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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

#121

Post by ceejayoz »

bmelton wrote: post #115
parasubvert wrote: post #69

Earlier quoted context omitted.

1) With a telephone and a banker, all it takes is 10 minutes to do the same wire transfer. At worst, it would require a fax machine to sign the paperwork. 2) This is wishful thinking. Large currency transfers by law need to be reported by most states, whether Bitcoin or not. A thousand dollars is not large ($10k is typical). Your scenario here is effectively saying it's easier to break the law with bitcoin. All you a…

I think that casts the action in an unnecessarily negative light. Is BTC considered 'currency' by the US government? Do its transfers necessitate reporting to the government? If I sent a thousand dog biscuits to my home land, does the government need to be involved? Under what law?

> Is BTC considered 'currency' by the US government? Do its transfers necessitate reporting to the government? If I sent a thousand dog biscuits to my home land, does the government need to be involved? Under what law?

Almost certainly, under a variety of money laundering laws. You can't just convert cash into diamonds/gold/Bitcoins and thumb your nose at the authorities saying "look, no currency!"

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#122

Post by empthought »

bmelton wrote: post #112
girvo wrote: post #13

I truly don't get this "BTC is a Ponzi scheme" thing. And "Social Security is a Ponzi Scheme" in the third sentence really doesn't endear me to this writer... I don't buy it. Yeah, Satoshi owns a stack. But if he sold out, the price would drop so hard it'd make your head spin... and I doubt Satoshi would be able to be rid of all of them in time before they bottom out. The market isn't large enough yet to pull that so…

I agree that BTC is not, but I thought it was fairly well understood that social security was a mandatory Ponzi scheme. From Wikipedia: "A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from existing capital or new capital paid by new investors, rather than from profit earned by the individual or organization running the operation." Social security does exactly that, and its rece…

Social security is a mandatory insurance program, not a mandatory investment program. Like any other insurance program, the solution to shortfall is to increase premiums or decrease payouts.

Since there isn't yet a shortfall that can't be covered by existing funding sources, these solutions have not yet been implemented. Just like a private insurance company.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#123

Post by NikolaTesla »

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…

The real danger of Bitcoins is not its volatility, but its potential to illustrate the downside of all fiat based currency when compared with something like Bitcoins whose money supply does not fluctuate based upon the needs of a few. If that fact ever reaches the consciousness of enough people worldwide, watch out.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#124

Post by icebraining »

a_bonobo wrote: post #12
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…

>relate to bitcoins we use what we know which is Dollars. I don't think this says anything about Bitcoins as a currency. When the Euro was introduced in Germany, most restaurants, newspapers, politicians etc. kept on listing the Mark price alongside with the Euro price as a point of reference. After a few years this practice stopped when people got used to estimating the worth in Euros (my parents still translate eve…

Same here in Portugal. Many people over ~50 still convert to our old currency whenever we're talking about larger amounts. It's really hard to reset your frame of reference after so many years.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#125

Post by grey-area »

nwh wrote: post #61
grey-area wrote: post #60

Earlier quoted context omitted.

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

A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network. The network time…

I don't need a description of how the one true digital currency works thanks, bitcoin is not the only way to produce a currency.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#126

Post by ceejayoz »

basyt wrote: post #75

I think the most important lesson is that traditional economists are just going to have to learn to live with the fact that their theories don't explain bitcoins. or they might just be kicking themselves for not buying coins sooner. lol.

Why would Bitcoins be exempt from standard economics? We're not talking about quantum physics where everything starts acting wonky.

Claiming Bitcoins won't follow economic theories is like claiming plastic money will work differently than paper money and coins.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#127

Post by nwh »

grey-area wrote: post #125
nwh wrote: post #61

Earlier quoted context omitted.

A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network. The network time…

I don't need a description of how the one true digital currency works thanks, bitcoin is not the only way to produce a currency.

You asked why mining was necessary. I provided an explanation.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#128

Post by aestra »

dgregd wrote: post #66
berberous wrote: post #47

Earlier 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…

> It should be called a bubble, not a ponzi scheme. This is a first bubble which is popular mainly among tech geeks :) What is strange, nobody is asking what problem Bitcoin really solves. As far I know it failed as a protection for silk road types. Silk road was compromised and Bitcoin didn't helped them.

Transferring money quickly and easily and cheaply across boarders. Universal currency.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#129

Post by parasubvert »

bmelton wrote: post #115
parasubvert wrote: post #69

Earlier quoted context omitted.

1) With a telephone and a banker, all it takes is 10 minutes to do the same wire transfer. At worst, it would require a fax machine to sign the paperwork. 2) This is wishful thinking. Large currency transfers by law need to be reported by most states, whether Bitcoin or not. A thousand dollars is not large ($10k is typical). Your scenario here is effectively saying it's easier to break the law with bitcoin. All you a…

I think that casts the action in an unnecessarily negative light. Is BTC considered 'currency' by the US government? Do its transfers necessitate reporting to the government? If I sent a thousand dog biscuits to my home land, does the government need to be involved? Under what law?

Every country on earth has export reporting and foreign currency exchange laws. Between the two, there is always monitoring (for large transactions) and regulation (tariffs, duty) of international trade and capital flows.

Keep in mind it was illegal in the USA to actually export crypto source code for keys of a particular strength in the 1990s - it was viewed as a "munition". This is why web browsers had 40-bit and 128-bit SSL versions. Those were lifted eventually due to efforts from the software/web business lobby.

However, it still is also illegal to export many classes of goods and services to particular nation states that are undergoing US sanctions. if your homeland is Iran or Syria, for example, you're not going to be sending dog biscuits. If it were Pakistan, you probably could - but it would have to be reported as part of the export manifest with FedEx or DHL. Same goes for electronic transactions like bitcoin.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#130

Post by yen223 »

dgregd wrote: post #66
berberous wrote: post #47

Earlier 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…

> It should be called a bubble, not a ponzi scheme. This is a first bubble which is popular mainly among tech geeks :) What is strange, nobody is asking what problem Bitcoin really solves. As far I know it failed as a protection for silk road types. Silk road was compromised and Bitcoin didn't helped them.

> This is a first bubble which is popular mainly among tech geeks :)

Not by a long shot. Remember the early 2000 dotcom bubble burst?

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