10 ms·

Is Bitcoin a Scam?

48 points by DrNuke 6y ago

mam2 6y ago
sure why not
martin_a 6y ago
Pretty sure, yes.
kornbattery 6y ago
I think the title is quite misleading. The article says >the City regulator the FSA is concerned that crypto investment firms could be overstating potential payouts or understating the risks from investing in bitcoin and products related to the digital currency. Wouldn't it be better to call it "are cyrpto investment firms a scam?" ?
nikivi 6y ago
Not a scam, just bad tech. If you compare it to say https://nano.org https://nano.org It's understandable though, it was first and drives on the network effects and its name ever since.
- FDSGSG 6y ago
  It's akin to IPv4 and IPv6. IPv4 is obviously the worse tech, but because of the scarcity and network effects the value of IPv4 addresses will keep climbing.
  - mike_d 6y ago
    IPv4 is vastly superior to IPv6. The latter being far too complicated and over designed to have any justification for adoption other than IPv4 scarcity. 20 years later and your average non-engineer "power user" can barely get it working without a ton of handholding.
- magma1983 6y ago
  betamax was better tech than vhs. it's adoption that counts.
  - nikivi 6y ago
    What I don't get though is how people are satisfied paying so much in fees for sending coins. I get that bitcoin isn't really used as a currency but as digital gold. But still, so much money simply wasted. At least considering an exchange like coinbase. Perhaps there is a way to send/buy/sell bitcoin at nearly no cost that I am not aware of.
    - aww_dang 6y ago
      Digital gold is the part I feel least confident in. Gold is inherently useful. BTC maximalists retreated from transaction utility to SoV arguments.
  - habosa 6y ago
    Bitcoin has basically no adoption among people who use cryptocurrency for non-speculative purposes. Privacy-focused coins (Monero, etc) or coins with faster/better ledgers (Ethereum) are much more popular. There was a time when Bitcoin was a promising digital currency! I had some back then, around 2010. This is not that.
    - Ekaros 6y ago
      How much Ethereum is used for actual transactions? All things I hear from it are tech toys/demos and weird financial instruments/gambling...
      - habosa 6y ago
        No idea but if I ever wanted to pay a friend or a business in crypto, that's definitely the coin I'd use. Fast, well-known, and easy to buy and sell.
    - FDSGSG 6y ago
- knuthsat 6y ago
  Well, Bitcoin is a research project. Bitcoin to finally become cash equivalent needs to be untraceable, the transactions shouldn't have known inputs and outputs and energy efficient. AFAIK, a lot of people that worked on Bitcoin found solutions to most problems and some of those solutions were reused in other currencies.
HuwytNashi_015 6y ago
Titles in this format - Is some usually unremarkable X actually radical Y? - have conditioned me to instantly answer "No", sometimes audibly. I think it's the disingenuity masquerading as curiosity. You're not actually pondering that question, I should not expect an insightful dialectical exploration of the topic. You've made your mind up and you're exploiting my open mindedness to trojan your one-sided conclusion in there. Is it time for X to Y? No. Should X be Y? No. Is X actually Y? No.
- dvh 6y ago
  https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headline...
- djeiasbsbo 6y ago
  The same also goes for: "Learn X in Y". People not only learn at a different pace, they also learn in different ways that take shorter or longer. And in most cases, this is just an introduction anyway and in no way enough to really learn X. But I think we're at a point where clickbait has been too normalized. Content creators have to do it to be competitive and get their content seen at all. And consumers have just accepted that. The best example of anti-clickbait I've seen is concluding/explaining the title directly in the thumbnail of a video.
- 2muchcoffeeman 6y ago
  From the Wikipedia article linked below, you’re better off assuming the answer is “yes”. The real answer is that these titles are just click bait and don’t really provide evidence one way or another. A 2016 study of a sample of academic journals that set out to test Betteridge's Law and Hinchliffe's Rule (see below) found that few titles were posed as questions and of those, few were yes/no questions and they were more often answered "yes" in the body of the article rather than "no".[13] A 2018 study of 2,585 articles in four academic journals in the field of ecology similarly found that very few titles were posed as questions at all, with 1.82 percent being wh-questions and 2.15 percent being yes/no questions.[14] Of the yes/no questions, 44 percent were answered "yes", 34 percent "maybe", and only 22 percent were answered "no".[14] In 2015, a study of 26,000 articles from 13 news sites on the World Wide Web, conducted by a data scientist and published on his blog, found that the majority (54 percent) were yes/no questions, which divided into 20 percent "yes" answers, 17 percent "no" answers and 16 percent whose answers he could not determine (all percentages rounded by Linander).[15]
hd4 6y ago
>Is x a scam because I don't understand it/I'm priced out? Uh, no. Though fiat currency is definitely a scam.
- imtringued 6y ago
  Moderate CPI inflation is necessary for a productive economy. Fiat currency also has the nice property of being able to be used as money (payment for goods and services). So no, a well managed fiat currency can be extremely useful.
  - octocop 6y ago
    I like the way you used moderate. There is a reason that you did, and I think that is one of the reasons that bitcoin is thriving.
    - jeltz 6y ago
      But we have moderate inflation in most countries so I do not see you point.
      - lifty 6y ago
        We do have moderate to low CPI inflation in western countries, but we also have high inequality and a young generation that doesn't have any assets. Now, if whether you call that inflation or not, the reality of the matter is that the cheap money situation we are in has led to this situation where we have rampant speculation in stocks, real-estate, crypto assets and any other form of limited supply assets. So I think Bitcoin and the crypto asset class, is here to stay, offering its own unique set of advantages and disadvantages.
