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No “pre-mine” doesn't mean fairly distributed. Bitcoin is a multi-level marketing pyramid scheme as well. Early adopters mine or buy large proportions at neglig

No “pre-mine” doesn't mean fairly distributed. Bitcoin is a multi-level marketing pyramid scheme as well. Early adopters mine or buy large proportions at negligible prices while late adopters mine or buy negligible proportions at large prices.

olah_1 6y ago
The gold and oil rushes weren't "fair" either. Fortune favors the bold, I guess. I was salty for a long time about bitcoin early buyers being filthy rich now. My saltiness clouded my vision of the real value there. Granted, I think there are better solutions than bitcoin now, but I respect it.
anonporridge 6y ago
By this definition, every company stock is a multi-level marketing pyramid scheme. In fact, company stock is WAY worse, because the majority of people are legally prohibited from investing in private companies unless they're an accredited investor (already rich). So, only rich people (other than founders and early employees) are allowed to buy in at super low prices before handing off the bag to the public.
- PragmaticPulp 6y ago
  This is incorrect. Stock represents actual ownership of a scarce resource (a company). That company would have value whether or not it was explicitly sold as a stock. The value doesn’t come from the stock. Cryptocurrency removes the underlying asset and simply sells shares of artificial scarcity. It’s only as valuable as what people decide to trade it at, because it doesn’t represent ownership of anything other than itself.
  - doggosphere 6y ago
    Stock represents actual ownership of a scarce resource (a company). Is there a limit to how many shares a company can issue? No, a board can technically issue shares unto infinity. There is no guarantee of scarcity, no guarantee they will not raise more money. That company would have value whether or not it was explicitly sold as a stock. The value doesn’t come from the stock. So when a company has no profit but a high valuation, is this the market correctly discounting future predicted cashflows and giving a company fair value, or is it some sort of scam? Ex: Is NKLA actually a $5.2b electric vehicle company? How about the spade of Chinese IPOs that ended up being vaporware? Cryptocurrency removes the underlying asset and simply sells shares of artificial scarcity. The scarcity isn't artificial. It's mathematically provable, open source and auditable. If you think you can manufacture "fake" btc on the blockchain, feel free to try. If you think you can successfully fork and create a whole new chain, you're also welcome to try. It’s only as valuable as what people decide to trade it at, because it doesn’t represent ownership of anything other than itself. This is actually factual for anything in existence. A piece of bread. A $100m painting. You're starting to figure out what peculiar creatures humans are.
    - PragmaticPulp 6y ago
      > Is there a limit to how many shares a company can issue? No, a board can technically issue shares unto infinity. There is no guarantee of scarcity, no guarantee they will not raise more money. The scarce asset is the company, not the shares. Yes, they can issue more shares, but those shares still represent the same company plus the new investment money raised by raising the shares. They're not creating more company out of thin air when they issue more shares. EDIT: To clarify some misconceptions in the comments below: When a company sells more shares into the market they are not simply diluting away existing shareholders. The keyword is that they are selling shares, meaning they take money in exchange for shares. The company's value increases by the amount of money they take in exchange for the sale. Example: If a company is worth $1,000,000 and has 1,000,000 shares outstanding, each share is worth $1. If the company decides to sell another 100,000 shares and the market buys them at $1/each, there are now 1,100,000 shares outstanding and the company is now worth $1,100,000 because they took in $100,000 of cash via share sales. Existing shareholders have not lost any money or value.
      - blackearl 6y ago
        It doesn't matter if it represents the company because the thing that shareholders care about is how much $ each share represents. This is why a stock will tank when a company talks about diluting their existing shares by creating new shares out of thin air. What you're talking about would be more akin to a stock split.
        PragmaticPulp 6y ago
        When a company sells more shares, they money they raise from selling those shares contributes to the value of the company. If a company sells 100,000 shares at a dollar each, the company is now worth $100,000 more because they now have another $100,000 on their balance sheet. No value is lost in this process. > This is why a stock will tank when a company talks about diluting their existing shares by creating new shares out of thin air. Companies can't just declare that more shares exist and dilute away shareholders like you said. They either issue them as stock based compensation, which is an expense, or they sell the shares to buyers, which means money goes toward their bottom line.
  - chrisco255 6y ago
