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> the people who start mining early win out, and the people who join later to speculate on the currency have less and less chances of striking it rich. Replace
by tertius 9y ago
> the people who start mining early win out, and the people who join later to speculate on the currency have less and less chances of striking it rich.
Replace "mining" with investing and currency with stock and tada.
That's not a pyramid scheme, that's risk/reward investing 101.
- joosters 9y agoThe difference being that companies are meant to be trying to make money and give that to their investors, whereas cryptocoins are nothing but a string of numbers.
- zenlikethat 9y agoI agree having a company trying to produce revenue is arguably more valuable, but keep in mind cryptocurrency isn't _just_ a string of numbers -- what you're buying into is a massive network of machines verifying your transactions and protecting the system from things like double-spends. Sure, Bitcoin has scaling issues, but there is still an insane amount of computing power backing it, and that isn't changing. I'm not 100% sure I see as much value in Ethereum, for sure -- since throwing that much computing power at verifying programs is more dubious to me, as is the switch to proof of stake.
- DennisP 9y agoEthereum does the same thing as Bitcoin. It's just that you can also have scripts on the network that move money around.
- zenlikethat 9y agoThat's as much a liability as it is an asset -- for instance, https://www.reddit.com/r/ethereum/comments/6eruqb/if_your_exchange_is_related_to/?st=j3gfi7i8&sh=b5673c95 https://www.reddit.com/r/ethereum/comments/6eruqb/if_your_ex... ("QuadrigaCX exchange lost 60000 Ether due to smart contract problems").
- DennisP 9y agoYou have to be careful, but people have gotten a lot better at being careful. The contract used by QuadrigaCX was written last summer, and violated a well-known best practice, which is no longer necessary due to an improvement in Solidity. Human error is always a problem, but these days it's common to hire at least one security auditor for any contract that handles nontrivial amounts of money. (I'm a full-time Solidity dev/auditor.) It's still a little scary, but I'd say it's less scary than safety-critical embedded code.
- tertius 9y agoGold doesn't make money either. Gold isn't as valuable as a commodity for engineering (what's it's actually useful for) as the markets sets its price at. Gold, like fiat currency, like "cryptocoins" are all just stores of value that a market sets a value to.