        gthaman 6y ago
        CPI is a cooked up government statistic, used in contracts and agreements (including social security) that unconditionally favors the governments position. For example it does not include energy or housing costs. They also add and remove items from the CPI index, to remove ones that inflate and add ones such as consumer electronics that deflate. Check out the chapwood index or a different unbiased inflation metric.
holstvoogd 6y ago
Maybe. It is definitely looks a lot like a ponzi scheme too me. And it is nearly useless and immorally wasteful.
Gosper 6y ago
I have some reservations about Bitcoin but I understand it a heck of a lot better than the reporter interviewed here. That was painful to listen to and a stark reminder of Gell-Mann amnesia. The UK's FCA took the right step in banning consumer investments in crypto derivative products, which isn't remotely the same thing as purchasing the underlying assets without leverage. There's plenty more to nitpick about the simplifications he uses losing fundamental aspects that undergird the system and make it work. It's fascinating to watch naïve journalists and the HN crowd wring their hands year after year about a new technology that enables a cohort of low-trusting individuals and institutions to defect in a game theoretic sense from the unwritten rules of Western society and economics. A possibility that simply didn't exist before, and which Bitcoin first enabled. My gut sense is that if people had a wider world view, grew up with and truly knew people from across the spectrum of humanity, and perhaps were keener students of world history they would hold an appreciation and fascination of Bitcoin rather than reflexively ostriching at new technology that questions the status quo. You don't have to love it or like it, but unemotional fascination is warranted. At any rate I desperately wish the level of discourse on Bitcoin was higher here. It's embarrassing to read HN threads on Bitcoin, arguably fremdscham inducing.
- lifty 6y ago
  Very apt characterisation. It's sad that you got downvoted. I think Bitcoin has managed to stir such a division in people because it hits to the very core of human principles. This is wild speculation (pun intended) but I think that a higher percentage of people that grew in a high trust society find Bitcoin a scam/ponzi, while people that grew up in low trust societies think it's god's work. Different value systems leading do wildly different opinions.
rusk 6y ago
There are scammers on Bitcoin no doubt. When you trade in the crypto space be under no illusion you are swimming with sharks and you don’t have the protections, hard won over many years, that you would have normally. This is something you need to be aware of if you’re using Bitcoin or any other crypto for investment. It’s mightily useful for making payment in a zero-trust environment though.
geraldbauer 6y ago
Yes, Bitcoin is a ponzi (investment fraud). I collect the Best of Bitcoin is a ponzi articles @ https://openblockchains.github.io/bitcoin-ponzi https://openblockchains.github.io/bitcoin-ponzi Learn how the investment fraud works.
- emptysongglass 6y ago
  Isn't literally all of capitalism an enormous ponzi scheme? The older your money (i.e. the earlier you've held it and kept it) the richer you are. Younger people who have grown up after you now face a uphill battle because you the older person have capital you've accumulated earlier. I'd love to be corrected on this but as it is every value system humans participate in appear to be very pyramidal.
  - geraldbauer 6y ago
    See https://www.ic.unicamp.br/~stolfi/bitcoin/2020-12-31-bitcoin-ponzi.html https://www.ic.unicamp.br/~stolfi/bitcoin/2020-12-31-bitcoin... Yes, you are wrong. The US dollar is not a ponzi. To quote from the Bitcoin is a Ponzi article: National currencies too fail to fit the definition, because people do not "invest" in them with the expectation of gain. In fact, governments make their currencies slightly inflationary precisely to discourage hoarding.
    - emptysongglass 6y ago
      I'm not sure we're on the same page here. You may not "invest" in a dollar with the expectation that that dollar will be worth more as 1 dollar than yesterday but people do "collect" money. Given a large enough collection, one can then use then use this as a backing store for other investment vehicles. The end result is the same: an aristocracy of old wealth at the top and the young clambering up their ever-taller ivory towers.
- Ekaros 6y ago
  Ponzi-scheme has very narrow definition. Bitcoin itself doesn't fall under it, though many such schemes have been run on it. It is more of mania or bubble. Not yet popped, but I still believe it is coming. Or maybe just slow deflation when investors have run out...
geraldbauer 6y ago
A little reminder - How to Buy Bitcoin (The CO₂-Friendly Way): 1. Take one $50 bill, five $10 bills, or ten $5 bills (I wouldn't recommend change - stay with paper money). 2. Go to the bathroom. 3. Lift the lid of the loo. 4. Throw money in. 5. Flush down water. Congrats! You just purchased $50 worth of Bitcoin - without fucking the planet! -- Trolly McTrollface Find more best of crypto (bitcoin) quotes @ https://github.com/openblockchains/crypto-quotes https://github.com/openblockchains/crypto-quotes
- 2muchcoffeeman 6y ago
  Doesn’t deserve to be down voted. If the estimates of the energy Bitcoin uses are accurate, then now we have a moral imperative to not use Bitcoin. That could be a really important consideration.
stuaxo 6y ago
- Proof of work is inherently wasteful. - The ever expanding blockchain is wasteful (in storage, computation, network). - Having every transaction recorded forever is the opposite of anonymity ("pseudonymous" - come on!). - The energy usage is insane. - The throughput is way too slow. While there may be an anonymous digital currency that doesn't use a lot of energy, it probably has to be based on something other than proof of work and blockchain. The people that say this is a bit like a pyramid scheme may be onto something. Bitcoins biggest threat may be the decriminalization of drugs, as that is the only use beyond hoarding "HODL"ing right now.