    > This is incorrect. Stock represents actual ownership of a scarce resource (a company). That company would have value whether or not it was explicitly sold as a stock. The value doesn’t come from the stock. Depending on the voting rights embedded in the share, your ownership is likely meaningless. It doesn't guarantee you rights to dividends necessarily and even if it does, the company can just choose to never issue a dividend (like Amazon). It doesn't necessarily grant you voting rights for the Board of Directors either. Worse, you have to go through a 3rd party broker to buy a share or trust a company like Robinhood to hold your shares for you. As we saw with GameStop, they can rug pull on you at any time. With decentralized cryptos like BTC & ETH, that can't happen from your own private wallet. You can always transact. Cryptos such as BTC & ETH are provably scarce, not artificially scarce. You can validate supply at any time by running your own node and joining the network. You don't need anyone's permission to do that. It's a public blockchain.
    - fwip 6y ago
      It's both provably scarce and artificially scarce.
    - PragmaticPulp 6y ago
      > your ownership is likely meaningless That's not true. The shares still represent a claim on the underlying company. If someone wants to acquire the company, they have to compensate you for the shares that you hold. Companies can't simply wave a magic wand and steal value from shareholders. There's more to stock ownership than voting rights.
    - gruez 6y ago
      >As we saw with GameStop, they can rug pull on you at any time. With decentralized cryptos like BTC & ETH, that can't happen from your own private wallet. You can always transact. ETH is probably not the best example here because they have rug-pulled people with a hard fork.
      - whimsicalism 6y ago
        > they have rug-pulled people with a hard fork. "People" here being criminals that exploited a flaw in the DAO, yeah?
  - CryptoPunk 6y ago
    >>This is incorrect. Stock represents actual ownership of a scarce resource (a company). He's referring to the grandparent comment's definition, not yours. The GP's definition is: >>Early adopters mine or buy large proportions at negligible prices while late adopters mine or buy negligible proportions at large prices. By that definition, anything that goes up in value is a "multi-level marketing pyramid scheme".
- CynicusRex 6y ago
  The stock market being crooked doesn't mean bitcoin isn't crooked as well. I'm critical of both.
- lmm 6y ago
  > By this definition, every company stock is a multi-level marketing pyramid scheme. No because the company's income doesn't come from selling more stock, but from selling valuable products. (Companies that don't have actual revenue are indeed multi-level marketing pyramid schemes and there are some of them around, but they're the exception rather than the rule).
- psychlops 6y ago
  Also, it would include fiat currency as a scheme as those who print it do so at negligible prices.
  - qotgalaxy 6y ago
    No, not really.
CryptoPunk 6y ago
By that definition, any stock or collectible is a "multi-level marketing pyramid scheme". A multi-level marketing or pyramid scheme is not defined as anything where early adopters might have purchased it at a lower price than later adopters.
- SwimSwimHungry 6y ago
  Which is interesting. Unlike virtually every stock on the stock market, I see Bitcoin-stans constantly harp about the "USD price" of Bitcoin on places like Twitter, Youtube, any social media with a large enough megaphone, just so they can stir up loads of FOMO and get people to make a financial decision that is likely not led with wisdom and prudence in mind. Especially with how high BTC is priced at now, you'd be lucky to have massive multipliers on your initial buy in as you might have in the earlier days. The diminishing point of returns is rearing its ugly head, so more pumping must happen to keep this all in the public zeitgeist. That kinda smells pump and dump like to me. Lest we forget, the end of the previous bull runs in 2013 and 2017 wiped out some people that made bad investment decisions (and there's no guarantee another black swan event won't happen again in the future). Not to mention, whenever there is news of someone losing their wallet keys, Bitcoiners breathe a sigh of relief, knowing that that's one more person that has to permanently HODL. Gross.
  - CryptoPunk 5y ago
    >>That kinda smells pump and dump like to me. Yes agreed. Though I would add that this is a paradigm shifting technology, so there may be something substantive underlying all of this Bitcoin hype. As for crypto as a whole, Ethereum has real world use cases, like stablecoins and NFTs, and an extensive multi-pronged development effort to expand its capabilities, in particular scalability, that cannot be dismissed as mere hype. Just on the basis of fee revenue alone, and the assumption that this turns into income for ETH holders once the platform switches to Proof-of-Stake, Ethereum's current valuation can be justified with only the assumption that its price-earnings multiple will match that of relatively mature and low-growth industries like electronics.
    - 5y ago

olah_1 6y ago

The gold and oil rushes weren't "fair" either. Fortune favors the bold, I guess. I was salty for a long time about bitcoin early buyers being filthy rich now. My saltiness clouded my vision of the real value there. Granted, I think there are better solutions than bitcoin now, but I respect it.

