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>>If this sounds far-fetched, consider that many smart and smart-sounding people have predicted Bitcoin's demise, and so far all have been utterly wrong Bernie

• cs702 3y ago
  The comparison to Madoff is not apt. Madoff hid losses by committing accounting fraud, whereas every single transaction in the Bitcoin network is visible to everyone and, moreover, cryptographically verifiable by everyone. As long as the distributed consensus algorithm continues to function, Bitcoin will continue to exist. Period. (Government regulations cannot kill it; they can only drive it underground, as with gold.) Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning.
  • thworp 3y ago
    No, this is an absolutely ass-backwards argument. To be a currency or a store of value or money (read: to be of any use) it has to be exchangeable for goods and services. Now we can see transactions on the blockchain but we have no idea what that transaction was for. *Nobody* can tell you what a bitcoins worth of wheat is without resorting to exchange rates of bitcoin to actual currencies. But because the entire exchange ecosystem is so illiquid, intransparent, unaudited and rife with fraud there is no way to know how many bushels of wheat you could get for something like 13 BTC.
    • nwiswell 3y ago
      Isn't this counter-argument equally applicable to silver or gold?
      • paddw 3y ago
        Well, the problem is you can easily trade gold for cash because it is socially acceptable to do so. If Bitcoin became outlawed, it would be very hard to exchange Bitcoin for cash, since it has no extrinsic value outside of being a financial asset (as compared to, for example, barrels of crude oil). That being said, I doubt Bitcoin will be outlawed in the West, and generally agree that it will be around for the long term.
        • nwiswell 3y ago
          > That being said, I doubt Bitcoin will be outlawed in the West, and generally agree that it will be around for the long term. Well, not entirely without precedent, since private ownership of gold was outlawed nationwide in the US during the Great Depression. It wasn't fully legalized until 1974. https://en.m.wikipedia.org/wiki/Executive_Order_6102 https://en.m.wikipedia.org/wiki/Executive_Order_6102
          • mplanchard 3y ago
            This is an entirely new fact for me. It’s surprising to me that I’d never heard of this. Thanks for sharing!
            • nostrademons 3y ago
              Wait till you hear that the first chairman of the SEC was a notorious market manipulator who was hired by his friend FDR to prevent anyone else from doing the things that made him rich. He also happened to be JFK's dad. https://en.wikipedia.org/wiki/Joseph_P._Kennedy_Sr.#Wall_Street_and_stock_market_investments https://en.wikipedia.org/wiki/Joseph_P._Kennedy_Sr.#Wall_Str...
            • 3y ago
  • tromp 3y ago
    > why its network would stop functioning If it fails, it's most likely because block subsidy will become negligible in a few decades and transaction fees alone won't always provide sufficient security against re-org attacks.
    • cs702 3y ago
      Maybe. Others have made that argument before. So far, it's been proven wrong. The rewards are already pretty small, and things are still working. Maybe it could happen after block rewards go to zero? I don't know. But we'll find out if you're right over the next six years!
      • tromp 3y ago
        > So far, it's been proven wrong. How can a prediction of what happens after 2050 (i.e. after a total of 10 halvings to make subsidy negligible) have been proven wrong "so far" ??
        • kiicia 3y ago
          there is set amount of bitcoins to mint transaction fees were intended to keep miners active
    • try_the_bass 3y ago
      The "transaction fees won't protect against reorgs" argument assumes that miners count the value of future block rewards at 0. This is poor logic that models mining as a single game of the prisoner's dilemma. Modeling it as a repeated game arrives at the opposite conclusion: that most miners will cooperate to some degree, because the future value of their rewards depends on it. I say this as someone very much opposed to the "deflationary" model, because I think it's bullshit that generates a "landed gentry" (thanks, spez) that can forever dominate the distribution of a currency. If you're going to make a currency, inflation of some degree is required to ensure fair(er) distribution over time. I just think the idea that, when block rewards dissipate, miners will suddenly lose the ability to think more than one block into the future should be called for what it is: bad logic. It's also readily disproved by the most trivial glance at their history of long-term, forward-looking investment.
  • onlyrealcuzzo 3y ago
    Except ~99.99% of BTC transactions happen in exchanges off chain and aren't visible to anyone, and have a history of being fraudulent at many exchanges that have failed through the years...
    • cs702 3y ago
      That's true for gold too: Most gold transactions happen in exchanges. But the fact that there are successful intermediaries in the gold market is not an argument against gold's viability as a store of value. Ditto for Bitcoin.