- nivenkos 6y ago
  Yeah, the first and last points are the worst IMO. The others could be worked around maybe, but as long as it takes 3+ hours to carry out a transaction, and the resource requirements for partaking in the network are ever-increasing, I just can't see it ever scaling to be usable.
  - deleted 6y ago
    [deleted]
  - zulln 6y ago
    > The others could be worked around maybe, but as long as it takes 3+ hours to carry out a transaction So does bank transfers though, and we have been able to work around that for quite some time now.
    - tapland 6y ago
      The throughput in banks is orders of magnitudes greater than for Bitcoin. Transactions are carried out instantly and processed at least once daily in huge and super fast batches. You could add a layer for fast transactions to BTC but IIRC it can't handle processing nearly enough of them into the blockchain per day.
    - jpmoral 6y ago
      I keep seeing this type of comment in Bitcoin threads. Is this something people in the Bitcoin space widely believe, that bank transfers are necessarily slow and expensive? Free, near-instant bank transfers have been a thing for a few years now (a decade in the UK IIUC). Or have I completely misunderstood what you were saying?
thecupisblue 6y ago
It's a tech prototype that enabled large-scale gambling. It was an idea for a monetary revolution that got sidetracked by those with large enough capital. You can barely buy bitcoin without an ID and a credit card these days except if you wanna do it insecurely via transacting with an unknown party that contains bitcoins via cash. Why do people evangelize it that much? 1. They want the monetary gains. 2. They are deep into sunk cost fallacy. 3. It fuels their ego by letting them think they understand the topics of distributed computing, encryption and global monetary politics at the same time while. 4 and the rarest. They understand it and are still super delusional about its potential.
- drtillberg 6y ago
  >It's a tech prototype that enabled large-scale gambling. Worse than that. But there is a dimension hinted at in the article that makes this not a good asset either. That is, the fact that a dozen or two large syndicates have deployed specific specialized hardware located in Iceland, Iran, Venezuela, and China etc., is not a reasonable guaranty of the future security of compute and network power in the system. Simply having computer power now linked in a global Internet does not bestow real world power. The U.S., E.U., have strong currencies backed by real world strength. Bitcoin on the other hand is a commercial ledger for drug, fraud, gambling, extortion, and money laundering transactions. It's the modern day Barbary Pirates, or take your pick of any other geographically-centralized pirate community. As pirates learn, when they achieve a sufficient notariety, entity-decentralization ceases to be a true protection. It's been 10 years, Bitcoin still is as useless as it was in 2010, but it steadily is gaining notoriety.
chill1 6y ago
If you have the time, listen to the audio (~25 minutes) embedded in the article. There are reasonable concerns that naive and unsophisticated ("retail") investors will be harmed by cryptocurrencies. However to make the jump to "[the government should ban or regulate it into oblivion]" - this demonstrates an absolute disregard for the rest of the world which does not enjoy the same level of access to the financial tools available to citizens in wealthy nations. Bitcoin and other cryptocurrencies are an experiment. An experiment that is going to continue regardless of any regulations that governments attempt to control it. There is real innovation here, but there are also many scams. It's up to the individual to take responsibility for their own finances. Or outsource that responsibility to companies and institutions in their own locality.
bitcoindrugs 6y ago
1) I have cash and want drugs 2) I go on localbitcoins.com and buy bitcoins from an "independent miner" 3) I use the bitcoins to order drugs from Tor 4) The seller now has bitcoins, but would prefer cash 5) The seller goes on localbitcoins.com, pretends to be a small independent miner and sells their bitcoin for cash I'm happy (I got drugs for my cash), the seller is happy (they got cash for their drugs), localbitcoins.com is very happy (they made a cut on both bitcoin transactions). It's an excellent business model, but I don't understand how localbitcoins and it's ilk are able to stay online.
bos268 6y ago
Bitcoin may not be a scam, but it is certainly a make-believe asset -- maybe the perfect one for our increasingly make-believe reality.
nik_s 6y ago
A minor point about the podcast: Alex Hern misunderstood the process that Craig Wright, the self-processed founder of bitcoin (Satoshi Nakamoto), needed to go through to prove that he was indeed Satoshi. Alex says that Craig needed to "move the first bitcoin ever created", while in reality Craig needed to sign a message with a private key. Because of how bitcoin is made, the very first bitcoin block (the "genesis block") cannot be spent [1]. [1] https://www.investopedia.com/terms/g/genesis-block.asp https://www.investopedia.com/terms/g/genesis-block.asp
- blackrock 6y ago
  On a side note, I’m starting to suspect that Bitcoin, and Satoshi Nakamoto, is an internal NSA job. And Satoshi must be the alias name for some cryptography expert, or experts, inside the NSA itself. Hah, and even if you rearrange the words, its acronym is NSA. Like, Nakamoto SAtoshi. I just noticed that. And maybe the architect behind it, used a Japanese origin name, to throw people off their trail. To pin it to some foreign country, instead of the United States government. After all, who else can keep a big secret like this? And laugh all the way to the bank. While trolling the entire world, at the same time. Some ideas: 1. The Satoshi Nakamoto guy on the message boards, wrote in perfect colloquial American English. Even his sense of humor was American. His grammar was perfect, and similar to a Millennial/Gen-X aged American. Like, he grew up chatting on AIM and ICQ back in the 90s and 00s. And probably on BBS message boards back in the 80s and 90s. 2. Satoshi mined the originating Bitcoins, and they are incredibly valuable now, and worth around $8.8 billion dollars in mid 2020. Who wouldn’t cash out on it, and realize all the gains, or even some of the gains? How about some super secret organization, that specializes in cryptography. And especially an organization that doesn’t immediately need the money. 