anonporridge 6y ago

By this definition, every company stock is a multi-level marketing pyramid scheme. In fact, company stock is WAY worse, because the majority of people are legally prohibited from investing in private companies unless they're an accredited investor (already rich). So, only rich people (other than founders and early employees) are allowed to buy in at super low prices before handing off the bag to the public.

PragmaticPulp 6y ago
This is incorrect. Stock represents actual ownership of a scarce resource (a company). That company would have value whether or not it was explicitly sold as a stock. The value doesn’t come from the stock. Cryptocurrency removes the underlying asset and simply sells shares of artificial scarcity. It’s only as valuable as what people decide to trade it at, because it doesn’t represent ownership of anything other than itself.
- doggosphere 6y ago
  Stock represents actual ownership of a scarce resource (a company). Is there a limit to how many shares a company can issue? No, a board can technically issue shares unto infinity. There is no guarantee of scarcity, no guarantee they will not raise more money. That company would have value whether or not it was explicitly sold as a stock. The value doesn’t come from the stock. So when a company has no profit but a high valuation, is this the market correctly discounting future predicted cashflows and giving a company fair value, or is it some sort of scam? Ex: Is NKLA actually a $5.2b electric vehicle company? How about the spade of Chinese IPOs that ended up being vaporware? Cryptocurrency removes the underlying asset and simply sells shares of artificial scarcity. The scarcity isn't artificial. It's mathematically provable, open source and auditable. If you think you can manufacture "fake" btc on the blockchain, feel free to try. If you think you can successfully fork and create a whole new chain, you're also welcome to try. It’s only as valuable as what people decide to trade it at, because it doesn’t represent ownership of anything other than itself. This is actually factual for anything in existence. A piece of bread. A $100m painting. You're starting to figure out what peculiar creatures humans are.
  - PragmaticPulp 6y ago
    > Is there a limit to how many shares a company can issue? No, a board can technically issue shares unto infinity. There is no guarantee of scarcity, no guarantee they will not raise more money. The scarce asset is the company, not the shares. Yes, they can issue more shares, but those shares still represent the same company plus the new investment money raised by raising the shares. They're not creating more company out of thin air when they issue more shares. EDIT: To clarify some misconceptions in the comments below: When a company sells more shares into the market they are not simply diluting away existing shareholders. The keyword is that they are selling shares, meaning they take money in exchange for shares. The company's value increases by the amount of money they take in exchange for the sale. Example: If a company is worth $1,000,000 and has 1,000,000 shares outstanding, each share is worth $1. If the company decides to sell another 100,000 shares and the market buys them at $1/each, there are now 1,100,000 shares outstanding and the company is now worth $1,100,000 because they took in $100,000 of cash via share sales. Existing shareholders have not lost any money or value.
    - blackearl 6y ago
      It doesn't matter if it represents the company because the thing that shareholders care about is how much $ each share represents. This is why a stock will tank when a company talks about diluting their existing shares by creating new shares out of thin air. What you're talking about would be more akin to a stock split.
      - PragmaticPulp 6y ago
        When a company sells more shares, they money they raise from selling those shares contributes to the value of the company. If a company sells 100,000 shares at a dollar each, the company is now worth $100,000 more because they now have another $100,000 on their balance sheet. No value is lost in this process. > This is why a stock will tank when a company talks about diluting their existing shares by creating new shares out of thin air. Companies can't just declare that more shares exist and dilute away shareholders like you said. They either issue them as stock based compensation, which is an expense, or they sell the shares to buyers, which means money goes toward their bottom line.
- chrisco255 6y ago
  > This is incorrect. Stock represents actual ownership of a scarce resource (a company). That company would have value whether or not it was explicitly sold as a stock. The value doesn’t come from the stock. Depending on the voting rights embedded in the share, your ownership is likely meaningless. It doesn't guarantee you rights to dividends necessarily and even if it does, the company can just choose to never issue a dividend (like Amazon). It doesn't necessarily grant you voting rights for the Board of Directors either. Worse, you have to go through a 3rd party broker to buy a share or trust a company like Robinhood to hold your shares for you. As we saw with GameStop, they can rug pull on you at any time. With decentralized cryptos like BTC & ETH, that can't happen from your own private wallet. You can always transact. Cryptos such as BTC & ETH are provably scarce, not artificially scarce. You can validate supply at any time by running your own node and joining the network. You don't need anyone's permission to do that. It's a public blockchain.
  - fwip 6y ago
    It's both provably scarce and artificially scarce.
  - PragmaticPulp 6y ago
    > your ownership is likely meaningless That's not true. The shares still represent a claim on the underlying company. If someone wants to acquire the company, they have to compensate you for the shares that you hold. Companies can't simply wave a magic wand and steal value from shareholders. There's more to stock ownership than voting rights.
  - gruez 6y ago
    >As we saw with GameStop, they can rug pull on you at any time. With decentralized cryptos like BTC & ETH, that can't happen from your own private wallet. You can always transact. ETH is probably not the best example here because they have rug-pulled people with a hard fork.
    - whimsicalism 6y ago
      > they have rug-pulled people with a hard fork. "People" here being criminals that exploited a flaw in the DAO, yeah?
- CryptoPunk 6y ago
  >>This is incorrect. Stock represents actual ownership of a scarce resource (a company). He's referring to the grandparent comment's definition, not yours. The GP's definition is: >>Early adopters mine or buy large proportions at negligible prices while late adopters mine or buy negligible proportions at large prices. By that definition, anything that goes up in value is a "multi-level marketing pyramid scheme".
CynicusRex 6y ago
The stock market being crooked doesn't mean bitcoin isn't crooked as well. I'm critical of both.
lmm 6y ago
> By this definition, every company stock is a multi-level marketing pyramid scheme. No because the company's income doesn't come from selling more stock, but from selling valuable products. (Companies that don't have actual revenue are indeed multi-level marketing pyramid schemes and there are some of them around, but they're the exception rather than the rule).
psychlops 6y ago
Also, it would include fiat currency as a scheme as those who print it do so at negligible prices.
- qotgalaxy 6y ago
  No, not really.

