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Cryptocurrencies are scam. End. This is very simple. Yes, they are a new kind of scam, a good name suggested is Nakamoto Scheme. https://prestonbyrne.com/2017

by chx 7y ago

Cryptocurrencies are scam. End. This is very simple. Yes, they are a new kind of scam, a good name suggested is Nakamoto Scheme. https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/ https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/ Also notable: https://davidgerard.co.uk/blockchain/2018/04/05/debunking-but-bitcoin-is-like-the-early-internet/ https://davidgerard.co.uk/blockchain/2018/04/05/debunking-bu... which doesn't outright call it a scam but certainly points out > Git gives you pretty much everything offered by the business case for blockchains. The one thing it doesn’t do is add a ridiculously wasteful proof-of-work mechanism for who’s allowed to add transactions to the <del>blockchain</del> repository. Multiple examples of actually useful software branded “blockchain” turn out to be simplified versions of Git. > Git was released in 2005, four years before Bitcoin — none of the good ideas in blockchains are new, and none of the new ideas have turned out to be much good.

dpc_pw 7y ago
What a nonsense you have there. :D
- JoachimSchipper 7y ago
  This is not a high-quality response; please be polite, and point out any actual errors you see.
coralreef 7y ago
Right. I'm going to challenge you to: - prevent or reverse any of my transactions - confiscate my bitcoin, or even find out how much I have You can't, and never will. Some cryptocurrencies are scams. But if you're saying all cryptocurrencies are scams, you're simply saying math and economics are a scam.
- quaquaqua1 7y ago
  Agreed. Certain banks are scams. Certain coins are scams. The technical layer is entirely separated from the business layer.
- untog 7y ago
  "Scam" is a broad term. The technical basis of bitcoin can be 100% solid and it can still be a "scam" in the sense that it's been sold as a get rich quick scheme for speculative investors rather than an actual, day-to-day use currency (given transaction times it'll struggle to ever be that, but I digress)
  - jackcodes 7y ago
    Saying cryptocurrencies are a scam is kind of like saying leggings are a scam because of LuLaRoe.
    - untog 7y ago
      I'd say it depends on percentages. The vast, almost entire majority of leggings are not scams. A notable number of cryptocurrencies are scams.
      - jackcodes 7y ago
        Bitcoin, Ethereum and XRP take up around 80% of total market cap and I’ll class those as legitimate enough to fall in the non-scam category. I’ll also ballpark half of the remaining 20% as not being scams (I know that’s a little debatable too, is a poor business premise a scam for example?), and I’d say that’s not too bad on the whole. If we’re talking about number of projects then I can’t disagree, there’d be no argument.
        Nursie 7y ago
        Most of the activity taking place on them appears to be scams or scam related though, especially as many of the large exchanges appear to either be scams or at least be in on the scams. It's scams all the way down.
        chx 7y ago
        What makes you think Bitcoin, Ethereum and XRP are not scams? That's the entire point of this argument: Bitcoin is a scam. I showed you an article about how there are no legit usages (aside from those that include it out of hype but could be implemented just as well without) and another which shows you it is a digital version of the chain distributor scheme.
- unityByFreedom 7y ago
  Irreversibility of transactions is not a feature I want. If someone wants to rob you of all your bitcoin, they can hold a gun to your head until you give it to them. A bank, on the other hand, has transaction limits. If I buy something online with a credit card and soon after discover it's fraudulent (which has happened to me on multiple occasions), I can reverse that too.
  - commoner 7y ago
    That criticism also applies to cash.
    - tempestn 7y ago
      True, although most people wouldn't hold nearly as much cash as is commonly held in bitcoin.
      - leni536 7y ago
        I guess wallets are called wallets for a reason.
  - mlyle 7y ago
    Note that the property we're talking about isn't really irreversibility of individual transactions. We can come up with whatever policy about what can show up in a ledger, including "undo" transactions. But what we want is that once transactions are recorded to a ledger, that it's not possible to remove that record. This durability is a highly valuable property for financial transactions and other things where non-repudiation is desired. However, it's a possibly scary property, too (what if something copyrighted or illegal ends up in the forever-durable and public ledger?)
  - Lucadg 7y ago
    You'd keep in yourself a small amount of Bitcoin. You'd keep at home a bigger amount. You'd keep in a safe place the rest. Exactly as with cash.
- linkregister 7y ago
  - confiscate my bitcoin, or even find out how much I have Bitcoin's public ledger is especially vulnerable to FBI "follow the money" investigation. Only one end is required to be known, and the entire trail is easily followed. The federal agent who stole a portion of Dread Pirate Roberts' Bitcoin was quickly tracked and prosecuted.
  - jjeaff 7y ago
    Properly implemented "Laundering" services for crypto currency can make follow-the-money effectively useless. The funds are transferred to a wallet, they are mixed with many other coins, and then they are paid out in different sized transactions to the recipient. Assuming you have a busy enough pool, it should be technically untraceable.
    - dingdongding 7y ago
      Just like giant corporate balance sheets?
    - hdfbdtbcdg 7y ago
