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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

#151

Post by Perseids »

eigenvalue wrote: post #135
Perseids wrote: post #132

Earlier quoted context omitted.

> 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?

He/She/They should, but having 4% of the total amount of a currency in the hand of one completely unknown person / organization is quite a threat to its stability. Also I would see a reward of one billion dollar as pretty excessive. And that is only the worth at the current market value.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#152

Post by dgregd »

aestra wrote: post #128
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.

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

The total number of Bitcoins is capped at 21 million. So how it can handle GDP growth?

The amount of currency should reflect GDP size. Otherwise there will be deflation.

Gold worked well as currency. Its yearly production increased total amount of mined gold by about 3%. Which was on GDP increase level.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#153

Post by ubernostrum »

NikolaTesla wrote: post #123
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.

I hate to say this, but at this point when I see someone use the words "fiat currency" unironically, I also expect to hear an argument about gold fringe on a flag, and other similar easily-repeated cargo-cult phrases/arguments against whatever the person doesn't like.

One of the real dangers to Bitcoin is precisely that sort of public image.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#155

Post by parasubvert »

ashray wrote: post #74
parasubvert wrote: post #63

Earlier quoted context omitted.

"It's is in limited supply, as money pretty much has to be." An adjustable and growing money supply is much more the norm.

True, and bitcoin does stick to this norm. The rate of bitcoin production is predictable for the next 100+ years. More can be produced with more effort, it's just not as easy as printing notes. So it is adjustable and it is growing. The price rise is caused by speculation and demand, not because new bitcoins aren't being produced.

Bitcoin does not stick to that norm. The supply is completely inelastic.

Whereas a money supply typically requires different rates of creation or even destruction to respond to the market demand, partiularly in a time of currency hoarding (such as we are experiencing now in the real global economy).

There is also a strong argument for multiple currencies with different supplies of money rather than a single global supply, so there can be mutual adjustment of prices and wages without the social wreckage of a deflationary spiral (such as Southern Europe is currently experiencing because of the Euro).

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#156

Post by ceejayoz »

kleiba wrote: post #102
theboywho wrote: post #95

Earlier quoted context omitted.

His views on other topics do not necessarly validate or invalidate his views on Bitcoin, but these views can not be ignored and as I said in my comment, they should be taken into account while forming your own opinion about his article.

I still don't understand why they should.

If someone's clearly a lunatic in certain areas, I'm going to have a little less faith in their rationality in others.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#157

Post by febeling »

cynicalkane wrote: post #119
jseliger wrote: post #113

Earlier quoted context omitted.

Money develops out of market exchanges. Money was not used for its own sake initially, but it becomes widely used as money as a result of innumerable transactions within the economy This also doesn't appear to be true: see David Graeber's book Debt: The First Five Thousand Years for his descriptions of how money actually emerges from religious ceremonies and temples, not barter (as most econ books have it) or "market…

I wouldn't trust Graeber, as he is frequently wrong about easily verifiable facts in such a way that it supports his world view. There's no reason to trust a liar when he tries to tell you something you don't know about. My favorite Graeberism is when he describes the founding of Apple: > Apple Computers is a famous example: it was founded by (mostly Republican) computer engineers who broke from IBM in Silicon Valley…

Uh, thanks for pointing to this. I found an article detailing this a bit more[1]. This is a inaccuracy that is quite telling about the quality of research this author is going to offer.

1 http://www.businessweek.com/finance/occupy-wall-street/archi...

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#158

Post by oznathan »

A very emotional article IMO.

Volatility is not permanent characteristic of bitcoin. It's like saying that a newborn child will never be able to walk, because now it's only crawling.

At a certain point Bitcoin will stabilize. Whether that will be at 0 or 1 million, no one knows. Not the haters nor the fanboys.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#159

Post by melvinmt »

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…

Except the EUR/DEM exchange rate has been fixed since 1999, whereas BTC exchange rates change enormously every week.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#160

Post by emilga »

What can a bitcoin be used for, other than as a medium of exchange, which also increases demand for the remaining bitcoins?

To (unqualified) me, this seems the crucial question. If your money is not propped up by government fiat, it better have some non-monetary uses to succeed in the long run. (And it should not be possible to satisfy that non-monetary use by an arbitrarily small amount of "money".)

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