Bitcoin is a Ponzi • Hacker News Board

Re: Bitcoin is a Ponzi

#461

Post by tyrfing » Thu, Oct 07, 2021, 6:02 AM UTC

dehrmann wrote: post #318

tyrfing wrote: post #269

Bitcoin is a store of value. Why is it a store of value? Because people believe it is, much like gold. You can gesture vaguely at the minor utility that gold has, the ability to be made into things of commercial value, but that's a fig leaf as much as it is to point to Bitcoin's potential use for payments. Hashrate and mining investment is a reflection of that belief. Don't take this as advice to buy Bitcoin at 50k.…

> Bitcoin is a store of value. Possibly. It is an asset, after all. The problem is that people are buying it because they expect it to appreciate significantly, hence "when lambo." There's a difference between believing something will retain its value and believing it will appreciate.

Definitely true, retail trading of all sorts is basically gambling, and crypto has a lot of gamblers. I think this is a really bad thing. However, even the typical lambo-dreamer sustains the effect: it would be rare for them to cash out completely, unless that dream is suddenly dashed. What if they miss out on future growth?

Rephrasing: how much bitcoin do you think the average bitcoin-billionaire owns? It's belief that stops them from selling, and belief that sustains the value. If you think that sounds like a ponzi, you're missing one thing: all else equal, dollar (and equivalent) denominated value will rise, because those currencies slowly devalue by design.

Re: Bitcoin is a Ponzi

#462

Post by Helloworldboy » Thu, Oct 07, 2021, 6:02 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…

My theory is that a lot of people here had the opportunity to be extremely early adopters of Bitcoin and make a hell of a lot of money, but most missed that boat and now hate bitcoin because of it

Re: Bitcoin is a Ponzi

#463

Post by jliptzin » Thu, Oct 07, 2021, 6:02 AM UTC

zacmps wrote: post #163

jliptzin wrote: post #147

Bitcoin is a lot of different things to a lot of different people. The fact that it satisfies a certain set of conditions of a Ponzi scheme does not invalidate the myriad current and future applications of crypto. The social security administration could also be considered a Ponzi scheme, but it still provides tremendous value to a lot of people.

I'm sorry, what applications? Besides accelerating global warming there doesn't seem to be anything it's good at.

I said crypto generally, not just Bitcoin, as the article in this post is not only focused on Bitcoin but crypto in a broad sense.

Re: Bitcoin is a Ponzi

#464

Post by hackingforfun » Thu, Oct 07, 2021, 6:02 AM UTC

arcticbull wrote: post #432

hackingforfun wrote: post #411

Earlier quoted context omitted.

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.

China vs crypto has been going on since 2013 [1]. Open source, decentralized crypto is a direct competitor to China's CBDC, which they have already developed and are trying to distribute [2]. Of course China would want to squash all competition. Jerome Powell from the Federal Reserve said in a video from 9/30/21 that he has no intention to ban crypto like China did, although it sounds like stablecoins may be regulated [3]. Jerome Powell has also said that the US is considering a CBDC [4]. The SEC has also already said in 2018 that Bitcoin and Ethereum are not securities [5]. The current head of the SEC, Gary Gensler, taught a course on blockchain for several years at MIT, and here is a set of his videos [6]. How do you think this technology is going to be completely banned, or that everyone will forget about it and it will totally go away? The seeds are already planted, and as I said, there's no nipping this in the bud now.

[1] https://www.btctimes.com/news/chinas-history-of-bitcoin-bans

[2] https://www.cnbc.com/2021/06/02/china-digital-currency-beiji...

[3] https://www.bloomberg.com/news/videos/2021-09-30/powell-says...

[4] https://www.cnbc.com/2021/09/22/the-fed-is-evaluating-whethe...

[5] https://www.cnbc.com/2018/06/14/bitcoin-and-ethereum-are-not...

[6] https://ocw.mit.edu/courses/sloan-school-of-management/15-s1...

Re: Bitcoin is a Ponzi

#465

Post by DeathArrow » Thu, Oct 07, 2021, 6:02 AM UTC

ulrikrasmussen wrote: post #421

MelonTree wrote: post #161

Earlier quoted context omitted.

