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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

#131

Post by wreegab »

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…

Kudos to you to have read the whole thing and followed through with comments. I stopped reading after I came upon two fallacies, early in the article.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#132

Post by Perseids »

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…

> There will be an eventual cap at 21 million bitcoins, so satoshis stash is somewhere between 9% to 4% of all bitcoins.

Btw: As the rules and mechanics of the Bitcoin network are enforced by the majority of clients it would be pretty simple to invalidate these bitcoins if the majority of the Bitcoin software authors would agree to do so. Just ignore any transaction regarding these old addresses.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#133

Post by bmelton »

ceejayoz wrote: post #121
bmelton wrote: post #115

Earlier quoted context omitted.

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!"

Sending money back home is a far different scenario than laundering, and the assertion that it is assumes bad faith from the beginning.

I'm not suggesting you don't have a point, but the idea that BTC has value is, I think, arbitrary at this point. There are thousands of leaves littering the lawn in my back yard right now -- surely I could send those to a foreign land without having to declare it, right?

An argument could be made that they have more actual value than a crypto-currency at this point, as they're a tangible good.

Similarly, if I send $10,000 worth of virtual roses to friends on Facebook, the government is not interested, and I haven't seen anything that convinces me, at the moment, that BTC should be treated differently than any other all-digital good.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#134

Post by yen223 »

mike_esspe wrote: post #79
dgregd wrote: post #66

Earlier quoted context omitted.

> 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.

It solves 2% credit card fee. It's enough for success at the level of at least Visa & MC. (And as a bonus it solves a lot of other problems too).

Does it? When mining becomes unprofitable, Bitcoin servers will have to tack on transaction fees to speed up the verification process.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#135

Post by eigenvalue »

Perseids wrote: post #132
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…

> There will be an eventual cap at 21 million bitcoins, so satoshis stash is somewhere between 9% to 4% of all bitcoins. Btw: As the rules and mechanics of the Bitcoin network are enforced by the majority of clients it would be pretty simple to invalidate these bitcoins if the majority of the Bitcoin software authors would agree to do so. Just ignore any transaction regarding these old addresses.

Why should they be invalidated? Why shouldn't the inventor of something useful benefit from the invention?

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#136

Post by mathattack »

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…

His core point is still true - when the price is so volatile, it's now not a means of exchange, it's a speculative investment where the last buyer will get 0. It's kind of like the Palm/3com mispricing in 2000 when the subsidiary was worth more than the parent.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#137

Post by bushido »

Aqueous wrote: post #107
pyalot2 wrote: post #55

Earlier quoted context omitted.

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, whic…

The more people who use BitCoin the less volatile it will be, the more BitCoin tokens will be spread across a large number of individual actors, the less a single actor can dictate price fluctuations.

This is among the most ridiculous statements I have heard about how the markets work. Its actually the exact opposite, the lesser the people the lesser the fluctuations/volatility. And this is not just about the markets, it applies to most things. ex:

1. Single drug company selling the life changing drug = High near-fixed-global price | As soon as more drug companies can sell increase price competition, higher variance in generic pricing, different rates globally

2. All company valuations remain relatively steady until an IPO

3. If a man/woman suddenly gets a lot of suitors their current relationship if less than optimal may crash and burn , in the absence of alternatives the relationship may have a better chance of survival.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#139

Post by jervisfm »

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…

> There will be an eventual cap at 21 million bitcoins.

At the increasingly slow rate that coins are produced, this won't happen for some. But assuming that bitcoins are still around and in use at the point in time in the future when this happens, what will be the effect of this?

The supply is fixed and no more can be produced; and since it's still around, chances are there is demand / usage that would likely grow. The likely result seems to be that from that point onwards, bitcoin's value would only grow to due an increase in its scarcity. Perhaps, this is a possible justification or rationalization for bitcoins as a (very) long term investment.

Also, not too familiar with the internal bitcoin protocol but what will happen to the network of miners who help with verifying / maintaining the transaction ledger? I think the reason they participate is that they are (proportionally) rewarded for their services in new bitcoins. When this is no longer the case, who will agree to do this work then?

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#140

Post by gibybo »

grey-area wrote: post #60
salient wrote: post #31

Earlier quoted context omitted.

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.

Mining is not just for distribution of tokens. I would argue the more important use is for maintaining the proof-of-work blockchain. There have been some experimental attempts at maintaining a distributed ledger using a proof-of-stake/proof-of-work hybrid, but I don't know of any successful attempts to do it without a proof-of-work component.

If you have an idea of how it could be done, you may have a shot at dethroning Bitcoin.

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