Bitcoins: The Second Biggest Ponzi Scheme in History • Hacker News Board

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#171

Post by 3pt14159 » Sun, Dec 01, 2013, 4:20 PM UTC

salient wrote: post #73

nwh wrote: post #41

Earlier quoted context omitted.

A cryptocurrency based on CPUs is just fodder for Botnet herders, like Bitcoin was for quite a period. Amusingly, that was Litecoins original call to action, "GPUs are too centralised, we can only be CPU mined!", except that they implemented scrypt very badly. > I'd rather have that, than a few groups of people or governments owning a ton of ASIC's, or perhaps a few very expensive quantum computers in the future, tha…

Yes, I realize everyone with huge datacenters are a huge threat, too, but I still don't think it's as big of a threat as the alternative. Can the NSA own more than half of the world's CPU performance? I don't think so. Could they own 10-100 quantum computers that can mine at say 1 PH/s each? Definitely. It would be much more cost-effective for them , while prohibitively expensive for everyone else (a D-WAVE goes for…

Dude the NSA have their own fucking fabs. You can't outrun them on ops.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#172

Post by ashray » Sun, Dec 01, 2013, 4:21 PM UTC

parasubvert wrote: post #155

ashray wrote: post #74

Earlier quoted context omitted.

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 su…

How many of those 'requirements' are because of powerful entities abusing the system?

What are the forces that have caused those requirements to arise with traditional currencies?

Did you mean inflationary spiral for Southern Europe? Or are prices for things dropping there right now? Not sure.. But again, a lot of what happens is because of constantly 'hacking' the system (raise the debt ceiling, print more money, etc.). Using that as the norm and presenting an argument against the 'hack ability' of the new system seems flawed. Maybe there needs to be better research into what happens, why it happens, and how it can be prevented. Inflationary currency most likely isn't the right answer considering the issues it has caused so far... Deflationary may not be either.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#173

Post by tsotha » Sun, Dec 01, 2013, 4:22 PM UTC

berberous wrote: post #18

This 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…

>Right now, the truth is that a negligible percentage of Bitcoin users care about its use as a currency (with the biggest exception being silk road type illegal uses). Almost everyone is focused on the price appreciation, and when that finally falters, it will collapse.

Or people will start using it as currency. That's already happening to some degree - it won't take much to tip it over into a viable currency for everyday use. With the games governments are playing with sovereign currencies, I think it's more likely we'll see the collapse of the RMB, euro, or dollar.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#174

Post by NikolaTesla » Sun, Dec 01, 2013, 4:25 PM UTC

ubernostrum wrote: post #153

NikolaTesla wrote: post #123

Earlier quoted context omitted.

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.

Interesting that the mere mention of "fiat currency" invokes tin-foil hat. Whether Bitcoins can survive the volatility is indeterminate. If it does survive, however, and becomes an alternative to (avert your eyes) fiat currencies, the impact will be far greater than another obscure fiat currency suddenly being used.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#175

Post by sleepyhead » Sun, Dec 01, 2013, 4:26 PM UTC

sjtgraham wrote: post #149

theboywho wrote: post #80

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…

Ad hominem.

"Hitler is correct in this speech" - "He was responsible for killing X million people" "Ad hominem!"

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#176

Post by akjetma » Sun, Dec 01, 2013, 4:26 PM UTC

ubernostrum wrote: post #153

NikolaTesla wrote: post #123

Earlier quoted context omitted.

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.

a fiat currency is just a currency without intrinsic value. it's not a derisive term, you'll find it in any introductory economics textbook.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#177

Post by nimblegorilla » Sun, Dec 01, 2013, 4:26 PM UTC

jervisfm wrote: post #139

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. T…

Honest question: why are bitcoins scarce? I understand that the supply of real bitcoins is limited, but what is preventing all of the other cryptocurrencies from taking off?

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#178

Post by brianmcconnell » Sun, Dec 01, 2013, 4:27 PM UTC

The biggest argument for not investing in Bitcoin is that anyone who is familiar with technology history can see that it is too early to pick a winner. Bitcoin is better compared to something like TCP/IP. The winner is likely to be something derived from it, probably something that hasn't been invented yet.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#179

Post by jjd1103 » Sun, Dec 01, 2013, 4:28 PM UTC

berberous wrote: post #97

netcan wrote: post #59

Earlier quoted context omitted.

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…

Well, obviously there are supposed reasoned justifications for the rise in prices. That's true of probably all bubbles. Humans are less rational creatures, than rationalizing creatures. We like stories that convince ourselves we are behaving rationally. Robert Schiller, the Yale economist and bubble-proponent, suggests diagnosing bubbles based on a checklist-based approach similiar to the way depression or other medi…

"And people like me, who pretend to themselves that they have a reasoned investment thesis, will say fuck it, and cash out in hordes."

That's a pretty accurate summary of what I did 20 minutes ago. I'm actually pretty optimistic about BTC in the long term, just don't want to ride the roller coaster in the short term.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#180

Post by NikolaTesla » Sun, Dec 01, 2013, 4:29 PM UTC

gutnor wrote: post #145

NikolaTesla wrote: post #123

Earlier quoted context omitted.

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.

Thing is Bitcoin fails miserably as a currency TODAY(2013). It currently cannot be used as a currency because of its volatility, unlike other fiat currencies, it cannot be controlled, potentially destroying any economy based on it. ( Think of it, some random panic on the dollar supply would send the value of the dollar spiraling to 100 time its value over the course of 1 year, with absolutely no way the US could do a…

Agreed on your first point.

(no sarcasm intended) Are you saying that a currency that cannot be controlled (e.g. the money supply controlled by something like a federal reserve) is more dangerous than one that is?