      • onlyrealcuzzo 3y ago
        This is whataboutism. The claim is that BTC surely isn't fraud because the chain is public knowledge. This is irrelevant, because the vast majority of data is bullshit. The gold market has been manipulated to and fro, even with regulations. The idea that BTC isn't manipulated to oblivion JUST BECAUSE there's a public ledger (missing 99.99% of the data) is naive.
        • jonhohle 3y ago
          Whataboutism is a method of responding to an accusation by making a counter-accusation against an opponent. (What about her e-mails?)
      • eli 3y ago
        I don't think gold is a good investment vehicle nor means of exchanging value either.
        • deleted 3y ago
          [deleted]
        • xcv123 3y ago
          Tell that to people who lost their entire life savings when their fiat currency hyper-inflated to zero value (Hungary, Zimbabwe, Yugoslavia, Germany, Argentina)
  • youreincorrect 3y ago
    When people talk about Bitcoin's potential demise, they are referring to its price and perceived value, not whether it will cease to exist necessarily. Madoff also was not ultimately caught and his scheme ended because of the accounting fraud being revealed (i.e. the fraud was not that important). That happened later. He was caught because a market downturn resulted in him being unable to acquire new victims for the Ponzi scheme, which would have otherwise perpetuated it by taking new money in and using that to pay out existing investors.
    • cs702 3y ago
      The longer Bitcoin's network continues to function, more and more people will become aware of its resiliency. Governments may topple; banks may fail; exchanges may go bust; Bitcoin keeps on ticking. As long as the network continues to function, Bitcoin will have a price.
      • eli 3y ago
        It's possible that more people are aware of Bitcoin than 18 months ago, but I doubt many think it's more resilient. Since Bitcoin depends on a functioning network it seems more likely than something physical like Beanie Babies or baseball cards to one day become effectively worthless.
        • deleted 3y ago
          [deleted]
      • juve1996 3y ago
        The US government has been around for quite some time. The British pound, longer. It will take hundreds of years to compare to that level of resiliency.
        • XorNot 3y ago
          The British government has completed repayments on historically held debt which dates back to the 18th century[1] as recently as 2015 (they were related to the South Sea Bubble). That's a 162 contiguous years of financial records. [1] https://www.gov.uk/government/news/repayment-of-26-billion-historical-debt-to-be-completed-by-government https://www.gov.uk/government/news/repayment-of-26-billion-h...
  • deleted 3y ago
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  • zirgs 3y ago
    Its network could stop functioning simply because it would no longer be profitable to mine it. Sure - a few hardcore believers would continue mining at a loss, but I doubt that they'd have enough computing power to secure the network properly.
    • calvinmorrison 3y ago
      Isn't difficulty set based on the previous block time?
      • crote 3y ago
        No, the difficulty is updated every 2016 blocks. This should be once every two weeks, but if the worldwide hash power halves it'll of course take four weeks until it can update. The difficulty adjustment is capped to +300% / -75%. The issue here is that the Bitcoin reward has to pay for the mining cost, but there is nothing preventing the Bitcoin price from dropping lower. So miners will either have to mine at a loss for (on average) a week until a difficulty adjustment, or turn off their equipment. Turning it off will make the wait even longer and the mining price per block will increase even more for the remaining miners - leading to more of them operating at a loss or shutting down which makes the problem even worse.
      • zirgs 3y ago
        If the difficulty is too low then the network becomes vulnerable to a 51% attack. If it's too high then it becomes less profitable to mine and transaction processing speed slows down. So it has to be high enough to prevent attacks, but low enough for mining to be profitable.
  • lmm 3y ago
    > Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning. I've been saying for years that Bitcoin will go down like Second Life. Remember when there were news stories about Sony or whoever buys an island for X million dollars? And now... I mean it's still there (presumably), I don't think they've turned off the servers or anything, but no-one cares and it's obviously not a good investment (and that's with it being propped up by a few people who actually enjoy the game, which Bitcoin won't have). The ability to actually buy stuff with Bitcoin is already past its peak (more places are removing Bitcoin payment options than adding them). It's less in the news than it was. There probably won't be a specific collapse moment (when Tether's reserves get exposed as fraudulent and they stop withdrawals I expect Bitcoin's price will crash, but it's crashed before and there are still true believers left over). I mean eventually the last miner will turn off their rig, but it will be irrelevant long before that happens.
    • snapcaster 3y ago
      Presumably you have been saying this for a while and been wrong so far. At what point would you change your mind?