      Sounds like something where if you offered that as a service you would probably be legally required to Know Your Customer and to keep records...
      - Kuinox 7y ago
        These services does not require manipulating real money. To run the service, it requires a device connected to the internet, that all. You can find a lot of way to host it in a country that don't have these requirements, or to host it anonymously.
        Nursie 7y ago
        Mixers are now a target for law enforcement though, just so you know.
- hudon 7y ago
  transactions are “reversed” every time a chain is abandoned. It happened in 2010 when Satoshi himself called to abandon a chain, again 2013 when Luke and Pieter called miners to abandon a chain, and probably many times since then to fix various bugs. It’s impossible to count how many of those abandoned transactions were successfully replayed on the new chain versus how many were spent elsewhere (ie reversed)
  - chrisco255 7y ago
    Forks aren't abandonment. And at this point, the market determines which chains are abandoned, it's not a single actor that has any sort of control.
    - mosselman 7y ago
      That is like saying that there are no back doors in open source software because anyone can have a look at the source. 'The market' is a handful of powerful miners anyway. As if your 1 vote could do anything about some fork abandonment or whatever. Also, do you monitor the whole network constantly? You have to sleep at some point. You know who does constantly monitor the flow of currency to a somewhat trustworthy degree? Banks and governments do.
      - feanaro 7y ago
        You don't have to monitor constantly, just some time after you make a transaction. Long chain reversals grow exponentially unlikely the longer the chain gets. In practice, this does not seem like a large problem.
      - chrisco255 7y ago
        First of all, you seem to be addressing bitcoin in isolation and not crypto in general. What forces do you think make Bitcoin worth more than ETH or more than Bitcoin Cash? Market forces. Supply and demand. Just like all commodities. These are invisible hand forces that no single person controls at this point. Even if there are varying levels of centralization in the chains themselves, the market decides whether to back ETH or ETC or some mix of both. So, like any decentralized system, the network is monitored in a decentralized manner. The chains themselves have solved for consensus problems. That's the whole thing keeping blockchains going. No, banks don't constantly monitor everything (although admittedly, it's more than ever thanks to technology). Large amounts of cash still flow around the globe. And whether your government is trustworthy depends largely on which of the 195 nations you live in.
- WA 7y ago
  Calling them currrency is already a scam. They are not a currency. They are hardly money (look up the difference yourself), because you mostly can’t buy stuff with it. And for sure, you can’t pay taxes with them. I read a great question here on HN a while back to enthusiasts: If you were the last person in earth to receive coins, would you still like them and endorse them? So many comments can be traced to the idea of becoming richer. Compare this to the Euro: When the Euro was introduced as a currency in the EU in 2001, people gave zero fucks whether they were first to exchange their old currency for the new one or the last.
  - michwill 7y ago
    > you mostly can’t buy stuff with it Sometimes I cannot buy legitimate stuff without them. Just today, I bought some books for which US credit/debit cards refused to work. And I see that every week. > you can’t pay taxes with them https://techcrunch.com/2018/11/25/ohio-becomes-the-first-state-to-accept-bitcoin-for-tax-payments/ https://techcrunch.com/2018/11/25/ohio-becomes-the-first-sta...
    - qnr 7y ago
      I usually don't go out of my way to pay with bitcoin, but recently needed to buy a PSN prepaid card and every website I tried either declined my 2 credit cards and paypal outright or requested some ridiculous verification (record myself on camera holding a passport to my face? To buy a $10 prepaid card? No thanks) In the end I stumbled upon a shop that accepted bitcoin and got my PSN card in the time it took to get one network confirmation.
  - malux85 7y ago
    I buy heaps of stuff with bitcoin. Not drugs or anything illegal, but computer equipment, membership fees, server hosting, domains and 2nd hand goods from friends. And you can pay your taxes with crypto: https://thenextweb.com/hardfork/2019/07/16/canadian-town-pay-taxes-cryptocurrency/ https://thenextweb.com/hardfork/2019/07/16/canadian-town-pay... Nothing is going to replace fiat overnight, but crypto is far from "not a currency"
- pjc50 7y ago
  <shrug> If you leave the keys in a safe and never use them? Yes, they're going to stay there. But as soon as you make a transaction, in or out, the transaction history of those coins is exposed. And as soon as you make an infosec mistake, you're at risk of loss.
JohnJamesRambo 7y ago
If you’ve ever needed to buy something that your government doesn’t want you to or get your money out of a country that doesn’t want you to remove your money you’d have a different view of cryptocurrency. Scam is not how I would classify all of them at all. I’d classify them more as a mechanism of freedom. You may find yourself singing a different tune when the current QE house of cards falls and you want somewhere, anywhere to put your money that is safe and untouched by the financial fraud and usury system we currently call banking. Kin has more in common with banking than crypto. It was just a blatant money grab by a company with low enough morals and the stupidity to do so and think they were above the law and wouldn’t be punished for blatant disregard for securities law.
- DiogenesKynikos 7y ago
