Important to note: The author of the article, Gary North, is the same guy who predicted a "failure of the global Information Technology (IT) infrastructure and that it would precipitate severe disruption and the complete collapse of the international economy, leaving American Christians to restore society following the collapse." Also, he "favors capital punishment for a range of offenders; these include women who li…
Bitcoins: The Second Biggest Ponzi Scheme in History
91–100 of 306 posts
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#92Yet 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 adopte…
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#93This article is unfortunately mostly right. Bitcoin's are 95% a ponzi scheme investment, and will at some point crash spectacularly. The question remains, however, whether from the ashes of that crash a useful product can remain, that can still succeed as a currency, or whether the psychological damage will prove to be too much to move past. If it can survive, it may even eventually return to the same high prices, bu…
It's already collapsed twice after major price increases, first from (iirc) about $30 to $3, then from about $240 to $60. It looks to me like we are having speculative bubbles, but it's on top of a major long-term growth trend. I think most people heavily into bitcoins understand it only has real value if it's spent as currency, and there's been a lot of work on getting merchants involved. The easy way to handle thin…
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#94Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#95Important to note: The author of the article, Gary North, is the same guy who predicted a "failure of the global Information Technology (IT) infrastructure and that it would precipitate severe disruption and the complete collapse of the international economy, leaving American Christians to restore society following the collapse." Also, he "favors capital punishment for a range of offenders; these include women who li…
I just don't see how is one's view on abortion validate or invalidate his views on Bitcoins. Care to explain?
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#96I am a big skeptic of a lot of things but not Bitcoin. Because even if you take away the bitcoin to dollar conversion, you still have a huge number of people who would be willing to trade bitcoin for goods and services because they have a huge investment in the hardware and power it took to make their bitcoins. I was curious if Bitcoin would become a good solution to the quest for a micropayment system but it has bee…
Just because people made a huge investment in hardware or power to make Bitcoins doesn't mean anyone else has the remotest bit of interest in accepting Bitcoins for goods and services they provided. The average Zimbabwean worked a lot harder for their Zimbabwean dollars before being forced to switch to other currencies that other people would actually accept.
Right now, some people will accept Bitcoins for real goods and services because they believe the chances of currency appreciation in future are greater than the lack of liquidity and threat of price crashes. Since Bitcoin isn't reliably convertible into anything else, people's willingness to accept it depends on it remaining that way in future (here, it's "deflationary" tendencies are actually a big advantage). People need dollars to meet certain financial obligations, whereas they merely want Bitcoins because they seem like an investment. Take away that anticipated growth in value and suddenly the risk to accepting BTC seems like far more of a downside than the transaction costs of conventional currency.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#97Earlier quoted context omitted.
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 spec…
Robert Schiller, the Yale economist and bubble-proponent, suggests diagnosing bubbles based on a checklist-based approach similiar to the way depression or other medical issues are diagnosed, with the following indicators: - Sharp increases in the price of an asset like real estate or dot-com shares - Great public excitement about said increases - An accompanying media frenzy - Stories of people earning a lot of money, causing envy among people who aren’t - Growing interest in the asset class among the general public - “New era” theories to justify unprecedented price increases - A decline in lending standards
Bitcoin fits the above extremely well. I should note that Eugene Fama shared the Nobel prize with Schiller, but does not believe in the idea of bubbles or Schiller's claimed ability to predict them. After all, one might say that Google's stock fits the above criteria just as well, but that's clearly not a bubble. (I think I side with Schiller on this one though, although Fama raises good points.)
As I said in my first post, I agree that Bitcoin may eventually succeed as a currency and gain a high value. But it will be a slow process backed by fundamentals. The exponential growth taking place right now is pure bubble speculation. Very few really care about this future as an "important currency." Instead, you have people like me. I invested some money. It's now worth nearly 10x. I want it to keep going up, and I am currently letting it ride. I tell myself stories that it will replace gold; I read blog posts arguing that if it does it will be worth $10,000+ a coin. But at some point, the tide will begin to turn. Negative stories will increase. There will be price drops. And people like me, who pretend to themselves that they have a reasoned investment thesis, will say fuck it, and cash out in hordes. And from the ashes, we will then see what it can do as a currency. But the speculators are here, rapidly increasing, and will eventually, rapidly flee. (Although I hope I'm wrong, because I'm probably going to let my BTC's ride one way or the other...it's just too much fun being on this roller coaster.)
Put simply, I think the question is whether the fundamentals have a serious chance at overtaking the speculators before a big bust occurs. The speculators are increasing exponentially. And for all the talk of merchants beginning to use Bitcoin, or a random pizza or bar accepting bitcoins, the fundamentals don't really seem to be there or growing fast enough. I don't know anybody that seriously uses it in that manner, except for the few ardent Bitcoin evangelists. (Although if anyone has any interesting data, please link me!). Black markets and gambling sites seems to be the only real sectors seriously using it as a currency.
Disclaimer: I could be wrong, and change my opinion on BTC way too often to be trusted. :)
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#98Important to note: The author of the article, Gary North, is the same guy who predicted a "failure of the global Information Technology (IT) infrastructure and that it would precipitate severe disruption and the complete collapse of the international economy, leaving American Christians to restore society following the collapse." Also, he "favors capital punishment for a range of offenders; these include women who li…
I checked out the comments before reading the article since it had a 'sensational' headline which usually follows up with a crappy article, glad I didn't waste my time. I'm wondering where all the up votes came from though.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#99Important to note: The author of the article, Gary North, is the same guy who predicted a "failure of the global Information Technology (IT) infrastructure and that it would precipitate severe disruption and the complete collapse of the international economy, leaving American Christians to restore society following the collapse." Also, he "favors capital punishment for a range of offenders; these include women who li…
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#100Earlier quoted context omitted.
Litecoin does not solve any problem, just the proof of work algorithm is changed. The block time has nothing to do with it really, it just makes people believe one confirmation is as strong as any other (Litecoin's are actually just 4 times weaker).
4 times weaker? When you're talking about statistical attacks that depends on getting a very small number of random events ahead of your opponent, I would expect quadrupling the numbers to provide significant additional security in the medium term of 10 to 100 minutes. Clearly a litecoin confirmation is weaker than a bitcoin confirmation, but 4 or 12 litecoin confirmations should be much stronger than 1 or 3 bitcoin…
The chance of me solving 4 litecoim blocks is the same as me solving 1 bit coin block, assuming the same hash power and difficulty. In reality Litecoin is quite low in both, so is substantially easier to abuse in the real world.