CryptoPunk 6y ago

By that definition, any stock or collectible is a "multi-level marketing pyramid scheme". A multi-level marketing or pyramid scheme is not defined as anything where early adopters might have purchased it at a lower price than later adopters.

SwimSwimHungry 6y ago
Which is interesting. Unlike virtually every stock on the stock market, I see Bitcoin-stans constantly harp about the "USD price" of Bitcoin on places like Twitter, Youtube, any social media with a large enough megaphone, just so they can stir up loads of FOMO and get people to make a financial decision that is likely not led with wisdom and prudence in mind. Especially with how high BTC is priced at now, you'd be lucky to have massive multipliers on your initial buy in as you might have in the earlier days. The diminishing point of returns is rearing its ugly head, so more pumping must happen to keep this all in the public zeitgeist. That kinda smells pump and dump like to me. Lest we forget, the end of the previous bull runs in 2013 and 2017 wiped out some people that made bad investment decisions (and there's no guarantee another black swan event won't happen again in the future). Not to mention, whenever there is news of someone losing their wallet keys, Bitcoiners breathe a sigh of relief, knowing that that's one more person that has to permanently HODL. Gross.
- CryptoPunk 5y ago
  >>That kinda smells pump and dump like to me. Yes agreed. Though I would add that this is a paradigm shifting technology, so there may be something substantive underlying all of this Bitcoin hype. As for crypto as a whole, Ethereum has real world use cases, like stablecoins and NFTs, and an extensive multi-pronged development effort to expand its capabilities, in particular scalability, that cannot be dismissed as mere hype. Just on the basis of fee revenue alone, and the assumption that this turns into income for ETH holders once the platform switches to Proof-of-Stake, Ethereum's current valuation can be justified with only the assumption that its price-earnings multiple will match that of relatively mature and low-growth industries like electronics.
  - 5y ago