Topic: Con (Read 2060 times)

If anyone thinks mining produces coins for free they are welcome to pay my "free" electric bill.  And don't forget the "free" cost of my hardware. Mining is far from free.  Banks pay for computing power to process and secure their transactions, Bitcoin pays for the same to anyone who wants to pay for the resources.

Great set of questions, mav.

I think most people don't actually understand what pyramid/ponzi schemes really are and so explaining how bitcoin is different is difficult.

The mining subsidy definitely comes across as free money. We need to make it more clear that this is payment for securing the network.

Can someone provide an argument how it is a scam?

i think one of the main problems with that - and society in general - is, that they expect you to only do something (investment, work, ...) if you will get money from it. so, they assume you assume to get rich because you are interested in bitcoin.

problem is: nobody here ever told you, me or anyone else to get rich, e.g. "+150% in x months, guaranteed", or shit like that. also, there is no entity who would actually claim to send you anything anytime in the future.

so, my point one explains why they think this way, basically a way how they were educated when growing up (at least, that's my strong guess) and point two is my answer.

There seem to be three main reasons that people think it's a scam.  It looks like a Ponzi scheme.  It looks like a pyramid scheme.  You can't just make free money with a computer program.

Bitcoin is not a Ponzi scheme.  In a Ponzi scheme you have a 'manager' who cheats and pays profits to old investors out of out of new investments.  Even though the so-called early adopters can capitalize on the high prices, the exchange is transparent, and no funny business is going on.  There is no centralized manager who can cook the books.  All exchanges are transparent.  It's similar to buying stock in Cisco 20 years ago.

Bitcoin is not a pyramid scheme.  A pyramid scheme involves kickbacks to your superiors, and exponential growth.  Everyone needs to find X number of people to work for them.  Neither of these happens with bitcoins.  Once again the so-called early adopters may be making money off of you, but it's not through kickbacks or direct recruitment.

How can people mine coins on their computer for free?  In this case the term mining is misleading.  Mining is actually a side effect.  In reality, when people 'mine' they are securing the bitcoin system.  They are securing a transactional history that accounts for every coin from it's creation to it's current location.  As a side effect of securing the system, they are paid a small reward in bitcoins.  So they're not getting free money.  They're getting a reward for their work in securing the network.

Ask for them back and wait to (hopefully) rub it in their faces in a few years.

Gave physical bitcoins, he laughed for about 10 minutes and thanked me for the prank gift, then asked me where the real one was.

This is that post:

I would approach this the Socratic way, by asking questions to help the person realise by understanding rather than just trying to impart your knowledge directly to them.

Is fiat money a scam? (of course you expect to hear a resounding 'no')
Is it a scam that governments and banks can print as much money as they want?
Is it a scam that because of that, fiat money is worth less in the future than in the past, eroding the value your savings which you worked hard for?
Do you really think that people, when given the power to print money, will not abuse it?
Who regulates the printing of money? Do they do a good job of it?
Is it a scam that there are a few powerful people pulling the levers of the economy?
Are you happy with a few people telling you what is valuable and what is not? Because that's essentially what fiat money leads to.

What are the benefits of gold as money?
All those benefits are why bitcoin is also good compared to fiat money.
What drawbacks are there to using gold?
Bitcoin has solved those problems also.

Are shares a scam?
Why not?
What about if you bought apple or google shares when they just started up, is that a scam? Why not?
Are shares in [valuable but socially/environmentally damaging company] a scam?
These are exactly the same reasons bitcoin is not a scam.

Is paying with cash a scam?
Why not?
What is good about paying with cash?
All the reasons you like cash are true of bitcoin also.
What is bad about paying with cash?
Bitcoin has solved this as well.

Do you know about (any of the more advanced economic things such as options, futures, derivatives)?
How many people in the general population understand these concepts? (not many)
Does that make it a scam? (no)
Why not? (they could find out if they wanted, the detail doesn't need to be known about by most people... etc)
Same is true of bitcoin but moreso, because the basis of it, the code, has been reviewed by experts and validated as not being a scam - if it were a scam it would be apparent in the code immediately and nobody would support it at all.

Do you ever get spam from Nigeria?
If it said [the name of the bank of the person you are talking to] in that email, would you say [their bank] is a scam?
The same is true of the services surrounding bitcoin - just because a third party is untrustworthy, it does not mean the core concept is broken, just that the services surrounding it needed to improve, which they have.

Ultimately the value of something reflects the value of it to society. Or rather, it SHOULD do that. Fiat money greatly clouds these issues because it funds unpopular wars, undesirable corporations, and excessive bureaucracy. Bitcoin is not a scam because it allows the true value of goods and services to be reflected in their price.

Of course if you don't know your shit you can get your arse handed to you, and even if you do know your shit you will be into a rollicking argument very quickly, but these are all interesting questions that should at least begin to impart doubt into the minds of people who think bitcoin is a scam. At the very least it will hopefully make them realise it's no LESS of a scam than any/most other monetary systems.

I gave away a bunch of Casascius bitcoins and continue to do so.  I think they are one of the best ways to get people interested, especially once I walk them through looking up the balance in blockexplorer and emphasize that the coin they now posses is the only key to that balance.

One of my friends is a very bright engineer, but super skeptical and very condemning of what he perceives bitcoin to be.  I gave him a 25BTC coin for Christmas and now he's annoyed at me because he had to admit it was pretty cool.  He probably wouldn't have given me the chance to walk him through anything had I not given it to him, but when you give someone a coin you are creating a personal interest in bitcoin for them.

I posted about the differences between Bitcoin and a Ponzi scheme some time ago. There might be a few points in there you can use.

mav has some very good advice here:

https://bitcointalksearch.org/topic/m.663017

Nice! Many thanks for the link

https://bitcointalksearch.org/topic/the-casascius-10-btc-silver-round-is-here-pic-53492

Can someone post a pic or link to a photo of the 10 Btc silver coin as I can't find one on the Cas site - many thanks

This works, I did it. And when I bought and gave the coin the silver was worth more than the bitcoins.  Now he's buying 1 BTC coins to introduce Bitcoin to others. It is hard to give the silver coins away though, they are very nice looking coins.

Buy them a Casascius 10BTC silver coin.

It's hard to argue the coin has no value, because it's made of silver.

Then slip in the zinger: "the bitcoins are worth more than the silver right now!"... "a couple weeks ago, it was the opposite... but since then, silver has gone down and bitcoins have gone up".

Time for new friends! We'll all be your new friends. Or, you could buy one of them a gift, like a book from Amazon, and write in the front of it that this book was purchased with Bitcoin from me to you (or something like that).

This... who is scamming you?  Regardless, haters are gonna hate.  If they give you shit, quit talking to them about it.  Some of my friends are receptive.  Others, I have to patiently wait for wider adoption before I can say "I tried to tell you".  Only one has invested anything so far (he provided a small amount of USD that I matched with BTC for my liquidity bot to play with), so even if they are open to the idea, most are still skeptical.  Only time will solve this.

give them a 100 Btc Silk road gift card for new years

Well, for starters, you can emphasize that there is no single organization in control of Bitcoin.

Can someone find any way I can explain to people that bitcoin is not a scam? My friends keep telling me i am being scammed when I buy bitcoin