I got involved in bitcoin after being blackballed from the (US) financial world while for 2-3 months while I was "investigated" in the most dystopianly opaque way possible. One day I lost the ability to transact. A few months later I got it back. Had it not been for good friends who could cover my expenses, I could have easily ended up homeless. And the most shocking part of it all, was that I was merely collateral d…

To begin with, let me say I'm very sorry this happened to you, and I think it sounds like an example of a really broken system. This should never happen to someone randomly, and I think you should have been compensated a lot for the troubles and stress it must have caused you. However, I think we should be careful with drawing the conclusion that technology for circumventing our institutions' ability to regulate alto…

Everybody should be allowed to transact. While transactions can be results of crimes, transactions are not crimes themselves.

Governments should stop crimes that may lead to transactions, not transactions.

Re: Bitcoin is a Ponzi

#466

Post by naruvimama » Thu, Oct 07, 2021, 6:03 AM UTC

arcticbull wrote: post #453

naruvimama wrote: post #435

Earlier quoted context omitted.

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.

> ... Where people choose to throw their own money should be left to them. Yes, unless it causes harm to the broader economy. I explained this in a different reply lower down, but when enough people participate it can destabilize the entire financial system in the country. And if it takes down the USD, globally. Pardon the pasta, but in 1997, the entire economy of Albania collapsed because everyone started participat…

I agree with that.

What I meant was the governments at the minimum stop banks and financial institutions from legitimizing these.

Re: Bitcoin is a Ponzi

#467

Post by markdown » Thu, Oct 07, 2021, 6:03 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…

> The properties of it being difficult/impossible to confiscate and its privacy make it valuable in oppressive regimes. A refugee could store their wealth in Bitcoin, leave their country, settle somewhere else, and access their Bitcoin without the risk of it being confiscated during the journey, because they can simply memorise the seed phrase (24 words).

LOL, who in those countries would sell them bitcoin?

You've pulled out an argument I see all the time about the utility of bitcoin, but you can always just tell that it's made by someone who's never lived under an oppressive regime.

It's a first-worlders idea of what thirdworlders can do.

Re: Bitcoin is a Ponzi

#468

Post by propesh » Thu, Oct 07, 2021, 6:03 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…

So the blood washes away the diamond?

Re: Bitcoin is a Ponzi

#469

Post by oh_sigh » Thu, Oct 07, 2021, 6:04 AM UTC

DeathArrow wrote: post #442

bb88 wrote: post #293

Earlier quoted context omitted.

> 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 the digitals. Ponzi schemes don't have to run by single individuals, but perhaps by multi-person organizations like the mafia. The mob was the reason the RICO laws came to be. And undoubtedly, the mafia organizations would collaborate to break up their crime into reg…

That's interesting. Can mobs sue each other for anticompetitive practices?

Actually, kind of. It would involve appealing to other organized crime outfits that the given mob interacts with to have them reign in their behavior. Group A might think they can bully group B, and maybe they can, but they can't bully groups C, D, E, and F, who all rely on each other to not attract unwanted attention from the authorities or the public.

See: https://en.wikipedia.org/wiki/Apalachin_meeting

not quite suing, but it was a diplomatic way of resolving disputes and preventing them.

Re: Bitcoin is a Ponzi

#470

Post by graeme » Thu, Oct 07, 2021, 6:04 AM UTC

darawk wrote: post #306

> First, few if any gold investors have expectations of profits. They generally invest in gold as a hedge -- a "store of value" -- that they hope will retain its value in case other assets go sour. Lol. Bitcoin is exactly comparable to gold. Plenty of people buy gold expecting it to appreciate...because other people use it as a hedge. Even if it were true originally that Gold's only purpose was as a hedge (protip: it…

> Plenty of people buy gold expecting it to appreciate...because other people use it as a hedge.

Long run? I think not. Gold hasn’t really risen over millenia, just stayed in a certain band.

Buffett made a good argument that you could either buy a giant gold cube and fondle it, or a large number of productive assets in the states and collect the revenues. He’d bet on the assets being worth more over the decades, and over the long run he was right.

Bitcoin proponents expect bitcoin to soar long run, unlike gold, which doesn’t.