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The big deal is that «any new “currency” or speculative digital token that doesn't have a fair distribution mechanism is a multi-level marketing pyramid scheme

The big deal is that «any new “currency” or speculative digital token that doesn't have a fair distribution mechanism is a multi-level marketing pyramid scheme by default. Hence, not a currency. The earliest adopters of such flawed contrivances will always have an increasingly disproportionate amount of the total wealth as it gets adopted. Early adopters mine or buy large proportions of the total supply at negligible costs while late adopters mine or buy negligible proportions at large costs. It follows that holders immediately have every incentive to get as many people to buy after them.» —https://www.cynicusrex.com/file/cryptocultscience.html https://www.cynicusrex.com/file/cryptocultscience.html

jcbrand 5y ago
With Bitcoin, you've had ten years to acquire some, in multiple different ways. It's about as fair as one can hope for while being permissionless and not requiring identification. In the early days Bitcoin was given away for free via faucets, you just had to create a wallet The existing fiat currencies suffer the same issue. It's called the Cantillon effect. People who are closest to newly created currency units (mostly financial insiders) pay lower interest rates and have more buying power with that money. They can also immediately turn around and lend the currency out at higher rates, pocketing the difference.
- CynicusRex 5y ago
  > you've had ten years to acquire some That makes it a ten-year-old pyramid scheme. It may be born from noteworthy ideals, but its flaws have become more apparent over the years. Stephen Diehl succinctly puts why the bubble has lasted so long: “Writing about bitcoin for a lay audience is challenging. If people know enough about tech alone they might think there's no problem, if they know enough about finance alone they might think there's no problem. If people know enough about both then they know it's all a big scam.” —https://twitter.com/smdiehl/status/1363898199010852869 https://twitter.com/smdiehl/status/1363898199010852869 > The existing fiat currencies suffer the same issue. Bitcoin touting to be the future of money while having the same if not more problems than fiat currencies is exactly why it deserves all the scrutiny it can get.
  - jcbrand 5y ago
    > Bitcoin touting to be the future of money while having the same if not more problems than fiat currencies is exactly why it deserves all the scrutiny it can get. I'm totally on board that Bitcoin should be scrutinized and examined critically. Concerning the Cantillon effect, in the fiat system, the beneficiaries are the already rich and well connected insiders. Recent central bank monetary interventions are major drivers of inequality by pushing up the asset prices of the rich while the poor suffer joblessness and inflation. With Bitcoin, new units are created in fierce and open competition, and not handed out to insiders.
    - CynicusRex 5y ago
      >in the fiat system, the beneficiaries are the already rich and well connected insiders. Same with crypto“currencies”, hence why they're a pyramid scheme. >Recent central bank monetary interventions are major drivers of inequality by pushing up the asset prices of the rich while the poor suffer joblessness and inflation. Again, crypto“currencies” do the exact same thing; increasing inequality by creating another elite who hoard their wealth. >With Bitcoin, new units are created in fierce and open competition, and not handed out to insiders. New units are mined by the already filthy rich because mining on regular PCs has become obsolete.
- tromp 5y ago
  > It's about as fair as one can hope for Emitting half of all bitcoin in just the first 4 years is hardly fair. One would hope for a more Gold like distribution, such as a pure linear emission. This still has a finite soft total supply [1]. [1] https://john-tromp.medium.com/a-case-for-using-soft-total-supply-1169a188d153 https://john-tromp.medium.com/a-case-for-using-soft-total-su...
  - jcbrand 5y ago
    The supply of gold on earth is finite. An infinitely growing cryptocurrency presupposes perpetual economic growth, which requires ever increasing population and resource extraction. Maybe that's realistic if we start colonizing Mars and mining asteroids, but it's not possible on earth alone. If limited supply turns out to be an issue, competing currencies can be used to augment supply, it's basically already the case.
    - Cobragri 5y ago
      it is mining since thousands years. That is finite time for you?)
skybrian 5y ago
Company stock rewards founders and early supporters in a similar way for making the stock more valuable. These incentives aren’t usually considered a bad thing in themselves? Though they certainly can be in pump-and-dump situations. Buyer beware. Other than stablecoins, it’s unclear how it would be avoided?
- xfer 5y ago
  That is fine if you consider cryptocurrency as an investment. But if the goal is to be used as a currency(which is what this integration is about), then it is not acceptable.
  - skybrian 5y ago
    Volatility is a problem but they claimed that users might mitigate this by not holding for very long with ordinary transactions. I’m somewhat skeptical. But given that speculation drives much of the interest in cryptocurrencies, they might succeed anyway.
  - CynicusRex 5y ago
    > That is fine if you consider cryptocurrency as an investment. Investment is a misnomer because it doesn't produce or fix anything in the real world, nor pay dividends. If you invest in a company that 3D prints modular homes you'll get a piece of the profits through dividends. Crypto“currencies” do nothing of the sort. You have to sell to a greater fool to profit. Meanwhile, the originators have trivially created digital tokens from thin air, backed by a mere white paper or faulty proof of concept, and consequently profit wildly by mere shilling. Yes, similar pyramid schemes occur in the stock market as well, which I criticize just as much. If it's an actual currency then it's not an investment but a conversion.
    - chillchurch 5y ago
      A good number of cryptocurrencies do provide real world value, just because it is not a physical good doesn't mean the value doesn't exist. And many of the cryptocoins are Proof of Stake, or planning to switch to PoS (such as Ethereum). This, besides requiring far less energy than the Proof of Work mining for block validation, allows someone who purchased the coin to gain more coin. By staking coin to assist in the validation of blocks, stakers are rewarded a percentage of the transaction fees as payment. They do not need to buy equipment to mine and effectively earn interest on staked coin. Even if you bought in at the point a coin stabilizes and no longer appreciates, you could still increase your wealth without needing the price of the coin to increase.