3. Bitcoin mining is consuming a ton of electricity. Increasing carbon pollution, and depleting natural resources. There is only one other country that is generating so much electricity, that a large percentage of it, goes straight into Bitcoin mining. You can guess for yourself which country this is. I don’t think this was intentional, but maybe a side effect is that it will bankrupt other competitor countries that the USA does not like. 4. Maybe another strategic end goal is to trick others to put their money into Bitcoin, and wait until it becomes very very valuable. Like, 100 or 1000 or 1 million times more valuable than it is today, it’s a very long and patient wait, then the US Federal government will pass a law declaring the Bitcoins to be illegal tender. And will then pass another law to forcefully seize all private Bitcoin assets, like the way cops take candy from a baby, with their Civil Asset Forfeiture policy. Who knows. All this is just fun conjecture. Maybe there really is a Satoshi Nakamoto out there. But, I’d probably believe Santa Claus is real, before I believe that cover story.
blunte 6y ago
Stupid title. Could just as easily say ‘Is Cash a Scam?’ The tech may be far from ideal, but broadly labeling it as a scam is just poor journalism. How people use it can be scammy. How governments regulate it may be scammy (corrupt). But these statements can apply to cash, equities, and any other financial exchange.
tamaharbor 6y ago
Reminds me of the “Those are trading sardines, not eating sardines” punchline.
Temasik 6y ago
yes the crypto industry is one big scam industry
thom 6y ago
When scam becomes self sustaining (even in the face of repeated evidence it’s a scam), is it still a scam? It seems like this is built into the value of Bitcoin at this point. Someone could stand up and say “behold, I am manipulating the price of Bitcoin for my own gain, through nefarious means” and people would just think “well, after the price collapses because of this, someone else is bound to manipulate the price, so it’ll go back up!”
- totalZero 6y ago
  If something (not Bitcoin, but just speaking generally) is a scam, the quality of self-sustainment wouldn't make it any less of a scam. The idea that being able to sustain a scam somehow legitimizes it, is essentially how Bernie Madoff justified his actions. “Everybody thinks the worst of me. The only thing I’m happy about is I was able to help people recover … There’s nothing for me to change from. It’s not like I ever considered myself a bad person.” https://www.politico.com/story/2014/03/bernie-madoff-interview-104838 https://www.politico.com/story/2014/03/bernie-madoff-intervi... "The facts were that the majority of my individual clients were net winners." https://www.cnbc.com/2015/04/07/in-new-emails-madoff-says-fraud-wasnt-so-bad.html https://www.cnbc.com/2015/04/07/in-new-emails-madoff-says-fr...
tmarice 6y ago
The amount of FUD in every Bitcoin-related thread on HN is mind boggling. The network is decentralized, permissionless, pseudonymous and cheap. It is a stable protocol and layer 2 solutions are being built upon it to address the downsides blocking every day use. He who controls the money, controls the world. The control is slipping and the roaches are starting to run around in panic.
- oraphalous 6y ago
  Costly signalling theory is what I'd suggest to all the folks on this thread that struggle to wrap their heads around the wastefulness of it all...
- lxgr 6y ago
  > cheap [citation needed]
- xiphias2 6y ago
  It just means that Bitcoin holders are still early adopters. I have seen Ethereum described as a scam many times for example, but in reality it just makes different tradeoffs than Bitcoin (some of them I like, but with other tradeoffs I'm not comfortable with).
- ivanche 6y ago
  > He who controls the money, controls the world. The control is slipping and the roaches are starting to run around in panic. Well considering that FBI, State of Bulgaria and a guy nobody ever saw (his alleged initials are SN) are 3 largest bitcoin holders I'd say that it's pretty clear who will have the control of the world! Also, world population is around 8 billion. Number of bitcoin wallets is around 65 million, or a whopping 0.8% (not counting probably myriads of people having more than 1 wallet).
blackrock 6y ago
It sounds like regulations are coming. Bitcoin had better buy some nukes to protect itself. It’s about to get a big stick shoved down its throat.
notjes 6y ago
It is a revolutionary black hole for gamblers but also for normal people, enabled by intentional behavior of the global financial institutions. The rug will be pulled from under Bitcoion, and when it happens, the disruption will be revolutionary as well. Until then ride the tiger with caution.
skc 6y ago
I thought this would be a post referencing a recently infamous twitter thread on how Bitcoin is effectively a ponzi scheme https://twitter.com/smdiehl/status/1349307219318345728 https://twitter.com/smdiehl/status/1349307219318345728 Though I wish he hadn't disabled comments
- gthaman 6y ago
  The 'ponzi scheme' argument reeks of desperation when entire generations of Americans are going to witness the greatest ponzi scheme of all time, state sponsored social security, collapse. Hey! look at this (maybe a) truck far off in the distance that might hit you while a different truck is 5 feet away from hitting you from behind.
worik 6y ago
How can bitcoin be anything other than a scam, now. It has no legal, ethical use case. The only reason to buy bitcoin is you hope some bigger fool will buy it from you later. Not quite a pyramid scheme is the best thing anybody can say about it
- worik 6y ago
  Ok. Donating to Wikileaks.
chemmail 6y ago
BTC in itself is not a scam the same way the internet is not a scam, but almost all scams are now internet based. A lot of the altcoins had good intentions, but when money comes in and the incentive of doing good work is not much, but everything else brings in money, means that money starts to corrupt.