  You're talking about the low morals of banks vs. cryptocurrencies, but I feel much safer depositing my savings in a regulated bank than I would converting them into any type of cryptocoin. Is my perception wrong? I understand that in particular cases (e.g., hyperinflation), you may prefer cryptocurrency, but for the vast majority of people, official currencies and regulated banks are much safer and practical.
  - repomies691 7y ago
    > I feel much safer depositing my savings in a regulated bank than I would converting them into any type of cryptocoin. Is my perception wrong? I converted all my fiat back in the days to crypto. I didn't feel safer back then, but later on as the value skyrocketed and I diversified crypto gains to all kinds of assets my comfort level increased very nicely. I still have good stake of crypto, now I wouldn't feel safe not having some amount.
- verinus 7y ago
  I'll classify that as criminal. Given that our government is democratically elected and all laws have a democratic foundation what you call freedom I would call criminal. In that regard cryptocurrencies have a problem.
vadym909 7y ago
Poor Fred Wilson. He tried hard to hawk this one, including a crypto hail mary but evidently there's still some sanity in the private markets!
deleted 7y ago
[deleted]
wmp56 7y ago
> Git was released in 2005, four years before Bitcoin Now I have a suspicion who was that mysterious Satoshi who had remarkably good industry-grade software skills.
- neotek 7y ago
  This timeline is batshit insane enough without Satoshi Nakamoto turning out to be Linus Torvalds.
  - chx 7y ago
    The Paul Le Roux theory is extremely plausible.
me551ah 7y ago
Do Cryptocurrencies provide value and do something that country backed currencies can't? They do have their own advantages and disadvantages, but it purely boils down to how many people trade in it. Take gold for example, people believe that it has value and trade in it. The price of gold is decided on the basis of market forces of demand and supply. Similarly, a cryptocurrency's worth is decided by the demand for it. If enough people trade in it, then it can be used as a bartering currency. Heck, even if enough people decide to use eagle's feathers as a token to buy and sell goods in exchange for, it is valid currency for those set of people. The larger the set, the more accepted the currency.
- Nursie 7y ago
  It's not clear how many people actually do trade in cryptocurrency. The sector is so rife with dodgy activities that any estimates of volume on exchanges should be treated as wholly false.
- michalu 7y ago
  It's funny to watch how these completely illogical arguments gain momentum in crypto community, I start to be suspicious that someone is pushing them on purpose to hype the herd. Gold has superior chemical and physical features, quantum computers are built from gold. One third of the demand comes from jewellery which helps inflate the price, but even without that you hold some of industrial value, just the price would be 1/3 less. No, cryptocurrencies are not a "commodity," "digital gold," "store of value" and they aren't valuable because "hey, dollar has no value." This is all nonsense. When you have a humanitarian catastrophe or a conflict first thing enemy does is cut out the energy. Bitcoins are useless. Physical gold can allow you to travel out with your family. Oil will have value, antibiotics, food, guns, jewellery like Rolex will have some value. These are commodities. Yesterday I had to wait one day for my transaction because my gas fee wasn't high enough. Lost 10% too. I get cross-border payments that are instant and without a fee and volatility. While I see many interesting and even exciting use-cases for cryptocurrencies and even more for blockchain I'm not too bullish on the 'asset' part.
  - Bantros 7y ago
thefj 7y ago
Cryptocurrencies are not a scam. Doubly double End. This is very simple. But seriously, sure some people just push blockchain stuff to get money from investors. But I can buy drugs using Bitcoin. I can't buy drugs using git. So there's probably a difference between them.
michwill 7y ago
Sorry, but this looks like a completely uneducated opinion. There were many attempts to create virtual money which cannot be shit down, and all of them dated before Bitcoin failed due to government intervention. Bitcoin solved that, and the simplest solution was the wasteful proof of work. Of course, when someone is using the same principle for something centrally controlled, which can be done by a database, that is a different story.
- heavenlyblue 7y ago
  You know, my first foray into the world of Big Corpo people was when I met this guy studying at <pretentious arts uni in London>. He was looking for ways to use blockchain to help regions with unstable currencies. Well, he was doing his Ph.D, actually on that topic. So he would approach people and suggest they all meet up and have this think-tank somewhere in North London. Now imagine you've got about 20-30 people sitting in the same room: and they are all engineers, regional managers, financiers. Not a single person has _any_ idea what blockchain is. They were all meeting weekly to have this hours-long discussion about how they could possibly apply this thing blockchain to solving issues in the third world countries. > There were many attempts to create virtual money which cannot be shit down, and all of them dated before Bitcoin failed due to government intervention. Bitcoin solved that, and the simplest solution was the wasteful proof of work. One of his ideas was to create virtual money. But they forget that _secure_ proof-of-work-based money would require the same amount of initial investment (mining hardware) as if you simply went and bought several tons of gold and then issued a currency supported by that gold.
