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I recommend reading up on the MMM company. http://en.wikipedia.org/wiki/MMM_%28Ponzi_scheme_company%29 http://en.wikipedia.org/wiki/MMM_%28Ponzi_scheme_company
by vaksel 15y ago
I recommend reading up on the MMM company.
http://en.wikipedia.org/wiki/MMM_%28Ponzi_scheme_company%29 http://en.wikipedia.org/wiki/MMM_%28Ponzi_scheme_company%29
there is also a Russian movie called PiraMMMida that came out a few months ago, which is the fictionized version of history. Now that movie, is pretty much exactly how bitcoin tends to be covered by the fanboys.
And as the movie points out, it comes down to pure greed, people give up real money in order to buy worthless paper, which they are hoping to unload before it depreciates...but they never do, because they keep seeing big returns...until the point when the whole "economy" crashes and you are left with nothing. An important point, is that these people knew that the currency was worthless, but because of their greed they continued buying it up and promoting it to others.
- kiba 15y agoBitcoin is not a company. It is a currency. It doesn't promise anything. The fact that it is an ingenuous social engineering hack is merely an effect of the money supply.
- scotty79 15y agoIf such silly thing as gold became money and paper printed by governments became money then a tool possessing qualities that bitcoin possess is bound to become money eventually. Only two real risks. Crypto weakness or Bitcoin 2.0 Gold is intrinsically similarly useless as bitcoin. We used it as money only because it was durable and rare. We used paper as money because strong, trustworthy entity declared that its supply will be limited and controlled. Bitcoin has this basic necessary quality but also much much more.
- thecabinet 15y agoWe use paper as money because a strong entity said they would accept those pieces of paper for tax payments. Rather than going to jail.
- pyre 15y agoWe originally used paper money, because it was backed by something (banks, gold, etc). Nowadays most (all?) paper money has been centralized to government control.
- deleted 15y ago[deleted]
- woodall 15y ago>Gold is intrinsically similarly useless as bitcoin. That is incorrect on many levels. Gold has applications in MANY things. I bet the device you used to type out that comment has a bit of gold in it. The comparison to BitCoin and paper money makes more sense, but it doesn't. This is because BitCoin has no one backing it. If the dollar drops, well the US is backing it; and they will be forced to deal with the consequences. If someone pulls the rug out on BitCoin- might never happen, but who knows- then no one is responsible. BitCoin is a fun game, and that is all it should be. Such rapid deflation will not go on forever.
- BCM43 15y ago> If someone pulls the rug out on BitCoin- might never happen, but who knows- then no one is responsible. How might someone go about doing this?
- knowtheory 15y agoActually quite easily. If your nation bans the trading of bitcoins for the official state currency, then you have a problem. Regardless of the fact that bitcoins can be transferred w/o outside observation is irrelevant if you can't purchase or trade for goods and services. And at that point, you're either black market, or you're fucked.
- hugh3 15y agoWell, as long as not all nations ban trading bitcoins for official state currency it doesn't completely screw things over. I simply trade my bitcoins for Vietnamese dongs or whatever and then exchange my dongs for dollars. No, the collapse is more likely to happen on its own. At some point the massive increase in value must draw to a close. What happens then? Big bitcoin holders no longer have an incentive to hold onto their millions of dollars' worth of bitcoins "Hmm, time to sell some of these bitcoins". Millions of bitcoins hit the market and find no buyers at the quoted price. All of a sudden the price is a lot lower, folks panic, drives prices even lower. In an asset where the only incentive to hold the asset is the massive increase in value, panic selling happens as soon as it looks like the massive increase has gone flat. The steeper the increase, the steeper the decrease. That makes bitcoin unlike gold.
- sorbus 15y agoThere's another risk, actually: government legislation/intervention.
- j123 15y agoThis insight, I think, is key. Imagine the power conferred by controlling a nation's currency. People don't just let that sort of power go. The first 1000-fold increase in value has pushed Bitcoin into the spotlight. The next 1000-fold increase will be far more noticed and hence far likelier to attract some counteractions by governments.
- adrianwaj 15y agoThis is just FUD. Why don't you go trash sub-prime lenders before you trash bitcoin? Don't buy bitcoin. Buy Euro instead!
- Tichy 15y agoBitCoin doesn't promise any returns, and doesn't distribute anything to new people who sign up. It is only a Ponzi scheme if the real world's economy is a Ponzi scheme. I don't know if it is.
- premchai21 15y agoActually, while the Bitcoin system itself does not arbitrarily distribute any money to new clients, there does exist a Bitcoin Faucet[1] to help newcomers try the system out, allowing various people to acquire a few free cBTC once. [1] http://freebitcoins.appspot.com/ http://freebitcoins.appspot.com/
- hugh3 15y agoYou're right. While bitcoin has certain similarities to Ponzi schemes (i.e. the fact that the people who start the scheme get rich while the folks who come later lose their money) I think it's really more accurately described simply as an asset bubble. Except, y'know, without any actual underlying asset. I don't think I've ever seen an asset bubble in something that was literally worthless before. Even the tulip bulbs of the Dutch tulip mania (http://en.wikipedia.org/wiki/Tulip_mania http://en.wikipedia.org/wiki/Tulip_mania) could be planted in your garden and would look quite pretty, even if not ten years' salary worth of pretty.
- knowtheory 15y agopets.com stock doesn't count? ;)
- hugh3 15y agoI know you're being facetious, but just to clarify it for everybody: no, stock in a company never counts, because pets.com was an actual company with actual assets. For instance, they owned that sock puppet. Bitcoins have literally zero value.
- deleted 15y ago[deleted]