Is Bitcoin a Scam?

48 points by DrNuke 6y ago

mam2 6y ago

sure why not

martin_a 6y ago

Pretty sure, yes.

kornbattery 6y ago

I think the title is quite misleading. The article says >the City regulator the FSA is concerned that crypto investment firms could be overstating potential payouts or understating the risks from investing in bitcoin and products related to the digital currency. Wouldn't it be better to call it "are cyrpto investment firms a scam?" ?

nikivi 6y ago

Not a scam, just bad tech. If you compare it to say https://nano.org https://nano.org It's understandable though, it was first and drives on the network effects and its name ever since.

FDSGSG 6y ago
It's akin to IPv4 and IPv6. IPv4 is obviously the worse tech, but because of the scarcity and network effects the value of IPv4 addresses will keep climbing.
- mike_d 6y ago
  IPv4 is vastly superior to IPv6. The latter being far too complicated and over designed to have any justification for adoption other than IPv4 scarcity. 20 years later and your average non-engineer "power user" can barely get it working without a ton of handholding.
magma1983 6y ago
betamax was better tech than vhs. it's adoption that counts.
- nikivi 6y ago
  What I don't get though is how people are satisfied paying so much in fees for sending coins. I get that bitcoin isn't really used as a currency but as digital gold. But still, so much money simply wasted. At least considering an exchange like coinbase. Perhaps there is a way to send/buy/sell bitcoin at nearly no cost that I am not aware of.
  - aww_dang 6y ago
    Digital gold is the part I feel least confident in. Gold is inherently useful. BTC maximalists retreated from transaction utility to SoV arguments.
- habosa 6y ago
  Bitcoin has basically no adoption among people who use cryptocurrency for non-speculative purposes. Privacy-focused coins (Monero, etc) or coins with faster/better ledgers (Ethereum) are much more popular. There was a time when Bitcoin was a promising digital currency! I had some back then, around 2010. This is not that.
  - Ekaros 6y ago
    How much Ethereum is used for actual transactions? All things I hear from it are tech toys/demos and weird financial instruments/gambling...
    - habosa 6y ago
      No idea but if I ever wanted to pay a friend or a business in crypto, that's definitely the coin I'd use. Fast, well-known, and easy to buy and sell.
  - FDSGSG 6y ago
knuthsat 6y ago
Well, Bitcoin is a research project. Bitcoin to finally become cash equivalent needs to be untraceable, the transactions shouldn't have known inputs and outputs and energy efficient. AFAIK, a lot of people that worked on Bitcoin found solutions to most problems and some of those solutions were reused in other currencies.

HuwytNashi_015 6y ago

Titles in this format - Is some usually unremarkable X actually radical Y? - have conditioned me to instantly answer "No", sometimes audibly. I think it's the disingenuity masquerading as curiosity. You're not actually pondering that question, I should not expect an insightful dialectical exploration of the topic. You've made your mind up and you're exploiting my open mindedness to trojan your one-sided conclusion in there. Is it time for X to Y? No. Should X be Y? No. Is X actually Y? No.

dvh 6y ago
https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headline...
djeiasbsbo 6y ago
The same also goes for: "Learn X in Y". People not only learn at a different pace, they also learn in different ways that take shorter or longer. And in most cases, this is just an introduction anyway and in no way enough to really learn X. But I think we're at a point where clickbait has been too normalized. Content creators have to do it to be competitive and get their content seen at all. And consumers have just accepted that. The best example of anti-clickbait I've seen is concluding/explaining the title directly in the thumbnail of a video.
2muchcoffeeman 6y ago
From the Wikipedia article linked below, you’re better off assuming the answer is “yes”. The real answer is that these titles are just click bait and don’t really provide evidence one way or another. A 2016 study of a sample of academic journals that set out to test Betteridge's Law and Hinchliffe's Rule (see below) found that few titles were posed as questions and of those, few were yes/no questions and they were more often answered "yes" in the body of the article rather than "no".[13] A 2018 study of 2,585 articles in four academic journals in the field of ecology similarly found that very few titles were posed as questions at all, with 1.82 percent being wh-questions and 2.15 percent being yes/no questions.[14] Of the yes/no questions, 44 percent were answered "yes", 34 percent "maybe", and only 22 percent were answered "no".[14] In 2015, a study of 26,000 articles from 13 news sites on the World Wide Web, conducted by a data scientist and published on his blog, found that the majority (54 percent) were yes/no questions, which divided into 20 percent "yes" answers, 17 percent "no" answers and 16 percent whose answers he could not determine (all percentages rounded by Linander).[15]

hd4 6y ago

>Is x a scam because I don't understand it/I'm priced out? Uh, no. Though fiat currency is definitely a scam.

imtringued 6y ago
Moderate CPI inflation is necessary for a productive economy. Fiat currency also has the nice property of being able to be used as money (payment for goods and services). So no, a well managed fiat currency can be extremely useful.
- octocop 6y ago
  I like the way you used moderate. There is a reason that you did, and I think that is one of the reasons that bitcoin is thriving.
  - jeltz 6y ago
    But we have moderate inflation in most countries so I do not see you point.
    - lifty 6y ago
      We do have moderate to low CPI inflation in western countries, but we also have high inequality and a young generation that doesn't have any assets. Now, if whether you call that inflation or not, the reality of the matter is that the cheap money situation we are in has led to this situation where we have rampant speculation in stocks, real-estate, crypto assets and any other form of limited supply assets. So I think Bitcoin and the crypto asset class, is here to stay, offering its own unique set of advantages and disadvantages.
      - gthaman 6y ago
        CPI is a cooked up government statistic, used in contracts and agreements (including social security) that unconditionally favors the governments position. For example it does not include energy or housing costs. They also add and remove items from the CPI index, to remove ones that inflate and add ones such as consumer electronics that deflate. Check out the chapwood index or a different unbiased inflation metric.

holstvoogd 6y ago

Maybe. It is definitely looks a lot like a ponzi scheme too me. And it is nearly useless and immorally wasteful.

