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Bitcoins: The Second Biggest Ponzi Scheme in History

garynorth.com

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Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#31

Post by salient »

nwh wrote: post #11
CJefferson wrote: post #6

This is as good a place as any to ask this question. Do we actually know how many large mining groups we need to make up 51% of the processing power of the block chain (hopefully that make sense, from my understanding of bitcoin). There has been a number of changes to the bitcoin protocol, which have been made in a short amount of time and unanimously, from what I can see. That implies to me that bitcoin is in practi…

> Do we actually know how many large mining groups we need to make up 51% of the processing power of the block chain Two. GHash.io and BTCguild make up 27% each, for a total of 54%. https://blockchain.info/pools GHash.io had actually been acting maliciously according to some users on Bitcointalk, but the operator claims that was a rogue actor inside that has been dealt with. Double spends against betting sites in par…

We need digital currencies that can only ever be mined efficiently with a CPU, and there need to be many more blocks with lower rewards so that people don't need to join pools if they don't want to. They need to be able to earn "something" (not zero) even with a low-end CPU or when the difficulty gets too great, and close to the point of reaching the maximum number of coins. I think there weren't even 10 percent Bitcoins on the market, and CPU's already became obsolete.

Yes, I know about the scrypt-based ones, but unfortunately they can still be mined 10x faster with a GPU, and I don't think that's much more preferable either. It needs to be CPU-only, because most people get as fast CPU's as they can, usually, but they don't really care about the GPU performance, other than needing it to support HD playback, which is a very low standard for a GPU these days.

I'm not sure how it can be done, but some of the ones that claim to be CPU-only are using multiple hashing algorithms and ciphers at once, presumably to ensure that the task is too complex for anything less "general purpose" than a CPU (at least until they start making chips with accelerators for each and every one of those hashing algorithms?! Maybe something to prevent that could be built-in).

The point is to make mining as decentralized as possible. I realize the danger of botnets, too, but I think the trade-off is worth it. I'd rather have that, than a few groups of people or governments owning a ton of ASIC's, or perhaps a few very expensive quantum computers in the future, that they can use to manipulate the currencies. At least if it's CPU only, everyone can have a say in it, in aggregate, which is really the whole point of decentralization, and empowering the individual in the Internet world.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#32

Post by paulgb »

Is this the same Gary North who predicted the collapse of society from the Y2K bug?

> North predicted a Y2K catastrophe in print and online,[31] and predicted that a Y2K date-rollover failure of the global Information Technology (IT) infrastructure would precipitate severe disruption and the complete collapse of the international economy, leaving American Christians to restore society following the collapse.

http://en.m.wikipedia.org/wiki/Gary_North_(economist)#Y2K_ca...

Edit: looks like he has a long history of claiming the sky is falling:

http://www.wired.com/culture/lifestyle/news/1999/01/17193

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#33

Post by orenbarzilai »

"Companies will not sell goods and services based on Bitcoins. Bitcoins have to have stable purchasing power if they are to serve as money, and they will never, ever achieve stable purchasing power."

More & more companies announce that they accept Bitcoins on a daily basis, thus it has purchasing power & it creates value to the end consumer.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#34

Post by terranstyler »

I see all these people calling themselves libertarians arguing against BTC but I have yet to see why BTC would fail.

I hate this "BTC is not money" argument because the core foundation of liberalism states basically "money is what people voluntarily choose to use as money". So if they are convinced that BTC works (works at least better than some alternative) , why shouldn't they use it as money?

Volatility is not an argument. Before "adoption" of USD and gold as money, they most probably were volatile as well...

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#35

Post by VLM »

fyolnish wrote: post #8
VLM wrote: post #4

Betteridge's law of headlines: any headline asking a question, the answer is "no". http://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines VLM's law of economics commentary: anyone describing something as a Ponzi Scheme has no idea what a Ponzi Scheme is and is just trying to baffle/intimidate the reader. (It might very well be a fraud / scam / ripoff / whatever but it sure as heck isn't a Ponzi Scheme) This is…

This headline doesn't ask any question.

Yes, and much as that specific "law of headlines" exists, I'm proposing another unrelated "law of headlines" which is also almost universally true.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#36

Post by pelle »

Bitcoin is not an investment scheme. It's a payment system. Unfortunately people are looking at it as an investment scheme.

Even if it was an investment scheme it hardly fits the definition of a ponzi scheme. In any new investment whether it's a startup or bitcoin the early investors make out better than later investors. That is not the definition of a ponzi scheme.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#37

Post by blahbl4hblahtoo »

Austrian economics are so painful. Its amazing to me how impervious to contrary evidence its adherents are... their blind faith in their core beliefs are so unshakable. Every time I read one of them say that money arose from markets I wonder why they don't sponsor a bill that sets up an agency like NOAA that watches for dangerous conditions in this primeval force called "the market" so that people can be warned when "the market" is angry and another virgin needs to be tossed into its going maw in an act of propitiation.

Just the idea that markets pre-date states is so ingrained.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#38

Post by nkuttler »

Yet again somebody writing about bitcoin who hasn't even read the FAQ, https://en.bitcoin.it/wiki/FAQ#Is_Bitcoin_a_Ponzi_scheme.3F in particular:

"In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy. A ponzi scheme is a zero sum game. Early adopters can only profit at the expense of late adopters. Bitcoin has possible win-win outcomes. Early adopters profit from the rise in value. Late adopters, and indeed, society as a whole, benefit from the usefulness of a stable, fast, inexpensive, and widely accepted p2p currency. The fact that early adopters benefit more doesn't alone make anything a Ponzi scheme. All good investments in successful companies have this quality."

Back to the article:

> somebody owned a good percentage of the original digits.

Ok, this sounds just like bitterness from somebody who didn't buy in early. See also https://en.bitcoin.it/wiki/FAQ#Doesn.27t_Bitcoin_unfairly_be...

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#39

Post by blahbl4hblahtoo »

paulgb wrote: post #32

Is this the same Gary North who predicted the collapse of society from the Y2K bug? > North predicted a Y2K catastrophe in print and online,[31] and predicted that a Y2K date-rollover failure of the global Information Technology (IT) infrastructure would precipitate severe disruption and the complete collapse of the international economy, leaving American Christians to restore society following the collapse. http://e…

An Austrian economist predicting the end of the world? I'm shocked!

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#40

Post by zanny »

ashray wrote: post #7

The analysis in this article is so flawed that it's hard to take it seriously. A more balanced analysis might have helped. Sure, bitcoin has several terrible characteristics that have been exposed over the past few weeks (volatility, tons of speculation, new users don't understand wallet security, etc.) But to insinuate with absolutely zero understanding that the creators of bitcoin did this to get rich is just plain…

> Sure, bitcoin has several terrible characteristics that have been exposed over the past few weeks (volatility, tons of speculation, new users don't understand wallet security, etc.)

None of these are new, bitcoin has been volatile, has had a large speculative market, and a problem with new users understanding it since 2009.

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