Topic: Bitcoin isn’t the future of money — it’s either a Ponzi scheme (Read 3917 times)

There never was such a time, we just weren't aware of it.

Time will tell. More people are using bitcoin.

I don't understand how people can literally ignore the novelty of block chain. Anonymity isn't the only thing that bitcoin offers. The current market doesn't have as many ecommerce related applications because of lack of security and hence reluctance of people to deal with it.

Security is a concern that is being take care off by certain upcoming companies, trying to make it as secure as possible attracting new users.
It's all just a matter of time when that level of security is reached and the use of Bitcoin and Block chain booms.

Etherium, I'm sure most of us here are aware of, is another novelty of block chain, you should check that out too.

If this was reddit climate research forum, you would get your ass kicked out of here..

https://bitcointalksearch.org/topic/reddits-science-forum-banned-climate-deniers-374873

Its a matter of how to go about this so-called ponzi scheme am I right?

Try to see it similar to how you would spend $20,000 a year going to college and pop up with a job. Thats a ponzi scheme as well too, it all varies on how your approach.

This is first he writer about bitcoin
Why Bitcoin Will Never Be a Currency—in 2 Charts
Bitcoin could be Paypal 2.0, but it will never be the dollar 2.0. Not when prices would have had to fall 98.5 percent the past year if they'd been set in terms of Bitcoin.
http://www.theatlantic.com/business/archive/2013/12/why-bitcoin-will-never-be-a-currency-in-2-charts/282364/

Matt O'Brien has been Anti-Bitcoin for at least 2 years as far as I remember. He was in The Atlantic.

I love how journalists like this think they are smarter than people like Reid Hoffman, Richard Branson, Marc Andressen, Etc. Putting all the technicals aside, the author thinks all of these people are stupid enough to invest and sing praises of a ponzi or pyramid scheme.

It is wrong bitcoin is the future currency and will be used commonly by all people in duture

Sorry for my bad english im not spoken in english

Please write in a language humans can understand, thank you.

Bitcoin is decentralization system, it took more than only HOLD , miner need cost to life,also  scamer  hacker and cheater is live in bitcoin that why we need more than it

If everyone hold bitcoin for 10 years and start to cash out a little bit since the 11th year, the bitcoin value will rise forever, this is guaranteed by bitcoin's design

There is an academic understanding that fiat money's value is decided by its usage, that is because it has almost zero production cost and forced adoption. However, gold and bitcoin's value does not come from transaction usage, they are mostly decided by the demand of storing value and current production cost

In fact, holding will reduce the coin supply on market in a most significant way, while spending will only reduce the coin supply on market for a while (when coins are in the move, they are not available for purchase/spending). Holding 10 bitcoin is equal to spending 10 bitcoin once every hour (suppose the transaction take 1 hour to confirm). The only thing that spending does is to increase the awareness of bitcoin, but you don't really need to make advertisement for something that have true value, you hide it instead, wise people will find it by themselves

I was going to quote this as well. It honestly has some truth to it. It's what almost everyone wants the concept of bitcoin to be. "I hold it, 10 years from now, I'll be rich".

This isn't the concept of what bitcoin should be about. I feel like some of the "get rich" type of investors will circle around bitcoin like sharks and give people that type of notion about it that Bitcoin is just some investment scheme hoping to one day crash fiat. I do feel he's exaggerating though on title.

Some good points, and more debate

Take a look at Gold: Central banks acquired gold as low as $35 per ounce many decades ago, but its market price is always decided by the current mining cost of one ounce gold. This is because the existance of arbitraging: If gold price is much higher than its mining cost, everyone will mine it and sell it immediately to get an immediate profit, this will drop its price to the cost

Furthermore, the resrouces going into gold/bitcoin production is to achieve one goal: To set a reference value for them. People value things using difficulty: The more difficult to get something, the more valuable it is. If it takes one day's mining using an ASIC farm to get one bitcoin, then bitcoin will be much more valuable when it took only one hours using a notebook to mine one bitcoin

