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Bitcoins: The Second Biggest Ponzi Scheme in History

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Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#51

Post by aw3c2 »

loceng wrote: post #46
pyalot2 wrote: post #42

> In this sense, Bitcoins is not a Ponzi scheme. It is simply a supermoney scheme. Admits that bitcoin is not a ponzi scheme in his own article. > The money was siphoned off from the beginning. Somebody owned a good percentage of the original digits. Implies that most bitcoins are owned by satoshi nakamoto, without substantiating this claim by any number to quantify the impact. The estimated stash of satoshi is about…

If you buy Bitcoin at $1,000 and it stays above $1,000 ... and then at $100,000 per Bitcoin value if it only fluctuates $200 per day, that's not really volatile.

If you buy Bitcoin at $1,000 and it drops to $70 ... and then to $50 per Bitcoin value if it fluctuates $4 per day, that's really volatile.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#52

Post by ashray »

zanny wrote: post #40
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.

Thanks for adding that, I am of course personally aware that these discussions have taken place time and again on bitcointalk.

I meant to say that these problems have been exposed more by the general press, etc. lately.

There are other issues that the recent spike in value/volume have introduced:

- bitcoin clients, usage, security are too complex for the average consumer

- minimum miners fee is now too high ($0.10)

- some miners are cherry picking transactions with higher fees so some transactions are taking longer to confirm

- fear that the transaction bottleneck might be hit (imagine if all the internal movements on exchanges were on chain transactions, this would've already happened)

- a lot of ill feeling and negativity from tech folks who could've been early adopters but missed the bus. Truth is, it's still early times. Also, services still need to be built, tech folks can always do that! :)

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#53

Post by loceng »

aw3c2 wrote: post #51
loceng wrote: post #46

Earlier quoted context omitted.

If you buy Bitcoin at $1,000 and it stays above $1,000 ... and then at $100,000 per Bitcoin value if it only fluctuates $200 per day, that's not really volatile.

If you buy Bitcoin at $1,000 and it drops to $70 ... and then to $50 per Bitcoin value if it fluctuates $4 per day, that's really volatile.

Right, and so that depends on adoption and acceptance rates, and so making it as attractive of an alternate currency as possible should be the goal of the ecosystem - which includes making it secure.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#55

Post by pyalot2 »

loceng wrote: post #46
pyalot2 wrote: post #42

> In this sense, Bitcoins is not a Ponzi scheme. It is simply a supermoney scheme. Admits that bitcoin is not a ponzi scheme in his own article. > The money was siphoned off from the beginning. Somebody owned a good percentage of the original digits. Implies that most bitcoins are owned by satoshi nakamoto, without substantiating this claim by any number to quantify the impact. The estimated stash of satoshi is about…

If you buy Bitcoin at $1,000 and it stays above $1,000 ... and then at $100,000 per Bitcoin value if it only fluctuates $200 per day, that's not really volatile.

Yes, but the volatility nobody is debating is that it was below $1 in 2011 before it shot up above $33 and then came down to $2 at the bottom again. A similar development could be observed earlier 2013 where it started the year around $10, then shot up to $266 and came down again to $80.

It should clear to everybody who holds bitcoin, that there is massive volatility, and that you might buy your coins at a time, which can be very dammaging.

I would argue however that this isn't an unsurmountable obstacle. A person can substantially lower the volatility he's exposed to at least in the buying phase by dollar cost averaging. An advise btw. that Warren Buffet has publicly given about the current stock market as well.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#56

Post by aw3c2 »

braum wrote: post #3

Something hit me while I was reading this article. Anytime you have seen a bitcoin article, usually on HN, but also elsewhere, it almost always shows a US Dollar figure for the amount and never the bitcoin amount. Why, because as this article suggests. Bitcoins are a commodity and not a currency and when we want to try and relate to bitcoins we use what we know which is Dollars. Good luck to all of you techies who re…

That's because pretty much everyone who is raving about Bitcoin is just looking at the BTC/USD rates and hoping to cash in when selling their bitcoin for USD.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#57

Post by joezydeco »

terranstyler wrote: post #34

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…

This is a fun NPR "Planet Money" podcast where they travel to a libertarian summer festival dedicated to trading goods and services strictly in gold and silver. It's...awkward.

http://www.npr.org/blogs/money/2013/07/05/198413086/episode-...

One of the biggest problems is that the rate is constantly changing just like Bitcoin. And that rate is in US Dollars, the currency they're trying to abandon.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#58

Post by DennisP »

All these people talking about Ponzi schemes are ignoring a few things.

Bitcoin is a useful technology.

It's is in limited supply, as money pretty much has to be.

It's not backed by commodities, and can't be, if you want to avoid vulnerability to the sort of government attack that shut down E-gold.

When you're starting out with an intrinsic value of zero, and you have limited supply, there's no way for a currency to gain substantial real-world usefulness without a large price increase along the way.

People hoping for gain still spend bitcoins, they just replace them right away.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#59

Post by netcan »

berberous wrote: post #47
pilker09 wrote: post #28

Earlier quoted context omitted.

Bitcoin is only a Ponzi to those that don't actually understand Ponzis. Which scammer is paying me for my bitcoins out of someone else's promised profits?

You are correct. I was using the article's language, which I agree is not right. It should be called a bubble, not a ponzi scheme. They are similar in that the price rise is being sustained by many new speculators/investors, and at some point, that will inevitably collapse. I am reminded of the story that Joseph Kennedy predicted the 1920's stock market crash after receiving stock tips from his shoe-shine boy. He rea…

All money is a bubble, IMO.

>> price rise is being sustained by many new speculators/investors, and at some point, that will inevitably collapse

It may but I don't think its inevitable. Many speculators/investors are buying bitcoins because they believe bitcoins will be used in the future as an important currency. If that happens, there will be even more demand for bitcoin and the price will be high forever.

Its speculative, but it's not nonsensical.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#60

Post by grey-area »

salient wrote: post #31
nwh wrote: post #11

Earlier quoted context omitted.

> 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 Bitc…

Why is mining necessary in a digital currency? There are plenty of other solutions to creation/distribution of tokens.
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