Gosper 6y ago

I have some reservations about Bitcoin but I understand it a heck of a lot better than the reporter interviewed here. That was painful to listen to and a stark reminder of Gell-Mann amnesia. The UK's FCA took the right step in banning consumer investments in crypto derivative products, which isn't remotely the same thing as purchasing the underlying assets without leverage. There's plenty more to nitpick about the simplifications he uses losing fundamental aspects that undergird the system and make it work. It's fascinating to watch naïve journalists and the HN crowd wring their hands year after year about a new technology that enables a cohort of low-trusting individuals and institutions to defect in a game theoretic sense from the unwritten rules of Western society and economics. A possibility that simply didn't exist before, and which Bitcoin first enabled. My gut sense is that if people had a wider world view, grew up with and truly knew people from across the spectrum of humanity, and perhaps were keener students of world history they would hold an appreciation and fascination of Bitcoin rather than reflexively ostriching at new technology that questions the status quo. You don't have to love it or like it, but unemotional fascination is warranted. At any rate I desperately wish the level of discourse on Bitcoin was higher here. It's embarrassing to read HN threads on Bitcoin, arguably fremdscham inducing.

lifty 6y ago
Very apt characterisation. It's sad that you got downvoted. I think Bitcoin has managed to stir such a division in people because it hits to the very core of human principles. This is wild speculation (pun intended) but I think that a higher percentage of people that grew in a high trust society find Bitcoin a scam/ponzi, while people that grew up in low trust societies think it's god's work. Different value systems leading do wildly different opinions.

rusk 6y ago

There are scammers on Bitcoin no doubt. When you trade in the crypto space be under no illusion you are swimming with sharks and you don’t have the protections, hard won over many years, that you would have normally. This is something you need to be aware of if you’re using Bitcoin or any other crypto for investment. It’s mightily useful for making payment in a zero-trust environment though.

geraldbauer 6y ago

Yes, Bitcoin is a ponzi (investment fraud). I collect the Best of Bitcoin is a ponzi articles @ https://openblockchains.github.io/bitcoin-ponzi https://openblockchains.github.io/bitcoin-ponzi Learn how the investment fraud works.

emptysongglass 6y ago
Isn't literally all of capitalism an enormous ponzi scheme? The older your money (i.e. the earlier you've held it and kept it) the richer you are. Younger people who have grown up after you now face a uphill battle because you the older person have capital you've accumulated earlier. I'd love to be corrected on this but as it is every value system humans participate in appear to be very pyramidal.
- geraldbauer 6y ago
  See https://www.ic.unicamp.br/~stolfi/bitcoin/2020-12-31-bitcoin-ponzi.html https://www.ic.unicamp.br/~stolfi/bitcoin/2020-12-31-bitcoin... Yes, you are wrong. The US dollar is not a ponzi. To quote from the Bitcoin is a Ponzi article: National currencies too fail to fit the definition, because people do not "invest" in them with the expectation of gain. In fact, governments make their currencies slightly inflationary precisely to discourage hoarding.
  - emptysongglass 6y ago
    I'm not sure we're on the same page here. You may not "invest" in a dollar with the expectation that that dollar will be worth more as 1 dollar than yesterday but people do "collect" money. Given a large enough collection, one can then use then use this as a backing store for other investment vehicles. The end result is the same: an aristocracy of old wealth at the top and the young clambering up their ever-taller ivory towers.
Ekaros 6y ago
Ponzi-scheme has very narrow definition. Bitcoin itself doesn't fall under it, though many such schemes have been run on it. It is more of mania or bubble. Not yet popped, but I still believe it is coming. Or maybe just slow deflation when investors have run out...

geraldbauer 6y ago

A little reminder - How to Buy Bitcoin (The CO₂-Friendly Way): 1. Take one $50 bill, five $10 bills, or ten $5 bills (I wouldn't recommend change - stay with paper money). 2. Go to the bathroom. 3. Lift the lid of the loo. 4. Throw money in. 5. Flush down water. Congrats! You just purchased $50 worth of Bitcoin - without fucking the planet! -- Trolly McTrollface Find more best of crypto (bitcoin) quotes @ https://github.com/openblockchains/crypto-quotes https://github.com/openblockchains/crypto-quotes

2muchcoffeeman 6y ago
Doesn’t deserve to be down voted. If the estimates of the energy Bitcoin uses are accurate, then now we have a moral imperative to not use Bitcoin. That could be a really important consideration.

stuaxo 6y ago

- Proof of work is inherently wasteful. - The ever expanding blockchain is wasteful (in storage, computation, network). - Having every transaction recorded forever is the opposite of anonymity ("pseudonymous" - come on!). - The energy usage is insane. - The throughput is way too slow. While there may be an anonymous digital currency that doesn't use a lot of energy, it probably has to be based on something other than proof of work and blockchain. The people that say this is a bit like a pyramid scheme may be onto something. Bitcoins biggest threat may be the decriminalization of drugs, as that is the only use beyond hoarding "HODL"ing right now.

