Bitcoin is a Ponzi • Hacker News Board

Re: Bitcoin is a Ponzi

#431

Post by newswasboring » Thu, Oct 07, 2021, 5:52 AM UTC

lalaland1125 wrote: post #275

newswasboring wrote: post #266

Earlier quoted context omitted.

> The average transaction fee during slow periods is about $5 and it jumps to $20 whenever there is load on the network. When people say this, do they mean $5/$20 per bitcoin or per any transaction whatever size?

That is the average fee across all transactions. Transaction fees are per kb of data so more complex transactions pay more. The amount transfered is irrelevant.

I'm sorry if I appear a bit dense, but this is the part of bitcoin I least understand. On an individual level, when transferring person to person, are the transactions ever more complex than just remove funds from here and add it to another wallet?

Re: Bitcoin is a Ponzi

#432

Post by arcticbull » Thu, Oct 07, 2021, 5:52 AM UTC

hackingforfun wrote: post #411

arcticbull wrote: post #343

Earlier quoted context omitted.

There's great reasons not to. Unless we nip this in the bud, we face a potential repeat of the 1997 Albanian Ponzi crisis that brought about the total collapse of their economy. Everyone in Albania jumped in and started participating in a number of big Ponzi schemes. Their finance minister tried to stop them, so they threw him in jail. They then had a civil war about it, and the IMF had to drop in big bags of money.…

There is no nipping this in the bud. That's the point. It's already too late.

I reject that thesis given the Chinese sure managed, in like a week. No Bitcoin in North Korea either. The longer we wait, the more painful it'll be.

Re: Bitcoin is a Ponzi

#433

Post by pa7ch » Thu, Oct 07, 2021, 5:52 AM UTC

G3rn0ti wrote: post #289

In a Ponzi scheme, a fraudulent perpetrator takes your money (and the money of many others), gives some of that to early dropouts but takes the rest for himself . Ponzi schemers profit from lying to you where your money goes. With a decentralized digital asset there is no sole person or company that profits from just lying to you about where your Dollar goes in exchange for digitals. Sure, miners and exchanges make p…

Its a ponzi because of how exchanges work. The exchange takes your money, gives it to some of the early dropouts. When you sell for a loss, you've been lied to about the utility of bitcoin.

You likely never used bitcoin for any of the many advertised functions. You held it, and sold for a loss. Some will win, more will lose. Its a concentration of wealth with a little more class chaos than normal because it's accessible to a more diverse crowd. It still ultimately fails to incentivize useful work to society and it's still going to cause wealth to concentrate in the wrong direction.

Re: Bitcoin is a Ponzi

#434

Post by matheusmoreira » Thu, Oct 07, 2021, 5:52 AM UTC

glenvdb wrote: post #51

A lot of the "Common Objections" relate to the REASONS people choose to own Bitcoin and how those cases make it a Ponzi. There are many different reasons to own Bitcoin, however the author seems to only view it through the lens of someone living in a wealthy and developed country with financial stability. The properties of it being difficult/impossible to confiscate and its privacy make it valuable in oppressive regi…

Bitcoin is not private. It's probably even easier to trace than traditional bank accounts. There are better projects focused on privacy. Monero, for example.

Re: Bitcoin is a Ponzi

#435

Post by naruvimama » Thu, Oct 07, 2021, 5:53 AM UTC

graeme wrote: post #410

G3rn0ti wrote: post #289

In a Ponzi scheme, a fraudulent perpetrator takes your money (and the money of many others), gives some of that to early dropouts but takes the rest for himself . Ponzi schemers profit from lying to you where your money goes. With a decentralized digital asset there is no sole person or company that profits from just lying to you about where your Dollar goes in exchange for digitals. Sure, miners and exchanges make p…

> They do not pretend making your money work for you by some magical scheme. No. They instead take your money, buy coal, and burn it. Nothing is left. As you say, Ponzi schemers take money for themselves and keep it. Most of what Madoff stole was recovered, for instance. Whereas virtually 100% of all money invested into crypto has been burned by miners. This is pretty easy to model. So there’s nothing left to recover…

Where people choose to throw their own money should be left to them.

However, I wish governments would ban regulated institutions from throwing peoples real money into non-governmental/undemocratic cryptocurrency.

If banks/govts want to get in on the action, they should perhaps start their own cryptocurrency/blockchain.

Re: Bitcoin is a Ponzi

#436

Post by DeathArrow » Thu, Oct 07, 2021, 5:53 AM UTC

It doesn't matter if it's a Ponzi or not. Cryptocurrencies will live as long as people put trust in them. The same as the currency of country X, stocks of company Y and works of artist Z.

The question is: how long is the public going to place trust in cryptocurrencies?