  - spurdoman77 7y ago
    Bitcoin didnt require initial investments of mining hardware, initially it was mined with normal computers. Mining hardware is more like a running cost that goes up with usage/value.
    - saalweachter 7y ago
      The specialized mining hardware is a red herring. The security of the Bitcoin network isn't a function of its hashrate or the number of nodes, though these things correlate; it's a function of the cost of running it. Regardless of whether the network is run on specialized hardware, old desktops, or TI-83s, the network is only secure so long as it costs enough to run that any motivated attacker would have to spend more money than they can leverage to attack it.
Janeman544 7y ago
This is purely idiotic opinion and should not have a place on a forum like HN of all places. A lot of things like Linux or Open Office started purely out of hardwork of handful passionate people. Most of those people did not make much money in the process either but the y were purely driven by the joy of building something interesting. THAT is the nerd culture. Bitcoin idea was floated by and contributed to by many folks who were not interested in making money but rather in solving interesting problems. Cryptocurrency is not a very hard tech but anyone remotely into tech will be able to appreciate all the theoretical and practical work that has gone into it. Now, people engaging in bitcoin trading thinking it will make them filthy rich might be stupid but then that does not make the technology or its creators a scam.
blobs 7y ago
> Cryptocurrencies are scam. End. This is very simple. I am afraid your thoughts are very(too) simple. End.
rolltiide 7y ago
they are misnomers, which is the crux of one of your actual criticisms as they are not yet currencies although their peer to peer payment feature does work very well if you want to use it right now, I was curious if we would find common ground so I’m glad we did But regarding using them I am very content using minuscule amounts of them to store computations on other people’s computers I really like the redundancy and so many witnesses, but thats just my use case. I find the excess holdings and speculative use cases are wrong, for most people, but without their greed the database and computational log wouldn’t be viable
neotek 7y ago
Is it fair to call it a Nakamoto Scheme? "He" published a paper and wrote the earliest version of some software, wouldn't it be better to call it a Pincoin Scheme or similar?
- jmkni 7y ago
  A Wright scheme?
buboard 7y ago
Well, if we are going for generalizations, everything is a scam, until it isn't
teekert 7y ago
For the first time man creates something digital that cannot be copied. chx: Scam!
DINKDINK 7y ago
Do you have a background in distributed systems? In the same why the common advice with cryptography is, "one can build cipher unbreakable to the creator but not the world", the same way too "one can create a 'blockchain' that's unbreakable to the creator but not the world". Git cannot provide byzantine fault tolerance. The fault tolerance it can provide is costly in human time. Senior Engineer: Hi, I'm new here and have built a better blockchain. Let's use a chain of hash digest. It's way more efficient than PoW. It only costs .001/tx CTO: But we need decentralized time stamping not the smaller set of always-online tamper detection. SE: It's ok we'll be able to tell if the state updates change by monitoring the chain of hash digests. :> [Months Later] SE: Well, some attackers knocked our machines offline. CTO: How do you know that the state updates between when the attack happened and when you got back online are valid and uncontested? You built some stupid slashing mechanism and if we publish invalid state our business goes under. SE: We'll I'll have to go in to audit the logs, hopefully find some other people who have logs, and write software to see if maybe we can detect anything. CTO: Isn't that going to blow up your transaction costs? SE: I estimate 30k in total costs to do the audit. CTO: so over our 800k customers that'll increase your tx costs to .038/tx, your hash-digest solution doesn't seem to be a cheaper alternative. SE: I'm quitting to launch an ICO CTO: Thank god. Basically all the ICOs --Kik included-- are fraud: they won't be able to achieve what they claim to be able to do (governed by unavoidable physics, CS, cryptography, DS constraints) and punters have a myopic belief of what they can do. They gain market share by publicizing Bitcoin's very specific limitation. Bitcoin continues to chug along, is very clear about what it can and cannot do. It's painful to have an appreciation for DS and a view into the cryptocurrency space, in the same way it's painful for a IETF network engineer to have the internet ossify around TCP and UDP. Yes there are drastically better CS primitives to engineer these systems with but the switching costs (social and economic) of transitioning a network are higher than the benefits.
- pjc50 7y ago
  You don't need byzantine fault tolerance within an organization. You need at most regular signing. For an example of how this works in the real world, consider the French NF525 system where immutable transaction auditing is legally required. Unsurprisingly, it's not done with blockchain proof-of-waste. e.g. https://support.mindbodyonline.com/s/article/Best-practices-for-clients-in-France-NF525-Certification?language=en_US https://support.mindbodyonline.com/s/article/Best-practices-...
bitxbitxbitcoin 7y ago
If you know anything about the space, you'd know that Nakamoto Scheme is a complete misnomer.
tuesdayrain 7y ago
It's amusing to see such an uneducated statement be the top comment in a thread on HN. Apparently the quality isn't what it used to be. It's blatantly disengenuous to say git gives you everything offered by blockchains.

