Bitcoins: The Second Biggest Ponzi Scheme in History
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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
#2All these arguments apply equally to gold. Also, gold was becoming a money slower because millions of market participants were not one click away from each other to figure out why is this new metal is any good and whether they should make a bet that it will become more and more useful as money.
The truth about USD vs Bitcoin is that Bitcoins you can own and USD you cannot. http://blog.oleganza.com/post/67362431718/you-can-own-bitcoi...
When someone "cashes out" into USD he doesn't really want to cash out in a lot of USD as it's a poor store of value by design. It's controlled, monitored, expensive and leaks like crazy. You can cash out into Maserati, but it's also not a good store of value. Therefore we see that more and more investors remaining with BTC are making a huge bet - a bet on universally accepted money. People who want to cash out quickly do so already without bringing price much down.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#3Something 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 read this story and are now trying to convert your bitcoins to dollars today.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#4Betteridge's law of headlines: any headline asking a question, the answer is "no".
http://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines
VLM's law of economics commentary: anyone describing something as a Ponzi Scheme has no idea what a Ponzi Scheme is and is just trying to baffle/intimidate the reader.
(It might very well be a fraud / scam / ripoff / whatever but it sure as heck isn't a Ponzi Scheme)
This is a disease finance is unusually susceptible to. For a good laugh try to ask any joe 6 pack what a junk bond is, and all you'll get is babble about some hollywood actor said they're bad, or some vaguely anti-capitalist blather. You'll never, ever, get to hear what they actually were or how they fit into the context of finance during that era.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#5He focuses on one usecase of bitcoins, while completely ignoring the other. Yes, bitcoins are being bought with the expectation that their price is going to raise in the future, and this clearly is not sustainable. But they are also being used to transfer money between individuals. There the price fluctuation doesn't matter that much (if the merchant immediately converts into USD).
Lately there have been many people saying bad things about bitcoin. I think those are people who had bitcoin on their radar a few months ago but didn't invest. And now they are just grumpy because they missed the opportunity.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#6This is as good a place as any to ask this question.
Do we actually know how many large mining groups we need to make up 51% of the processing power of the block chain (hopefully that make sense, from my understanding of bitcoin).
There has been a number of changes to the bitcoin protocol, which have been made in a short amount of time and unanimously, from what I can see. That implies to me that bitcoin is in practice much more centralised than we are sometimes lead to believe, and that moving to bitcoin is just switching from one shadowy control group to another.
I would be happy to hear evidence that I am vastly overestimating this problem.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#7The 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 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. The argument seems to be that they can't cash it all out so they are waiting for something. Well, they haven't cashed anything out yet as far as anyone who looks at the block chain can tell. It's already possible to cash out $5-$10MM easily over bitstamp which would represent a fraction of their holdings. Why not do that and make sure your future is taken care of? At least that?
Furthermore, for several years it did not look like bitcoins were going anywhere. However, the people behind it continued to work on it, and still continue to do so, but under much new pressure because suddenly they are evil ponzi dealers.
Applying old school economics and psychology is great, but I must ask this question. What kind of value appreciation did gold see when people suddenly for no reason decided that it was worth a lot? Following this value appreciation did people not use it as a means of exchange as well as a store of value? Why can't bitcoin be thought of as gold 2.0? We started valuing dollars, pounds, euros, airplanes, cars, oil, and those didn't exist for much of human history.
Bitcoin isn't like something we've ever seen before and that includes Ponzi schemes. It may end up crashing and burning and it may end up doing really awesome stuff.
I just wish the naysayers would come up with better researched arguments instead of this crazy witch hunt.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#8Betteridge's law of headlines: any headline asking a question, the answer is "no". http://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines VLM's law of economics commentary: anyone describing something as a Ponzi Scheme has no idea what a Ponzi Scheme is and is just trying to baffle/intimidate the reader. (It might very well be a fraud / scam / ripoff / whatever but it sure as heck isn't a Ponzi Scheme) This is…
This headline doesn't ask any question.
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#9Something 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…
This isn't just the case with BTC.
I live in the UK and generally think in GBP, but if I'm addressing an international audience, I'll usually refer to prices in USD.
(note: I agree with the general sentiment of the article, I'm just saying that people refer to USD because its a true global currency)
Re: Bitcoins: The Second Biggest Ponzi Scheme in History
#10Betteridge's law of headlines: any headline asking a question, the answer is "no". http://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines VLM's law of economics commentary: anyone describing something as a Ponzi Scheme has no idea what a Ponzi Scheme is and is just trying to baffle/intimidate the reader. (It might very well be a fraud / scam / ripoff / whatever but it sure as heck isn't a Ponzi Scheme) This is…
You clearly have no idea who Gary North is.