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Why Bitcoin is worse than a Madoff-style Ponzi scheme

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Re: Why Bitcoin is worse than a Madoff-style Ponzi scheme

#121

Post by Geee »

hiq wrote: post #119
Geee wrote: post #117

Earlier quoted context omitted.

It's not beneficial to use money from another country. Managing your own monetary policy and being able to spend without limits is important tool for governments. Currencies are one tool which countries use to compete with each other. Those countries which use US dollar suffer from its inflation, but don't get the benefit of unlimited spending. In other words, inflation in Turkey would fund deficit spending in USA. U…

> Managing your own monetary policy and being able to spend without limits is important tool for governments. Sure, but we're talking about switching to BTC, which doesn't allow this either. > Bitcoin is the only currency which has very high guarantees of its expected monetary inflation. As somebody else pointed out in another thread, bitcoin is either a currency or an asset depending on who you talk to. You mention…

Monetary inflation is the amount of new money that is created, i.e. how much the supply expands. In Bitcoin, inflation schedule is predefined and there's an absolute limit, and these rules can't be changed. This means that if Bitcoin's demand increases, then the price increases. In other currencies, supply will be expanded if demand increases to stabilize the price. This applies to everything else too, like commodities or real estate. Increased price will increase production, until the price corrects to cost of production.

Demand can't really be predicted, but historically we know that if supply expansion is predictably low (like in gold), most people would prefer to save their wealth in that money.

Volatility is expected to decrease in time, making it more practical in short-term transactions.

Re: Why Bitcoin is worse than a Madoff-style Ponzi scheme

#122

Post by jacknews »

ur-whale wrote: post #105
jacknews wrote: post #61

Earlier quoted context omitted.

LOL, you mean shift power to a different (for now) elite. Bitcoin ownership is even more concentrated than the real financial system.

> Bitcoin ownership is even more concentrated than the real financial system. The concentration of Bitcoin ownership and the service that Bitcoin provides to humanity (please do everyone a favor and don't re-post one of the 100 lame arguments present in the thread as to why there isn't any) are completely orthogonal, especially given the fact that a Bitcoin can be divided into 10^8 pieces.

Your argument makes no sense.

I'm not saying crypto is useless, for mainstream activity, though I personally incline toward that conclusion, awaiting proof otherwise.

But I am saying it concentrates wealth, even more than the existing financial system.

How does the very small tradable unit have any bearing on concentration of ownership?

How does 'service to humanity' justify a concentration of wealth, which itself is a dis-service to humanity?

Re: Why Bitcoin is worse than a Madoff-style Ponzi scheme

#123

Post by hiq »

Geee wrote: post #121
hiq wrote: post #119

Earlier quoted context omitted.

> Managing your own monetary policy and being able to spend without limits is important tool for governments. Sure, but we're talking about switching to BTC, which doesn't allow this either. > Bitcoin is the only currency which has very high guarantees of its expected monetary inflation. As somebody else pointed out in another thread, bitcoin is either a currency or an asset depending on who you talk to. You mention…

Monetary inflation is the amount of new money that is created, i.e. how much the supply expands. In Bitcoin, inflation schedule is predefined and there's an absolute limit, and these rules can't be changed. This means that if Bitcoin's demand increases, then the price increases. In other currencies, supply will be expanded if demand increases to stabilize the price. This applies to everything else too, like commoditi…

I thought your were talking about price inflation, but you actually wrote "monetary inflation", my bad. But what's the point of taming monetary inflation if that does nothing for price inflation? I thought that price inflation was the practical consequence we have to deal with, isn't that the case?

> Demand can't really be predicted, but historically we know that if supply expansion is predictably low (like in gold), most people would prefer to save their wealth in that money.

The supply of bitcoins is low, but the supply of bitcoin-like tokens seems limitless. The question is: which pool do we consider? Are BTC and ETH in the same pool? What about other tokens? The same reasoning applies to gold and other metals, but at least you won't come up with a new one on a whim like you can with cryptocurrencies.

Re: Why Bitcoin is worse than a Madoff-style Ponzi scheme

#124

Post by icu »

horsawlarway wrote: post #101
icu wrote: post #89

Earlier quoted context omitted.

OP here. Please refer to the study resources I posted above and please go through them. Yes there is a lot of FUD, FOMO and scammers... but I encourage you to think about cognitive biases and take the time to assess crypto through the lens of a new technology.

