quoted context omitted.

Oh, please. Madoff ruined plenty of "normal" people's life savings. Say what you will about other bankers, but please don't try to elevate someone who destroyed the life savings of others. EDIT: Yes, non-profits and pension funds as well. That's not taking from the rich. Madoff was not Robin Hood.

no he did not. 75% of what he robbed was recovered also. Wouldnt call it ruining life... if he did steal to "normal people" that is to a much smaller percentage than he robbed the rich ones. thousands of people that are still in wall street today robbed poor people and are still trading/working in the industry today. While I am not elevating him I am elevating the fact that he rot in jail for robbing the rich. Just l…

https://www.npr.org/2018/12/23/678238031/for-madoff-victims-... (NPR: For Madoff Victims, Scars Remain 10 Years Later)

Re: Bernie Madoff has died

#69

Post by dilippkumar »

xutopia wrote: post #35
soneca wrote: post #33

Madoff made his ponzi scheme last 17 years with a limited network. Imagine how long a ponzi scheme accessible by the whole world could last. Possibly forever (or at least longer than my lifetime). I am thinking about Bitcoin here.

Why is Bitcoin different than gold though? Is gold also a Ponzi scheme?

Not GP, here is my thesis.

Right now, on coinbase, rate of bitcoin purchases paid in dollars > rate of dollars purchased in bitcoin. Anyone who wants to exit bitcoin today is getting dollars from people buying into bitcoin.

When this changes (for whatever reason), coinbase and other exchanges have a limited capacity to buy back bitcoins for dollars, assuming they would even want to do that in the middle of a run on crypto exchanges.

If bitcoin was a viable currency, then people buying bitcoin today would never want to trade it back for dollars. But that’s not happening- everyone still buys groceries, coffee, gas, tools and computer software with dollars. A run on coinbase is a problem when bitcoin is an “investment” and not an actively used currency.

Finally, Monero has shown that there is still plenty of room for innovation beyond what bitcoin currently implements. If crypto currencies are the future, already Monero looks like a more viable option than btc (note that all the illegal stuff that used to happen with btc is now happening with xmr on the dark web). It’s very possible that even Monero isn’t the final incarnation of the ultimate crypto currency and something even better will replace it one day.

A new crypto doesn’t threaten people who want to transact with that currency. Everyone on the darkweb markets switched from btc to xmr and business continues as usual, and it will continue even when the next evolution arrives. But those who see it as a store of value are at the mercy of everyone else buying that currency more than how much everyone else is selling- a classic ponzi scheme.

Re: Bernie Madoff has died

#70

Post by MereInterest »

_ea1k wrote: post #45
soneca wrote: post #33

Madoff made his ponzi scheme last 17 years with a limited network. Imagine how long a ponzi scheme accessible by the whole world could last. Possibly forever (or at least longer than my lifetime). I am thinking about Bitcoin here.

I'm not sure that I see how it could be a ponzi scheme. Ultimately, everyone has as many bitcoins as they believe that they have. The only question is how valuable are those coins? That should always be a function of market demand.

Money goes in, with the promise that you will get more money out at the end. While this works in some cases (e.g. investing in a business that produces value), in this case the only other money in the system comes from other people buying into it. Therefore, I believe bitcoin to be equivalent to a ponzi scheme.

Implicit in this is the assumption that bitcoin does not provide value in itself, which is another discussion altogether.

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