nivenkos 6y ago
Yeah, the first and last points are the worst IMO. The others could be worked around maybe, but as long as it takes 3+ hours to carry out a transaction, and the resource requirements for partaking in the network are ever-increasing, I just can't see it ever scaling to be usable.
- deleted 6y ago
  [deleted]
- zulln 6y ago
  > The others could be worked around maybe, but as long as it takes 3+ hours to carry out a transaction So does bank transfers though, and we have been able to work around that for quite some time now.
  - tapland 6y ago
    The throughput in banks is orders of magnitudes greater than for Bitcoin. Transactions are carried out instantly and processed at least once daily in huge and super fast batches. You could add a layer for fast transactions to BTC but IIRC it can't handle processing nearly enough of them into the blockchain per day.
  - jpmoral 6y ago
    I keep seeing this type of comment in Bitcoin threads. Is this something people in the Bitcoin space widely believe, that bank transfers are necessarily slow and expensive? Free, near-instant bank transfers have been a thing for a few years now (a decade in the UK IIUC). Or have I completely misunderstood what you were saying?

thecupisblue 6y ago

It's a tech prototype that enabled large-scale gambling. It was an idea for a monetary revolution that got sidetracked by those with large enough capital. You can barely buy bitcoin without an ID and a credit card these days except if you wanna do it insecurely via transacting with an unknown party that contains bitcoins via cash. Why do people evangelize it that much? 1. They want the monetary gains. 2. They are deep into sunk cost fallacy. 3. It fuels their ego by letting them think they understand the topics of distributed computing, encryption and global monetary politics at the same time while. 4 and the rarest. They understand it and are still super delusional about its potential.

drtillberg 6y ago
>It's a tech prototype that enabled large-scale gambling. Worse than that. But there is a dimension hinted at in the article that makes this not a good asset either. That is, the fact that a dozen or two large syndicates have deployed specific specialized hardware located in Iceland, Iran, Venezuela, and China etc., is not a reasonable guaranty of the future security of compute and network power in the system. Simply having computer power now linked in a global Internet does not bestow real world power. The U.S., E.U., have strong currencies backed by real world strength. Bitcoin on the other hand is a commercial ledger for drug, fraud, gambling, extortion, and money laundering transactions. It's the modern day Barbary Pirates, or take your pick of any other geographically-centralized pirate community. As pirates learn, when they achieve a sufficient notariety, entity-decentralization ceases to be a true protection. It's been 10 years, Bitcoin still is as useless as it was in 2010, but it steadily is gaining notoriety.

chill1 6y ago

If you have the time, listen to the audio (~25 minutes) embedded in the article. There are reasonable concerns that naive and unsophisticated ("retail") investors will be harmed by cryptocurrencies. However to make the jump to "[the government should ban or regulate it into oblivion]" - this demonstrates an absolute disregard for the rest of the world which does not enjoy the same level of access to the financial tools available to citizens in wealthy nations. Bitcoin and other cryptocurrencies are an experiment. An experiment that is going to continue regardless of any regulations that governments attempt to control it. There is real innovation here, but there are also many scams. It's up to the individual to take responsibility for their own finances. Or outsource that responsibility to companies and institutions in their own locality.

bitcoindrugs 6y ago

1) I have cash and want drugs 2) I go on localbitcoins.com and buy bitcoins from an "independent miner" 3) I use the bitcoins to order drugs from Tor 4) The seller now has bitcoins, but would prefer cash 5) The seller goes on localbitcoins.com, pretends to be a small independent miner and sells their bitcoin for cash I'm happy (I got drugs for my cash), the seller is happy (they got cash for their drugs), localbitcoins.com is very happy (they made a cut on both bitcoin transactions). It's an excellent business model, but I don't understand how localbitcoins and it's ilk are able to stay online.

bos268 6y ago

Bitcoin may not be a scam, but it is certainly a make-believe asset -- maybe the perfect one for our increasingly make-believe reality.

nik_s 6y ago

A minor point about the podcast: Alex Hern misunderstood the process that Craig Wright, the self-processed founder of bitcoin (Satoshi Nakamoto), needed to go through to prove that he was indeed Satoshi. Alex says that Craig needed to "move the first bitcoin ever created", while in reality Craig needed to sign a message with a private key. Because of how bitcoin is made, the very first bitcoin block (the "genesis block") cannot be spent [1]. [1] https://www.investopedia.com/terms/g/genesis-block.asp https://www.investopedia.com/terms/g/genesis-block.asp