      • landoftheice 3y ago
        [dead]
      • DaiPlusPlus 3y ago
        Are you saying the islands in SecondLife are still retaining their 7-figure US dollar value today?
      • lmm 3y ago
        I don't think I have been wrong? Like I said, the ability to actually buy stuff with Bitcoin is in decline. I'd change my mind if I saw evidence of increasing Bitcoin adoption in the real economy.
        • DaiPlusPlus 3y ago
  • codingrightnow 3y ago
    The fraud is likely in stable coins such as USDT, when it goes Ponzi up, everything comes down with it.
  • yyyk 3y ago
    >(Government regulations cannot kill it; they can only drive it underground, as with gold.) >Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning. This can be done pretty easily, once enough countries ban and condemn it for its contribution to the climate crisis and to crime. There's no need to catch every transaction, just to ban it enough to shrink the mining pool. Once the active network has shrunk enough, the transparent permissionless structure ensures we can ran the obvious attacks on it. Since it's now underground and these actors aren't the nicest of people, coordinating the forks to resist the attacks will be difficult and costly. People give up after each attack, which makes running another attack easier and so on. Eventually maintaining the network as is won't be worth it to anyone.
  • chasil 3y ago
    Very easy. Only a small number of people can participate in new block chain entries, assuming demand is high. These happen every ten minutes, and well under a hundred thousand transactions are allowed. Get in line to spend your money; it may be years. This would never work! https://en.wikipedia.org/wiki/Bitcoin_scalability_problem https://en.wikipedia.org/wiki/Bitcoin_scalability_problem
  • prepend 3y ago
    > whereas every single transaction in the Bitcoin network is visible to everyone and, moreover, cryptographically verifiable by everyone. It’s pretty easy to hide wash trading in the ledger to manipulate the price of bitcoin to artificial levels. Just because transactions are public doesn’t mean that there isn’t associated data hidden (eg, identities, if dead wallets are really dead, etc etc). Bitcoin may be great, but to say it must succeed because it’s transparent doesn’t address the risk that there is no basis for value and it’s only purpose is speculation and tricking a greater fool to keep the price up.
  • iudqnolq 3y ago
    Tell that to Gus Farber, who was arrested for selling gold after Roosevelt banned private ownership of gold (with certain exceptions): https://en.m.wikipedia.org/wiki/Executive_Order_6102 https://en.m.wikipedia.org/wiki/Executive_Order_6102
  • marcusb 3y ago
    > Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning. No, they don’t. There are a variety of scenarios that do not require the government to eliminate the ecosystem. For starters, they could make if very, very difficult to use for large capital purchases (houses, cars, etc.) They could impose fines on businesses for accepting crypto — or specific types of crypto — as payment for goods and services. Can they completely eliminate your ability to trade a bitcoin with your friend? No, of course not, any more than the federal government retrieved every ounce of gold back when that was illegal. But they can make it so painful to use that most people simply won’t.
• rcme 3y ago
  The issue I have with the argument is that you can apply it to anything. The fact that Bernie Madoff pulled off a ponzi scheme for years and the fact that "The Lindy effect works until it doesn't" isn't a specific critique of Bitcoin.
  • otoburb 3y ago
    Exactly my point. The Lindy effect probably shouldn't be used as an argument for either side of this debate (or any, for that matter). But that's a specific (partial) statement that I saw in the parent comment.
    • cs702 3y ago
      Ah, I see what you mean now. I agree with you on the Lindy effect. What I meant is that the arguments used by many past predictions of Bitcoin's demise have been proven wrong. Anyone making new predictions of Bitcoin's demise must explain precisely how and why its distributed network would fail. Sorry if that wasn't clear in my comment above!
      • dimgl 3y ago
        I think it's unlikely that, as a technology, Bitcoin will ever go away due to its decentralized nature. I think what most people refer to when they say "Bitcoin will fail" is a price drop so significant it makes the coin worthless (99% drop). This may also never happen, and the reality will likely be somewhere in between.
      • majormajor 3y ago
        Why should a prediction of demise (for whatever meaning of "demise" we care to choose, but we can start with the one you first mentioned, market capitalization) be required to be more precisely detailed about how and why than a prediction of thriving? Someone could say "Many past novel currencies and securities have failed; any prediction of Bitcoin's success must explain precisely how and why it will still have worth in 50 years." To me this seems like the same argument you're making - belief that a trend will continue until proven otherwise - but I don't find either of them very convincing. I think any argument either way should have more details than "it's worked so far!" or "it'll eventually fall over like Madoff!" but you seem to only be pushing the burden of proof in one direction.
