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To those taking this comment as a joke - it is not a joke. Regardless of the morality/legality of a use, the fact that those are real use cases for the currenc

To those taking this comment as a joke - it is not a joke. Regardless of the morality/legality of a use, the fact that those are real use cases for the currency do give actual value to bitcoin as a currency. Now it's worth noting that "digital gold (speculation)" seems to far surpass ransom+online drugs as the reason for bitcoin to have value.

louwrentius 6y ago
> Now it's worth noting that "digital gold (speculation)" seems to far surpass ransom+online drugs as the reason for bitcoin to have value. That's not really value, nothing is created. It only seems a game of musical chairs, with some ending up with 'lambo money' and the rest just lost money. Terms like ponzi scheme or piramid scheme (it seems to contain elements of both) do apply.
- bawolff 6y ago
  > Terms like ponzi scheme or piramid scheme (it seems to contain elements of both) do apply. How so? Bitcoin doesn't pay people out of the proceeds of other people buying in. Its value is solely a function of demand and scarcity. Sure compare it to beanie babies, tulips or gold. Speculation may be stupid, and it may very well end up with most people losing their money when the bubble collapses. But it doesn't have very much in common with pyramid schemes or ponzi schemes.
  - imtringued 6y ago
    Most cryptocurrency investment schemes basically work like this. Someone creates a cryptocurrency. The creators premine the cryptocurrency and sell the currency at a fixed price for pennies. The early investors try to "shill" their cryptocurrency and market it to as many people as possible. There is an influx of cash and the currency is valued at a few dollars. Early investors sell and late investors sit on a worthless cryptocurrency and the only way for them earn their money back is by marketing the cryptocurrency to even more people and selling it to them. Rinse and repeat.
    - bawolff 6y ago
      Sure, i agree that many of the non-bitcoin altcoins are pump-and-dump schemes. Although lots of financial fraud has similar elements, this seems very much not a ponzi scheme (users arent paid with other users investment and not a pyramid scheme (users aren't explicitly encouraged to recruit new people nor do they get an explicit cut of newbies). Pump and dump seems like an appropriate description of what you are describing. I also don't think that applies to bitcoin, which was the cryptocurrency we were talking about.
  - noxer 6y ago
    It's the other way around. Bitcoin pays miners who keep the network running. It does so by creating bitcoins. Its not peoples money that is used to pay them its indirectly trough inflation. No one cares about that because price gains have been way higher than inflation loses. Also the upper hard cap of 21MM makes people think inflation doesn't exist. Yet it of course exists until the block reward is actually zero. In other words the price has to go up forever doubling at lest every 4 years on average to cover its own running cost with the simultaneously halving reward. It's obviously a scheme that will collapse, it's just designed to possibly last many decades.

louwrentius 6y ago

> Now it's worth noting that "digital gold (speculation)" seems to far surpass ransom+online drugs as the reason for bitcoin to have value. That's not really value, nothing is created. It only seems a game of musical chairs, with some ending up with 'lambo money' and the rest just lost money. Terms like ponzi scheme or piramid scheme (it seems to contain elements of both) do apply.

bawolff 6y ago
> Terms like ponzi scheme or piramid scheme (it seems to contain elements of both) do apply. How so? Bitcoin doesn't pay people out of the proceeds of other people buying in. Its value is solely a function of demand and scarcity. Sure compare it to beanie babies, tulips or gold. Speculation may be stupid, and it may very well end up with most people losing their money when the bubble collapses. But it doesn't have very much in common with pyramid schemes or ponzi schemes.
- imtringued 6y ago
  Most cryptocurrency investment schemes basically work like this. Someone creates a cryptocurrency. The creators premine the cryptocurrency and sell the currency at a fixed price for pennies. The early investors try to "shill" their cryptocurrency and market it to as many people as possible. There is an influx of cash and the currency is valued at a few dollars. Early investors sell and late investors sit on a worthless cryptocurrency and the only way for them earn their money back is by marketing the cryptocurrency to even more people and selling it to them. Rinse and repeat.
  - bawolff 6y ago
    Sure, i agree that many of the non-bitcoin altcoins are pump-and-dump schemes. Although lots of financial fraud has similar elements, this seems very much not a ponzi scheme (users arent paid with other users investment and not a pyramid scheme (users aren't explicitly encouraged to recruit new people nor do they get an explicit cut of newbies). Pump and dump seems like an appropriate description of what you are describing. I also don't think that applies to bitcoin, which was the cryptocurrency we were talking about.
- noxer 6y ago
  It's the other way around. Bitcoin pays miners who keep the network running. It does so by creating bitcoins. Its not peoples money that is used to pay them its indirectly trough inflation. No one cares about that because price gains have been way higher than inflation loses. Also the upper hard cap of 21MM makes people think inflation doesn't exist. Yet it of course exists until the block reward is actually zero. In other words the price has to go up forever doubling at lest every 4 years on average to cover its own running cost with the simultaneously halving reward. It's obviously a scheme that will collapse, it's just designed to possibly last many decades.