blackrock 6y ago
On a side note, I’m starting to suspect that Bitcoin, and Satoshi Nakamoto, is an internal NSA job. And Satoshi must be the alias name for some cryptography expert, or experts, inside the NSA itself. Hah, and even if you rearrange the words, its acronym is NSA. Like, Nakamoto SAtoshi. I just noticed that. And maybe the architect behind it, used a Japanese origin name, to throw people off their trail. To pin it to some foreign country, instead of the United States government. After all, who else can keep a big secret like this? And laugh all the way to the bank. While trolling the entire world, at the same time. Some ideas: 1. The Satoshi Nakamoto guy on the message boards, wrote in perfect colloquial American English. Even his sense of humor was American. His grammar was perfect, and similar to a Millennial/Gen-X aged American. Like, he grew up chatting on AIM and ICQ back in the 90s and 00s. And probably on BBS message boards back in the 80s and 90s. 2. Satoshi mined the originating Bitcoins, and they are incredibly valuable now, and worth around $8.8 billion dollars in mid 2020. Who wouldn’t cash out on it, and realize all the gains, or even some of the gains? How about some super secret organization, that specializes in cryptography. And especially an organization that doesn’t immediately need the money. 3. Bitcoin mining is consuming a ton of electricity. Increasing carbon pollution, and depleting natural resources. There is only one other country that is generating so much electricity, that a large percentage of it, goes straight into Bitcoin mining. You can guess for yourself which country this is. I don’t think this was intentional, but maybe a side effect is that it will bankrupt other competitor countries that the USA does not like. 4. Maybe another strategic end goal is to trick others to put their money into Bitcoin, and wait until it becomes very very valuable. Like, 100 or 1000 or 1 million times more valuable than it is today, it’s a very long and patient wait, then the US Federal government will pass a law declaring the Bitcoins to be illegal tender. And will then pass another law to forcefully seize all private Bitcoin assets, like the way cops take candy from a baby, with their Civil Asset Forfeiture policy. Who knows. All this is just fun conjecture. Maybe there really is a Satoshi Nakamoto out there. But, I’d probably believe Santa Claus is real, before I believe that cover story.

blunte 6y ago

Stupid title. Could just as easily say ‘Is Cash a Scam?’ The tech may be far from ideal, but broadly labeling it as a scam is just poor journalism. How people use it can be scammy. How governments regulate it may be scammy (corrupt). But these statements can apply to cash, equities, and any other financial exchange.

tamaharbor 6y ago

Reminds me of the “Those are trading sardines, not eating sardines” punchline.

Temasik 6y ago

yes the crypto industry is one big scam industry

thom 6y ago

When scam becomes self sustaining (even in the face of repeated evidence it’s a scam), is it still a scam? It seems like this is built into the value of Bitcoin at this point. Someone could stand up and say “behold, I am manipulating the price of Bitcoin for my own gain, through nefarious means” and people would just think “well, after the price collapses because of this, someone else is bound to manipulate the price, so it’ll go back up!”

totalZero 6y ago
If something (not Bitcoin, but just speaking generally) is a scam, the quality of self-sustainment wouldn't make it any less of a scam. The idea that being able to sustain a scam somehow legitimizes it, is essentially how Bernie Madoff justified his actions. “Everybody thinks the worst of me. The only thing I’m happy about is I was able to help people recover … There’s nothing for me to change from. It’s not like I ever considered myself a bad person.” https://www.politico.com/story/2014/03/bernie-madoff-interview-104838 https://www.politico.com/story/2014/03/bernie-madoff-intervi... "The facts were that the majority of my individual clients were net winners." https://www.cnbc.com/2015/04/07/in-new-emails-madoff-says-fraud-wasnt-so-bad.html https://www.cnbc.com/2015/04/07/in-new-emails-madoff-says-fr...

tmarice 6y ago

The amount of FUD in every Bitcoin-related thread on HN is mind boggling. The network is decentralized, permissionless, pseudonymous and cheap. It is a stable protocol and layer 2 solutions are being built upon it to address the downsides blocking every day use. He who controls the money, controls the world. The control is slipping and the roaches are starting to run around in panic.

oraphalous 6y ago
Costly signalling theory is what I'd suggest to all the folks on this thread that struggle to wrap their heads around the wastefulness of it all...
lxgr 6y ago
> cheap [citation needed]
xiphias2 6y ago
It just means that Bitcoin holders are still early adopters. I have seen Ethereum described as a scam many times for example, but in reality it just makes different tradeoffs than Bitcoin (some of them I like, but with other tradeoffs I'm not comfortable with).
ivanche 6y ago
> He who controls the money, controls the world. The control is slipping and the roaches are starting to run around in panic. Well considering that FBI, State of Bulgaria and a guy nobody ever saw (his alleged initials are SN) are 3 largest bitcoin holders I'd say that it's pretty clear who will have the control of the world! Also, world population is around 8 billion. Number of bitcoin wallets is around 65 million, or a whopping 0.8% (not counting probably myriads of people having more than 1 wallet).

blackrock 6y ago

It sounds like regulations are coming. Bitcoin had better buy some nukes to protect itself. It’s about to get a big stick shoved down its throat.

notjes 6y ago

It is a revolutionary black hole for gamblers but also for normal people, enabled by intentional behavior of the global financial institutions. The rug will be pulled from under Bitcoion, and when it happens, the disruption will be revolutionary as well. Until then ride the tiger with caution.

skc 6y ago

I thought this would be a post referencing a recently infamous twitter thread on how Bitcoin is effectively a ponzi scheme https://twitter.com/smdiehl/status/1349307219318345728 https://twitter.com/smdiehl/status/1349307219318345728 Though I wish he hadn't disabled comments

gthaman 6y ago
The 'ponzi scheme' argument reeks of desperation when entire generations of Americans are going to witness the greatest ponzi scheme of all time, state sponsored social security, collapse. Hey! look at this (maybe a) truck far off in the distance that might hit you while a different truck is 5 feet away from hitting you from behind.

worik 6y ago

How can bitcoin be anything other than a scam, now. It has no legal, ethical use case. The only reason to buy bitcoin is you hope some bigger fool will buy it from you later. Not quite a pyramid scheme is the best thing anybody can say about it

worik 6y ago
Ok. Donating to Wikileaks.

chemmail 6y ago

BTC in itself is not a scam the same way the internet is not a scam, but almost all scams are now internet based. A lot of the altcoins had good intentions, but when money comes in and the incentive of doing good work is not much, but everything else brings in money, means that money starts to corrupt.