> but I encourage you to think about cognitive biases and take the time to assess crypto through the lens of a new technology. So question - if you're so convinced in the technology, why do you need to advocate for me to understand and change my position? If this is clearly a home run, what do you care whether I believe? Or whether the other viewers of this comment thread believe? If this is a ponzi scheme, then your…

Honestly it's in the spirit of discussion and idea exchange that I post on HN. Karma points aren't really worth anything except a proxy for my contribution to the discussion and community.

As for encouraging you study it, it's really because I didn't myself, and I wished I did, that's all.

Take it or leave it, either way you have my best wishes moving forward!

Re: Why Bitcoin is worse than a Madoff-style Ponzi scheme

#125

Post by ashwagary »

anovikov wrote: post #90
ashwagary wrote: post #87

Earlier quoted context omitted.

They can't destroy it, a lot of miners in China continue mining using vpns and proxies.

Well, you can't mine using VPN or proxy because you can't conceal multi-megawatt power consumption that it takes. Prohibition of mining is simply about consumption of electricity which suddenly became in short supply. Crypto is not banned in China and it is not bannable. Mining of course, is.

You can absolutely conceal energy usage, especially in places where large scale manufacturing takes place.

Re: Why Bitcoin is worse than a Madoff-style Ponzi scheme

#126

Post by thereyet »

skohan wrote: post #23
LatteLazy wrote: post #10

Earlier quoted context omitted.

I'm not sure whether crypto is a good or bad thing overall but there are plenty of good uses for it: * In countries with unstable currencies they are useful stores of value (Venezuela, Turkey and Zimbabwe right now). I was in Zim back in 2010 and visited someone's house. It was filled with petrol because he had been paid and had to spend the money before it lost its value so he bought what was available. Bitcoin woul…

It might be worth noting that the wild volatility of cryptocurrencies hurts all of these use-cases.

No post body was provided.

Re: Why Bitcoin is worse than a Madoff-style Ponzi scheme

#127

Post by thereyet »

naruvimama wrote: post #28
LatteLazy wrote: post #10

Earlier quoted context omitted.

I'm not sure whether crypto is a good or bad thing overall but there are plenty of good uses for it: * In countries with unstable currencies they are useful stores of value (Venezuela, Turkey and Zimbabwe right now). I was in Zim back in 2010 and visited someone's house. It was filled with petrol because he had been paid and had to spend the money before it lost its value so he bought what was available. Bitcoin woul…

* It is a store of nothing, in fact it is drain of enormous amounts of electricity and computational power. * I wish it were cheaper or simpler, it was true in its early days but not anymore once there is speculation & "store of value" * I agree that some countries like Venezuela can benefit. In a pure capitalist society one still has to risk their money to buy shares at the minimum. In the case of Bitcoin one only h…

No post body was provided.

Re: Why Bitcoin is worse than a Madoff-style Ponzi scheme

#128

Post by thereyet »

400thecat wrote: post #96
fsflover wrote: post #12

Earlier quoted context omitted.

Crypto helps people in semi-totalitarian regimes to not depend on inflation and be independent on the governments with transactions.

nobody uses bitcoin for transaction anymore It has become pure speculation vehicle

No post body was provided.

Re: Why Bitcoin is worse than a Madoff-style Ponzi scheme

#129

Post by thereyet »

Devasta wrote: post #54
sabellito wrote: post #46

Earlier quoted context omitted.

I don't care about crypto. You comment seems to amount to "I won't argue because you're not rational. The thing you believe in is awful and should cease to exist". Please reconsider.

"I won't argue because you're not rational. The thing you believe in is awful and should cease to exist" is a perfectly fine stance to have about bitcoin and crypto in general. Its causing massive amounts of pollution, global spikes in price of computer parts, exacerbates shortages in silicon and facilitates all sorts of illegal activity from money laundering to ponzi schemes to trading of illegal goods. And for what…

No post body was provided.

Re: Why Bitcoin is worse than a Madoff-style Ponzi scheme

#130

Post by thereyet »

brightstep wrote: post #22
anovikov wrote: post #11

Earlier quoted context omitted.

Well, if crypto is meant to be used as a method of investment, then sorry, nothing which does not generate rent can be a viable method of investment (can sometimes be a method of preserving wealth e.g. gold but even that barely). In this sense, i agree with you. But crypto is also very useful for undermining governments - making them unnecessary. Which is a beneficial thing for all humankind. Whenever government real…

Governments could destroy crypto if they wanted. See China as the most obvious example. A novel technology doesn't stand much of a chance against men with guns.

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