by chx 7y ago

dpc_pw 7y ago

What a nonsense you have there. :D

JoachimSchipper 7y ago
This is not a high-quality response; please be polite, and point out any actual errors you see.

coralreef 7y ago

Right. I'm going to challenge you to: - prevent or reverse any of my transactions - confiscate my bitcoin, or even find out how much I have You can't, and never will. Some cryptocurrencies are scams. But if you're saying all cryptocurrencies are scams, you're simply saying math and economics are a scam.

quaquaqua1 7y ago
Agreed. Certain banks are scams. Certain coins are scams. The technical layer is entirely separated from the business layer.
untog 7y ago
"Scam" is a broad term. The technical basis of bitcoin can be 100% solid and it can still be a "scam" in the sense that it's been sold as a get rich quick scheme for speculative investors rather than an actual, day-to-day use currency (given transaction times it'll struggle to ever be that, but I digress)
- jackcodes 7y ago
  Saying cryptocurrencies are a scam is kind of like saying leggings are a scam because of LuLaRoe.
  - untog 7y ago
    I'd say it depends on percentages. The vast, almost entire majority of leggings are not scams. A notable number of cryptocurrencies are scams.
    - jackcodes 7y ago
      Bitcoin, Ethereum and XRP take up around 80% of total market cap and I’ll class those as legitimate enough to fall in the non-scam category. I’ll also ballpark half of the remaining 20% as not being scams (I know that’s a little debatable too, is a poor business premise a scam for example?), and I’d say that’s not too bad on the whole. If we’re talking about number of projects then I can’t disagree, there’d be no argument.
      - Nursie 7y ago
        Most of the activity taking place on them appears to be scams or scam related though, especially as many of the large exchanges appear to either be scams or at least be in on the scams. It's scams all the way down.
      - chx 7y ago
        What makes you think Bitcoin, Ethereum and XRP are not scams? That's the entire point of this argument: Bitcoin is a scam. I showed you an article about how there are no legit usages (aside from those that include it out of hype but could be implemented just as well without) and another which shows you it is a digital version of the chain distributor scheme.
unityByFreedom 7y ago
Irreversibility of transactions is not a feature I want. If someone wants to rob you of all your bitcoin, they can hold a gun to your head until you give it to them. A bank, on the other hand, has transaction limits. If I buy something online with a credit card and soon after discover it's fraudulent (which has happened to me on multiple occasions), I can reverse that too.
- commoner 7y ago
  That criticism also applies to cash.
  - tempestn 7y ago
    True, although most people wouldn't hold nearly as much cash as is commonly held in bitcoin.
    - leni536 7y ago
      I guess wallets are called wallets for a reason.
- mlyle 7y ago
  Note that the property we're talking about isn't really irreversibility of individual transactions. We can come up with whatever policy about what can show up in a ledger, including "undo" transactions. But what we want is that once transactions are recorded to a ledger, that it's not possible to remove that record. This durability is a highly valuable property for financial transactions and other things where non-repudiation is desired. However, it's a possibly scary property, too (what if something copyrighted or illegal ends up in the forever-durable and public ledger?)
- Lucadg 7y ago
  You'd keep in yourself a small amount of Bitcoin. You'd keep at home a bigger amount. You'd keep in a safe place the rest. Exactly as with cash.
linkregister 7y ago
- confiscate my bitcoin, or even find out how much I have Bitcoin's public ledger is especially vulnerable to FBI "follow the money" investigation. Only one end is required to be known, and the entire trail is easily followed. The federal agent who stole a portion of Dread Pirate Roberts' Bitcoin was quickly tracked and prosecuted.
- jjeaff 7y ago
  Properly implemented "Laundering" services for crypto currency can make follow-the-money effectively useless. The funds are transferred to a wallet, they are mixed with many other coins, and then they are paid out in different sized transactions to the recipient. Assuming you have a busy enough pool, it should be technically untraceable.
  - dingdongding 7y ago
    Just like giant corporate balance sheets?
  - hdfbdtbcdg 7y ago
    Sounds like something where if you offered that as a service you would probably be legally required to Know Your Customer and to keep records...
    - Kuinox 7y ago
      These services does not require manipulating real money. To run the service, it requires a device connected to the internet, that all. You can find a lot of way to host it in a country that don't have these requirements, or to host it anonymously.
      - Nursie 7y ago
        Mixers are now a target for law enforcement though, just so you know.
hudon 7y ago