Re: Bitcoin is a Ponzi

#437

Post by sb057 » Thu, Oct 07, 2021, 5:53 AM UTC

chowchowchow wrote: post #368

sb057 wrote: post #226

Earlier quoted context omitted.

Roughly 50% of gold's demand comes from private investors and central banks, with another 40% of demand being driven by (para-investment) jewelry. https://www.gold.org/goldhub/data/gold-supply-and-demand-sta...

Seems to fluctuate quarterly and I was saying the article addresses the point and makes an argument that BTC is not “like gold” in this way because the majority of demand for gold comes from non-investors (which appears to be the case in I think most quarters but perhaps not most recently). Jewelry is its own category but it does have “utility” if viewed through the lens of human behavior across civilizations over ti…

>the majority of demand for gold comes from non-investors (which appears to be the case in I think most quarters but perhaps not most recently)

There's actually been far more industrial usage proportionally recently than any prior year. Prior to 2020, the highest industrial usage year was 2016, at ~7%. The article is wrong; the VAST majority of the demand for gold does indeed come from investors. This is ignoring gold's historical status, of course. Before the advent of modern computing, there was extraordinarily little "practical" use for gold beyond use as tooth fillings. And yet, it is during this time that gold was most coveted. Why is this? Economists have been debating that for a century! :o)

>Jewelry is its own category but it does have “utility” if viewed through the lens of human behavior across civilizations over time.

Jewelry does have utility yes, but gold jewelry has no marginal utility over, say, brass jewelry, other than the material composition. And yet, gold jewelry commands a far higher price, and despite even this, it is still in higher demand. This is because buyers place a premium on the metal itself, hence why I referred to it as a para-investment.

Re: Bitcoin is a Ponzi

#438

Post by rank0 » Thu, Oct 07, 2021, 5:54 AM UTC

People in the crypto debate have very short memories. BTC is up like 1000% in the past 18 months and everyone is so quick to point at the current price declaring that "crypto is here to stay!" I mean christ in what world is 18 months long enough to declare that crypto is eating the world?

It's clear as day from my perspective that everyone is jumping on the speculative mania bandwagon. It used to have some utility in facilitating cheap illicit transactions, but those days are long gone.

For the record I believe that enabling criminal activity is REAL utility, whether one agrees with the moral implications or not.

Almost nobody is using bitcoin as a currency. It's all speculative investment. This is coming from someone who has made quite a bit of money off crypto and has actually used it countless times as a currency to buy physical goods.

To those of you pointing out that other markets like equities are also detached from reality, I agree with you and don't think it means bitcoin is any less bullshit. At least ETH has some utility as gas for distributed applications.

Re: Bitcoin is a Ponzi

#439

Post by tigertigertiger » Thu, Oct 07, 2021, 5:54 AM UTC

bb88 wrote: post #155

imsd wrote: post #112

Earlier quoted context omitted.

I'm not sure I understand. You could denominate ETH in dollars, yen, euros, gold, or any other form of money/currency. Although USD might be your preferred, many would happily sell a vehicle for compensation in BTC, ETH, silver, gold, euros, etc.

Well... I wouldn't, nor would 95% of the US. I want to be paid in stable currency backed by the full faith and force of the US Government. "Oh shit, the internet went out. Hope the value of my ETH doesn't crash through the floor while the internet is down...."

Yeah I can't keep track about the weekly times the whole internet went down. Probably a couple of times a week

Re: Bitcoin is a Ponzi

#440

Post by ogogmad » Thu, Oct 07, 2021, 5:55 AM UTC

louloulou wrote: post #407

lalaland1125 wrote: post #249

Earlier quoted context omitted.

The fees for Bitcoin are way too high to make sense for citizens in poor authoritarian counties. The average transaction fee during slow periods is about $5 and it jumps to $20 whenever there is load on the network. And the lightning network is a poor solution to this because the LN requires a lot of capital to fund channels, something poor people explicitly don't have. Finally, the fact that Bitcoin proponents have…

Inflation protection for long-term savings is a huge use case.

When people stop buying the latest and greatest machines for Bitcoin mining, Bitcoin's price will crash to zero. It will trigger double-spending attacks, which will undermine trust in the network. Gold doesn't have this problem; so gold is better.

Gold has been used to store value for thousands of years, while Bitcoin is a new and experimental technology. It's absurd to say that you would use an experimental technology to store long-term wealth. Maybe once it's tried and proven, fine. But right now it's inefficient, volatile, has high fees, and has got the problem with mining I talked about above.

For clarity: My comments above are directly relevant to the comment above about inflation. Guarding against inflation is about holding onto your wealth for the long term. I was comparing Bitcoin to gold for that purpose -- which is entirely valid.