>It will dwarf anything dreamed of by Bernard Madoff.
Madoff's fraud was to the tune of >60 billion.
Bitcoin's cap is at round 10 billion.
So the author expects btc to rise in value by at least 600%
Bitcoins: The Second Biggest Ponzi Scheme in History
161–170 of 306 posts
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#162I think bitcoin will succeed when there are insured bitcoin banks in which to keep your money. Right now the wallet system is really too confusing for non-technical users and it is risky to keep your money in a fly by night wallet service. Keeping your money in a bank is easy.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#163The 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…
But to insinuate with absolutely zero understanding that the creators of bitcoin did this to get rich is just plain nasty. Maybe they did want to get rich (in dollar terms) but there is nothing obvious on the block chain that proves that they cashed out.
Why is that "nasty"? Why even debate or get so defensive about this point?
For very strong reasons it does absolutely seem that the creator of Bitcoins did an early and heavy accumulation of the currency. The fact that they didn't "cash out" (which is rather irrelevant to whether it is "wealth" or not, as an aside) doesn't justify their mining, but actually makes it significantly more questionable -- they added no liquidity, instead actually restricting liquidity by doing a land grab of the easily mined coins. That is not altruistic.
Having a single, mystery figure holding a substantial quantity of a currency is absolutely worthy of debate.
Personally I think Bitcoin will be a v0.1 to something similar in the future. But I do absolutely believe it is effectively a pyramid scheme right now, and the rise in the currency is a combination of limited liquidity coupled with mainstream news and a gold rush mentality.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#164Earlier quoted context omitted.
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.
That presumes bitcoin is the only crypto currency, it isn't, and they don't all rely on mining like this. Secondly, as miners drop out because they can't profit, those who stay in see profitability return. It's self adjusting, there will always be profitable mining for those with the best mining rigs.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#165Earlier quoted context omitted.
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…
> Sending money back home is a far different scenario than laundering, and the assertion that it is assumes bad faith from the beginning. The government can and will assume bad faith in any transfer involving large amounts of money and/or items of value. > 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…
> Actually, I believe Facebook would be required to report that transfer to the IRS.
I believe you're right, because there's a cash transaction there, and cash has intrinsic value.
But if I 'bought' LTC with BTC that I mined at a cost of idle CPU cycles, where's the intrinsic value? The market rate for CPU cycles is far less than the value of the equivalent BTC (or, at least was initially).
If I'm holding $1 million dollars in a bank, I would be subject to capital gains taxes on its interest earnings. If I'm holding 1 million BTC on my hard drive, I'm not. If I paid for those BTC, that's a bit different than if I mined them early.
I'm not trying to be difficult, so much as point out that there's still a long way to go before you can actually say that BTC is currency, and that even if we do determine that it is currency, that it's subject to the same rules and regulations as actual currency or commodities. If I paid capital gains taxes on BTC holdings yesterday, vs waiting til today, I'd have 'saved' approximately 15% due to market fluctuation.
As there's no real 'anchor' to the value of BTC at the moment, I think there are just more questions than answers, really.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#166Important 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?
Then inability to reason in one area is a good indicator that a person simply doesn't reason well at all and casts suspicion on everything he says.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#167Calling a 'Ponzi Scheme' it's just too simple or judgmental IMO, but despite the articles flaws, finally someone started questioning "What's backing all that money?".
Our real money is created out of thin air, backed by nothing for a long time. There is a lot of fantasy and conspiracy theories behind it, but it is a problem in the end of the day. When the money started to be electronic things got even harder to find out what exactly is backing up that money value. Humongous amount simply floats from bank to bank.
While with the existing money is difficult to get to it's primary root of source, with bitcoin this applies pretty much to every penny going around. In theory it's beautiful, but it's an utopia.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#168F.A. Hayek would adore the concept of competing, globalized, & unregulated currencies (unregulated save for it's own algorithm). And that "Bitcoins, Peercoins, Litecoins and other competing crypto-currencies may be as significant today as the first minted coins of the ancients.
If crypto-currencies are bullshit because, as the author puts it: "...He made this money out of digits. He made it out of nothing...."Then all fiat currencies are bullshits.
What makes crypto-currency worthwhile is that the algorithm keeps it honest and it encourages saving
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#169Money is created as debt out of nothing. The money to pay interest on this debt does not exist. Bitcoin is valuable because it facilitates exchange over the internet. I'm looking forward to the "great winter."
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#170> 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's no question that the author of this article wrote it with linkbait in mind - calling bitcoin a ponzi scheme.
having thought about it - the argument that bitcoin is going to be worth a lot "because there are only 21 million" - we have to consider that bitcoin is just one of "n" virtual currencies.
while bitcoin may be limited, we already have 37 alternatives (at least) and there's no reason another hundred can't be started up within a year.
So, i see there will be a lot of virtual currency flying around, all of it as qualified as bitcoin (sharing similar source code) and the idea that it will all be worth 1,000 a unit (or more) forever just doesn't make sense.