transactions are “reversed” every time a chain is abandoned. It happened in 2010 when Satoshi himself called to abandon a chain, again 2013 when Luke and Pieter called miners to abandon a chain, and probably many times since then to fix various bugs. It’s impossible to count how many of those abandoned transactions were successfully replayed on the new chain versus how many were spent elsewhere (ie reversed)
- chrisco255 7y ago
  Forks aren't abandonment. And at this point, the market determines which chains are abandoned, it's not a single actor that has any sort of control.
  - mosselman 7y ago
    That is like saying that there are no back doors in open source software because anyone can have a look at the source. 'The market' is a handful of powerful miners anyway. As if your 1 vote could do anything about some fork abandonment or whatever. Also, do you monitor the whole network constantly? You have to sleep at some point. You know who does constantly monitor the flow of currency to a somewhat trustworthy degree? Banks and governments do.
    - feanaro 7y ago
      You don't have to monitor constantly, just some time after you make a transaction. Long chain reversals grow exponentially unlikely the longer the chain gets. In practice, this does not seem like a large problem.
    - chrisco255 7y ago
      First of all, you seem to be addressing bitcoin in isolation and not crypto in general. What forces do you think make Bitcoin worth more than ETH or more than Bitcoin Cash? Market forces. Supply and demand. Just like all commodities. These are invisible hand forces that no single person controls at this point. Even if there are varying levels of centralization in the chains themselves, the market decides whether to back ETH or ETC or some mix of both. So, like any decentralized system, the network is monitored in a decentralized manner. The chains themselves have solved for consensus problems. That's the whole thing keeping blockchains going. No, banks don't constantly monitor everything (although admittedly, it's more than ever thanks to technology). Large amounts of cash still flow around the globe. And whether your government is trustworthy depends largely on which of the 195 nations you live in.
WA 7y ago
Calling them currrency is already a scam. They are not a currency. They are hardly money (look up the difference yourself), because you mostly can’t buy stuff with it. And for sure, you can’t pay taxes with them. I read a great question here on HN a while back to enthusiasts: If you were the last person in earth to receive coins, would you still like them and endorse them? So many comments can be traced to the idea of becoming richer. Compare this to the Euro: When the Euro was introduced as a currency in the EU in 2001, people gave zero fucks whether they were first to exchange their old currency for the new one or the last.
- michwill 7y ago
  > you mostly can’t buy stuff with it Sometimes I cannot buy legitimate stuff without them. Just today, I bought some books for which US credit/debit cards refused to work. And I see that every week. > you can’t pay taxes with them https://techcrunch.com/2018/11/25/ohio-becomes-the-first-state-to-accept-bitcoin-for-tax-payments/ https://techcrunch.com/2018/11/25/ohio-becomes-the-first-sta...
  - qnr 7y ago
    I usually don't go out of my way to pay with bitcoin, but recently needed to buy a PSN prepaid card and every website I tried either declined my 2 credit cards and paypal outright or requested some ridiculous verification (record myself on camera holding a passport to my face? To buy a $10 prepaid card? No thanks) In the end I stumbled upon a shop that accepted bitcoin and got my PSN card in the time it took to get one network confirmation.
- malux85 7y ago
  I buy heaps of stuff with bitcoin. Not drugs or anything illegal, but computer equipment, membership fees, server hosting, domains and 2nd hand goods from friends. And you can pay your taxes with crypto: https://thenextweb.com/hardfork/2019/07/16/canadian-town-pay-taxes-cryptocurrency/ https://thenextweb.com/hardfork/2019/07/16/canadian-town-pay... Nothing is going to replace fiat overnight, but crypto is far from "not a currency"
pjc50 7y ago
<shrug> If you leave the keys in a safe and never use them? Yes, they're going to stay there. But as soon as you make a transaction, in or out, the transaction history of those coins is exposed. And as soon as you make an infosec mistake, you're at risk of loss.

JohnJamesRambo 7y ago

If you’ve ever needed to buy something that your government doesn’t want you to or get your money out of a country that doesn’t want you to remove your money you’d have a different view of cryptocurrency. Scam is not how I would classify all of them at all. I’d classify them more as a mechanism of freedom. You may find yourself singing a different tune when the current QE house of cards falls and you want somewhere, anywhere to put your money that is safe and untouched by the financial fraud and usury system we currently call banking. Kin has more in common with banking than crypto. It was just a blatant money grab by a company with low enough morals and the stupidity to do so and think they were above the law and wouldn’t be punished for blatant disregard for securities law.