jcbrand 5y ago

With Bitcoin, you've had ten years to acquire some, in multiple different ways. It's about as fair as one can hope for while being permissionless and not requiring identification. In the early days Bitcoin was given away for free via faucets, you just had to create a wallet The existing fiat currencies suffer the same issue. It's called the Cantillon effect. People who are closest to newly created currency units (mostly financial insiders) pay lower interest rates and have more buying power with that money. They can also immediately turn around and lend the currency out at higher rates, pocketing the difference.

CynicusRex 5y ago
> you've had ten years to acquire some That makes it a ten-year-old pyramid scheme. It may be born from noteworthy ideals, but its flaws have become more apparent over the years. Stephen Diehl succinctly puts why the bubble has lasted so long: “Writing about bitcoin for a lay audience is challenging. If people know enough about tech alone they might think there's no problem, if they know enough about finance alone they might think there's no problem. If people know enough about both then they know it's all a big scam.” —https://twitter.com/smdiehl/status/1363898199010852869 https://twitter.com/smdiehl/status/1363898199010852869 > The existing fiat currencies suffer the same issue. Bitcoin touting to be the future of money while having the same if not more problems than fiat currencies is exactly why it deserves all the scrutiny it can get.
- jcbrand 5y ago
  > Bitcoin touting to be the future of money while having the same if not more problems than fiat currencies is exactly why it deserves all the scrutiny it can get. I'm totally on board that Bitcoin should be scrutinized and examined critically. Concerning the Cantillon effect, in the fiat system, the beneficiaries are the already rich and well connected insiders. Recent central bank monetary interventions are major drivers of inequality by pushing up the asset prices of the rich while the poor suffer joblessness and inflation. With Bitcoin, new units are created in fierce and open competition, and not handed out to insiders.
  - CynicusRex 5y ago
    >in the fiat system, the beneficiaries are the already rich and well connected insiders. Same with crypto“currencies”, hence why they're a pyramid scheme. >Recent central bank monetary interventions are major drivers of inequality by pushing up the asset prices of the rich while the poor suffer joblessness and inflation. Again, crypto“currencies” do the exact same thing; increasing inequality by creating another elite who hoard their wealth. >With Bitcoin, new units are created in fierce and open competition, and not handed out to insiders. New units are mined by the already filthy rich because mining on regular PCs has become obsolete.
tromp 5y ago
> It's about as fair as one can hope for Emitting half of all bitcoin in just the first 4 years is hardly fair. One would hope for a more Gold like distribution, such as a pure linear emission. This still has a finite soft total supply [1]. [1] https://john-tromp.medium.com/a-case-for-using-soft-total-supply-1169a188d153 https://john-tromp.medium.com/a-case-for-using-soft-total-su...
- jcbrand 5y ago
  The supply of gold on earth is finite. An infinitely growing cryptocurrency presupposes perpetual economic growth, which requires ever increasing population and resource extraction. Maybe that's realistic if we start colonizing Mars and mining asteroids, but it's not possible on earth alone. If limited supply turns out to be an issue, competing currencies can be used to augment supply, it's basically already the case.
  - Cobragri 5y ago
    it is mining since thousands years. That is finite time for you?)

skybrian 5y ago

Company stock rewards founders and early supporters in a similar way for making the stock more valuable. These incentives aren’t usually considered a bad thing in themselves? Though they certainly can be in pump-and-dump situations. Buyer beware. Other than stablecoins, it’s unclear how it would be avoided?

xfer 5y ago
That is fine if you consider cryptocurrency as an investment. But if the goal is to be used as a currency(which is what this integration is about), then it is not acceptable.
- skybrian 5y ago
  Volatility is a problem but they claimed that users might mitigate this by not holding for very long with ordinary transactions. I’m somewhat skeptical. But given that speculation drives much of the interest in cryptocurrencies, they might succeed anyway.
- CynicusRex 5y ago
  > That is fine if you consider cryptocurrency as an investment. Investment is a misnomer because it doesn't produce or fix anything in the real world, nor pay dividends. If you invest in a company that 3D prints modular homes you'll get a piece of the profits through dividends. Crypto“currencies” do nothing of the sort. You have to sell to a greater fool to profit. Meanwhile, the originators have trivially created digital tokens from thin air, backed by a mere white paper or faulty proof of concept, and consequently profit wildly by mere shilling. Yes, similar pyramid schemes occur in the stock market as well, which I criticize just as much. If it's an actual currency then it's not an investment but a conversion.
  - chillchurch 5y ago
    A good number of cryptocurrencies do provide real world value, just because it is not a physical good doesn't mean the value doesn't exist. And many of the cryptocoins are Proof of Stake, or planning to switch to PoS (such as Ethereum). This, besides requiring far less energy than the Proof of Work mining for block validation, allows someone who purchased the coin to gain more coin. By staking coin to assist in the validation of blocks, stakers are rewarded a percentage of the transaction fees as payment. They do not need to buy equipment to mine and effectively earn interest on staked coin. Even if you bought in at the point a coin stabilizes and no longer appreciates, you could still increase your wealth without needing the price of the coin to increase.