• username332211 3y ago
  It's not seemingly impossible, it's scientifically proven that the general public can't know when the price of Bitcoin will collapse. And it has nothing to do with the general public being stupid and any of that bullshit. It's called the efficient market hypothesis. If it was known that the price of Bitcoin will collapse on the 7th of June 2025, every owner would have sold their Bitcoins on the 6th of June. But then the price would collapse on the 6th, not on the 7th. But of course, the definite knowledge the price will collapse on the 6th would mean the price would collapse on the 5th and so forth. Hence why accurate, definite and widely believed predictions are impossible.
  • mrguyorama 3y ago
    The efficient market "Hypothesis" (is it even testable?) presupposes a rational market, doesn't it? Real life markets are not rational, by definition. Humans are not rational actors.
    • __loam 3y ago
      Careful mentioning any actual economic theory here lol.
    • bandrami 3y ago
      I remember being annoyed on the 2nd day of Econ class when the prof mentioned that empirically we know human preference graphs can be cyclic but we have to pretend that's not true for any micro to work at all.
      • HWR_14 3y ago
        That's succinctly phrased. I don't know why it would bother you. It seems like it's admitting a limitation of the model he's about to teach.
        • bandrami 3y ago
          It's a fundamental premise of the entire discipline and it's known to be empirically false
• ttobbaybbob 3y ago
  bernie == bernard fwiw
• medellin 3y ago
  The year is 2023 and we still have people arguing this. Can you at least try to be creative with your critique of bitcoin instead of this lame one?
• throwme_123 3y ago
  Wow. Both parent and grand-parent seem wrong. GP: Bitcoiner, dooming everything else. Parent: Anti-crypto (the majority here), up to the point on comparing Bitcoin (which might be a bubble, that's not the point here) to a Ponzi (that it is not: Supply is fixed, there is no new deposits paying previous depositors).
  • peteradio 3y ago
    What's the difference if you are getting payout from a bigger fool?
    • dvt 3y ago
      There's no such thing as "payout" in free markets—someone buys your thing for money (sometimes less money than you paid for it, sometimes more money than you paid for it). So, while it might be a speculative bubble (like Beanie Babies, or Tulips, or whatever), it's certainly not a Ponzi. Also, the bigger fool theory (which is what you're conflating it with) is also not a Ponzi. This might be confusing, because many other crypto products are very Ponzi-like. For example, Voyager literally paid new "stakers/depositors" (a.k.a. investors) with old "stakers'/depositors'" (a.k.a. investors') money to reach the insane return rates they were advertising.
      • peteradio 3y ago
        Who the hell cares. If it's a pump and dump of fundamentally worthless stuff relying on bigger fools, it's all the same.
        • tasuki 3y ago
          I care. You made a claim, were given a thoughtful explanation why your claim was wrong, and you don't care. Not cool.
          • peteradio 3y ago
            I made no claim. I asked whats the difference and got a pedantic explanation of what a ponzi scheme technically is, like anyone whose been in one of these threads hasn't already heard that same pedantic explanation. Who cares? It really doesn't matter if its a ponzi scheme or a pyramid scheme or some other scheme. What is transparently obvious is there is nothing there there and eventually the music stops and leaves the bigger fools holding the bag.
• travisjungroth 3y ago
  Something collapsing isn’t an example of the Lindy effect not working. It literally predicts when things will collapse. It’s just a life expectancy for things with a power law distribution. A healthy 20-year-old can fall over dead from a brain aneurysm. Doesn’t mean actuarial tables aren’t useful.
• cyanydeez 3y ago
  Think of Bitcoin like the martingale betting method. In theory, it does win. In practice, few people have enough liquidity to keep up and even then, they need to know when to quit.
  • tasuki 3y ago
    I fail to see any kind of equivalence or similarity. Mind elaborating? Few people have enough liquidity to keep up with bitcoin... what does that mean?
• deevolution 3y ago
  There's no promises of future gains or profits made explicitly by the protocol, nor is there any central party pushing/benefiting from its adoption. There are plenty of other crypto coins you could accurately label as Ponzis. It's unfortunate that bad actors have tarnished the Bitcoin name...
• gwbas1c 3y ago
  I think it's pretty clear that most crypto currencies a Ponzi schemes. But... There's enough demand for an international unregulated currency that I think it'll be around for awhile. There are plenty of people that tolerate its flaws. (Specifically, the volatile value.) I personally think once the scammers and "true believers" move on, Bitcoin will stay around until some other international "unregulated" internet money comes around.