DiogenesKynikos 7y ago
You're talking about the low morals of banks vs. cryptocurrencies, but I feel much safer depositing my savings in a regulated bank than I would converting them into any type of cryptocoin. Is my perception wrong? I understand that in particular cases (e.g., hyperinflation), you may prefer cryptocurrency, but for the vast majority of people, official currencies and regulated banks are much safer and practical.
- repomies691 7y ago
  > I feel much safer depositing my savings in a regulated bank than I would converting them into any type of cryptocoin. Is my perception wrong? I converted all my fiat back in the days to crypto. I didn't feel safer back then, but later on as the value skyrocketed and I diversified crypto gains to all kinds of assets my comfort level increased very nicely. I still have good stake of crypto, now I wouldn't feel safe not having some amount.
verinus 7y ago
I'll classify that as criminal. Given that our government is democratically elected and all laws have a democratic foundation what you call freedom I would call criminal. In that regard cryptocurrencies have a problem.

vadym909 7y ago

Poor Fred Wilson. He tried hard to hawk this one, including a crypto hail mary but evidently there's still some sanity in the private markets!

deleted 7y ago

[deleted]

wmp56 7y ago

> Git was released in 2005, four years before Bitcoin Now I have a suspicion who was that mysterious Satoshi who had remarkably good industry-grade software skills.

neotek 7y ago
This timeline is batshit insane enough without Satoshi Nakamoto turning out to be Linus Torvalds.
- chx 7y ago
  The Paul Le Roux theory is extremely plausible.

me551ah 7y ago

Do Cryptocurrencies provide value and do something that country backed currencies can't? They do have their own advantages and disadvantages, but it purely boils down to how many people trade in it. Take gold for example, people believe that it has value and trade in it. The price of gold is decided on the basis of market forces of demand and supply. Similarly, a cryptocurrency's worth is decided by the demand for it. If enough people trade in it, then it can be used as a bartering currency. Heck, even if enough people decide to use eagle's feathers as a token to buy and sell goods in exchange for, it is valid currency for those set of people. The larger the set, the more accepted the currency.

Nursie 7y ago
It's not clear how many people actually do trade in cryptocurrency. The sector is so rife with dodgy activities that any estimates of volume on exchanges should be treated as wholly false.
michalu 7y ago
It's funny to watch how these completely illogical arguments gain momentum in crypto community, I start to be suspicious that someone is pushing them on purpose to hype the herd. Gold has superior chemical and physical features, quantum computers are built from gold. One third of the demand comes from jewellery which helps inflate the price, but even without that you hold some of industrial value, just the price would be 1/3 less. No, cryptocurrencies are not a "commodity," "digital gold," "store of value" and they aren't valuable because "hey, dollar has no value." This is all nonsense. When you have a humanitarian catastrophe or a conflict first thing enemy does is cut out the energy. Bitcoins are useless. Physical gold can allow you to travel out with your family. Oil will have value, antibiotics, food, guns, jewellery like Rolex will have some value. These are commodities. Yesterday I had to wait one day for my transaction because my gas fee wasn't high enough. Lost 10% too. I get cross-border payments that are instant and without a fee and volatility. While I see many interesting and even exciting use-cases for cryptocurrencies and even more for blockchain I'm not too bullish on the 'asset' part.
- Bantros 7y ago

thefj 7y ago

Cryptocurrencies are not a scam. Doubly double End. This is very simple. But seriously, sure some people just push blockchain stuff to get money from investors. But I can buy drugs using Bitcoin. I can't buy drugs using git. So there's probably a difference between them.

michwill 7y ago

Sorry, but this looks like a completely uneducated opinion. There were many attempts to create virtual money which cannot be shit down, and all of them dated before Bitcoin failed due to government intervention. Bitcoin solved that, and the simplest solution was the wasteful proof of work. Of course, when someone is using the same principle for something centrally controlled, which can be done by a database, that is a different story.

heavenlyblue 7y ago
You know, my first foray into the world of Big Corpo people was when I met this guy studying at <pretentious arts uni in London>. He was looking for ways to use blockchain to help regions with unstable currencies. Well, he was doing his Ph.D, actually on that topic. So he would approach people and suggest they all meet up and have this think-tank somewhere in North London. Now imagine you've got about 20-30 people sitting in the same room: and they are all engineers, regional managers, financiers. Not a single person has _any_ idea what blockchain is. They were all meeting weekly to have this hours-long discussion about how they could possibly apply this thing blockchain to solving issues in the third world countries. > There were many attempts to create virtual money which cannot be shit down, and all of them dated before Bitcoin failed due to government intervention. Bitcoin solved that, and the simplest solution was the wasteful proof of work. One of his ideas was to create virtual money. But they forget that _secure_ proof-of-work-based money would require the same amount of initial investment (mining hardware) as if you simply went and bought several tons of gold and then issued a currency supported by that gold.
- spurdoman77 7y ago
  Bitcoin didnt require initial investments of mining hardware, initially it was mined with normal computers. Mining hardware is more like a running cost that goes up with usage/value.
  - saalweachter 7y ago
    The specialized mining hardware is a red herring. The security of the Bitcoin network isn't a function of its hashrate or the number of nodes, though these things correlate; it's a function of the cost of running it. Regardless of whether the network is run on specialized hardware, old desktops, or TI-83s, the network is only secure so long as it costs enough to run that any motivated attacker would have to spend more money than they can leverage to attack it.