No matter how many times bitcoin will be used, the lowest possible cost to get it will set its reference value, and that cost typically comes from production

Of course, doing something extremely difficult might not necessary generate demand, but if there is sufficient demand for bitcoin, and there is no way to further reduce the difficulty to acquire bitcoin, then cost will set a reference value

Gold never dropped back into their old $35 zone, this is obviously caused by fiat money inflation. Banks use printed money to purchase many different assets, and gold is a very popular asset, so the demand is always growing with more fiat money supply. But like described above, gold price can not be much higher than its mining cost due to arbitraging. Money printer who want to purchase as much gold as possible and as cheap as possible will invest in gold mines

Similarly, the demand for bitcoin might be extremely high, but as long as the cost is low, all the serious capital will first flow into mining, thus its price will always be close to mining cost. And when there is no way to further reduce the cost due to competition, capital will have to purchase on market, cause the price to surge

Agreed I think it is too early to come at any decision we bitcoins still need a time to settle down as it has gone through many ups and downs in the past once the prices are stable it will regain its shine.

What you said sounds like its reasonable, but it's really carefully crafted to hide the logical fallacies.

Let's say, for the sake of the argument, that bitcoin's price will stabilize at around $1000 USD present value in 2030. Sure the marginal cost of creating 1 BTC at that time will probably tend to 1BTC. However, for all the bitcoins created 2009-today, and probably in the forseeable future, the cost of those BTC created is MUCH lower than $1000/BTC. Therefore, by your logic, the cost of creating BTCs will be averaged out too.

Furthermore, the assertion that half of the resources go into the production and securing of bitcoin is simply wrong. A bitcoin is not a plastic fork. You can use it more than once. You can use it thousands of times, millions of times or even more. The money that miners spent on electricity etc doesn't go into the abyss; they go into the hands of other people who will then use that purchasing power to buy other stuff. That money will circulate many, many times. So the creation of BTC will only be a small part of the economy.

People tends to miss the huge cost associated with fiat money

The cost of making fiat money is typically a war, and the energy consumption of a war could be billions of times more than bitcoin mining, not even mention millions of lives involved

In fact, even after you conquered a country and start to print fiat money without any cost, you still can not make sure that those paper and numbers will lose their value dramatically, because they have to stand against the speculations on foreign exchange market. So central banks have to spend many more times fortune than bitcoin mining to build up their foreign currency reserve to protect the exchange rate of their local currency

Those costs were mostly hidden from the citizen for that country. Everyone working in the country are contributing to the value of its monetary system, just they don't know. But for bitcoin, if you don't care, you contribute absolute nothing, only miners do the work, so the efficiency is extremely high

This author have indeed done some research and thinking! The catch 22 part especially has some insight

However he's view is not enough deep: People will not store their bitcoin FOREVER, when their coins have appreciated enough (typically 10x to 100x), they will start to spend at least some of them (Speculators might dump all of them after a 10x increase, that's the reason for large price fall after a bubble)

And this behavior is self-supporting and long term sustainable: Saving for the long term and spend slowly in future will not change the shrinking supply nature of bitcoin. So, just like a pension plan, with a mathematically guaranteed return, that's the most attractive part of bitcoin

I know you're probably a throw-away newbie account, but I'm gonna respond to this anyway.

No, it wouldn't really be that absurd, actually. In many countries, the cost of making a penny ($0.01) actually exceeds the value of the penny.

The thing is, the cost of manufacture/production does not really matter to anyone except the manufacturer/producer.

If I had a car, I don't really care how much the manufacturer spent to make it; I just care about its market value (i.e how much I would pay when I buy or get when I sell). If I then sell my car to someone else, he does not care about the cost the manufacturer incurred to make this car either.

It's the same with money. Whoever owns the value only cares about the value, and not about how much went into it. The less the cost, the greater the profit for the producer. In the case of government money, it's the government/central banks. In the case of bitcoin, it's the miners. However the cost of production has no bearing on anything else.