Janeman544 7y ago

This is purely idiotic opinion and should not have a place on a forum like HN of all places. A lot of things like Linux or Open Office started purely out of hardwork of handful passionate people. Most of those people did not make much money in the process either but the y were purely driven by the joy of building something interesting. THAT is the nerd culture. Bitcoin idea was floated by and contributed to by many folks who were not interested in making money but rather in solving interesting problems. Cryptocurrency is not a very hard tech but anyone remotely into tech will be able to appreciate all the theoretical and practical work that has gone into it. Now, people engaging in bitcoin trading thinking it will make them filthy rich might be stupid but then that does not make the technology or its creators a scam.

blobs 7y ago

> Cryptocurrencies are scam. End. This is very simple. I am afraid your thoughts are very(too) simple. End.

rolltiide 7y ago

they are misnomers, which is the crux of one of your actual criticisms as they are not yet currencies although their peer to peer payment feature does work very well if you want to use it right now, I was curious if we would find common ground so I’m glad we did But regarding using them I am very content using minuscule amounts of them to store computations on other people’s computers I really like the redundancy and so many witnesses, but thats just my use case. I find the excess holdings and speculative use cases are wrong, for most people, but without their greed the database and computational log wouldn’t be viable

neotek 7y ago

Is it fair to call it a Nakamoto Scheme? "He" published a paper and wrote the earliest version of some software, wouldn't it be better to call it a Pincoin Scheme or similar?

jmkni 7y ago
A Wright scheme?

buboard 7y ago

Well, if we are going for generalizations, everything is a scam, until it isn't

teekert 7y ago

For the first time man creates something digital that cannot be copied. chx: Scam!

DINKDINK 7y ago

Do you have a background in distributed systems? In the same why the common advice with cryptography is, "one can build cipher unbreakable to the creator but not the world", the same way too "one can create a 'blockchain' that's unbreakable to the creator but not the world". Git cannot provide byzantine fault tolerance. The fault tolerance it can provide is costly in human time. Senior Engineer: Hi, I'm new here and have built a better blockchain. Let's use a chain of hash digest. It's way more efficient than PoW. It only costs .001/tx CTO: But we need decentralized time stamping not the smaller set of always-online tamper detection. SE: It's ok we'll be able to tell if the state updates change by monitoring the chain of hash digests. :> [Months Later] SE: Well, some attackers knocked our machines offline. CTO: How do you know that the state updates between when the attack happened and when you got back online are valid and uncontested? You built some stupid slashing mechanism and if we publish invalid state our business goes under. SE: We'll I'll have to go in to audit the logs, hopefully find some other people who have logs, and write software to see if maybe we can detect anything. CTO: Isn't that going to blow up your transaction costs? SE: I estimate 30k in total costs to do the audit. CTO: so over our 800k customers that'll increase your tx costs to .038/tx, your hash-digest solution doesn't seem to be a cheaper alternative. SE: I'm quitting to launch an ICO CTO: Thank god. Basically all the ICOs --Kik included-- are fraud: they won't be able to achieve what they claim to be able to do (governed by unavoidable physics, CS, cryptography, DS constraints) and punters have a myopic belief of what they can do. They gain market share by publicizing Bitcoin's very specific limitation. Bitcoin continues to chug along, is very clear about what it can and cannot do. It's painful to have an appreciation for DS and a view into the cryptocurrency space, in the same way it's painful for a IETF network engineer to have the internet ossify around TCP and UDP. Yes there are drastically better CS primitives to engineer these systems with but the switching costs (social and economic) of transitioning a network are higher than the benefits.

pjc50 7y ago
You don't need byzantine fault tolerance within an organization. You need at most regular signing. For an example of how this works in the real world, consider the French NF525 system where immutable transaction auditing is legally required. Unsurprisingly, it's not done with blockchain proof-of-waste. e.g. https://support.mindbodyonline.com/s/article/Best-practices-for-clients-in-France-NF525-Certification?language=en_US https://support.mindbodyonline.com/s/article/Best-practices-...

bitxbitxbitcoin 7y ago

If you know anything about the space, you'd know that Nakamoto Scheme is a complete misnomer.

tuesdayrain 7y ago

It's amusing to see such an uneducated statement be the top comment in a thread on HN. Apparently the quality isn't what it used to be. It's blatantly disengenuous to say git gives you everything offered by blockchains.