Topic: The Bitcoin MINING PONZI SCHEME (Read 4392 times)

Hardware industry is a part of the bitcoin ecosystem does not mater if it is/was your CPU/GPU/ASIC the problem on your equation is that you pay your electricity in fiat.

Man I was with you all the way until right here...lol

Just to be clear, mining is doomed to fail and it is impossible to make money doing it.  the only problem with this idea is at least in my experience, I've been making a living off mining for about 2 years now.  I pay for electricity, and my miners.  as difficulty has gone up, I've actually been making more money as I've gotten better at the business that is Bitcoin mining.  buy the right hardware, from the right firms at the right time.  make money.  blindly purchase miners with no business plan or understanding of where in the production cycle we are at, and get dissipated when it turns out they aren't get rich quick fool proof money printing machines... make a post like the OP. 

as for whoever commented that my education was a waste, I got a full acedemic scholarship to SUNY stonybrook, and while I learned more from my self study and actually trading for myself, I did learn things in college, for free, as well as got a degree.

that allowed me to get a job with a hedge fund where I made many valuable business contacts, a whole bunch of money, ad well as an education on how trading and economics really works from an 'inside' perspective. 

Education.  don't knock it till you've tried it.  you just might learn something.

 again, uneducated armchair fox business news economists claim to be unable to make money mining.
educated student of economics and business who actually put in effort to learning as much as I could about finance... has been and continues to mine profitably. 

either the money in my bank account and the roof over my head, and the car I drive, the food I eat and the sexy girl I enjoy these things with are a figment of my imagination... or my education made a difference and allows me to make a good, and growing living off of mining.

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What I just read here is, Bitcoin is doomed to fail because of its qualities and innovations that make it revolutionary, and different from currently established means of exchange, and in the case of bitcoin much, much more.  These innovations will make Bitcoin so popular that speculators (that every aspect of the world economy is speculated on be damned) will cause undue volatility, instead of less volatility due to increased trading, and speculation creating more volume, more buyers and sellers, with different ideas about if the price will go up or down, trading different time frames, some market-making. 

Thinner trading + speculation = higher volatility  Thicker trading (which the surge of speculator money will surely create, more $$ betting, higher volume) + speculation = lower volatility, the price will still move, but if you look at any currency or commodity, or stock their prices move all the time, often wildly.

Bitcoin is at the very beginning of its long journey, when a company like Apple goes from $1.00, to $10.00 it is thinly traded and very volatile, as it goes from $10-$500, the volume goes up, the higher the price goes up, as the number and amount of speculation goes up, reducing volatility.  We are in the $1.00-$10.00 stage for bitcoin now, when we are up at $10,000, or $40,000, or heck $100,000 according to some analysts, I assure you the volatility will be lower.

Also, the deflation problem does not apply to non-fiat, based economies where they are built on credit, and leverage added upon leverage... That's where deflation is a "bad" thing.  It doesn't apply to something like Bitcoin (Gold 2.0, new and improved for the 21st century), or Gold.

Sadly I think that there will never be an equilibrium with bitcoin. The price will go up and down and there will be periods where it's not profitable to mine because of the utility cost. The fixed coin supply will always keep the market attractive to all kinds of manipulative games.
And the thing that disturbs me the most is the lack of gain with the increase of the network. It's like people are paying each other to simulate work instead of doing real work that has any gain.

Scrypt wasn't intended to be GPU proof. The trick with scrypt is that it's hashrate is mostly dependent on memory. So, you can't make specialized chips to make the process faster.


The cap between GPU mining and scrypt ASICs won't be big because of the previous reason. DDR5 memory is expensive and set with one price. Meaning, scrypt ASICs won't be much cheaper then graphics cards. They can even be more expensive because of the smaller production scale.
Scrypt ASICs can gain most on power efficiency, but the cost of production per hashrate won't be much cheaper.


I agree with you here. Bitcoin was revolutionary and a beautiful piece of art in general. But no matter how I look at it, I don't see it supporting modern economics. The current fixed supply creates too much deflation and it makes bitcoin too attractive to speculation. When something is this attractive to speculation, then it won't ever find stability. Only thing that changes with increased market cap. is that players get involved with deeper pockets and better knowledge on how to manipulate an unregulated market.




I think that the main question that will begin the downfall of bitcoin is "Who are the owners of the majority of bitcoins?". We know that for years bitcoin was mostly used for drug trade. Meaning that there is no way to be sure that the majority of the bitcoin owners aren't really drug dealers. And there are plenty of high profile bitcoin thefts, including the current MtGox situation. Soon the government will start asking what guarantee does bitcoin have that new investments won't actually go to fill the pockets of the criminal element, like drug dealers and hackers. And the answer to these questions will be that it's better to start over from 0 and on a base that isn't so suitable to the criminal element then bitcoin was at the beginning.

Probably alot of people jumping in, late to the game.

And also alot of people see profits when they first buy the machine, but dont know their investment in hardware is depreciating faster than the rate of which they can mine coins.

People will still mine though, some have free electricity.

Other will speculate a short term loss if the value of BTC goes up in the future.

Other still as a hobby, and some to help contribute to secure the network.

Newbies will still fall for the pre-order trap, so this is a free loan to the asic manufacturers to build newer stuff and use it for awhile before they sell (used) equipment.

"Crypto Begger makes 7000 Dollars a month with this Secret that Asic Companies DON'T want you to know!" 


 



Maybe he falls into the category that thinks that spreading fud about mining will magically make the difficulty go lower.....Let's be real here, why does difficulty go up if Mining ISN'T profitable???

Being able to change the script to defeat purpose built technologies to take advantage of a community project would be a good thing for all the coins, keeping what the original author intended for the crypto coins.

And standard computer equipment can be used for many purposes so it keeps better value.

Who wants a used old obsolete asic later that cost more to run electricity than it mines btc. 

It seems to me that it will always be possible to Bitcoin mining slightly profitably if you have free or dirt-cheap electricity... but with standard computer hardware, the reward isn't worth the time exertion of doing it, and ASIC hardware costs more than it can recoup through mining.

So I think Bitcoin mining is dead. If you find enjoyment just from running a mining operation, I say you might as well go solo and treat it as a lotto ticket.

I can see a trend - the number  of people who ask for donations, who actually beg for donations, is rising. That's actully threatend me.  

Here's what I just saw....

1) Bitcoin is a scam.
2) Please give me Bitcoin.

hmmmmm......

Ripple is long since dead.

Bitcoin mining is bad mkay...

plz donate money

thanks

Wait are you a shill for Ripple(XRP) ? 

I certainly didn't like when KNC announced Plan B, that was a bit of a shock and many of the business practices from ASIC companies can be a little worrisome. That being said, the bitcoin mining process is not a ponzi scheme.  As an investment, bitcoin is very high risk, I don't think you'll find anyone who will say that bitcoin is a safe investment with promised returns of profit and no risk.  In my opinion, KNC and Avalon are safe buys, I've purchased from both, received hardware, mined, and have had a return.

Also, bad form for the OP to beg for donations from something he/she is bashing on.

I agree completely


Again I don't see any advantage of an ever growing and centralising mining industry. The upside of the ASICs is that they cannot be used for anything but Bitcoin mining, so if we find an equilibrium, where it is unprofitable to run a professional and profitable mining operation (Server space is expensive and the cost of something going wrong, hiring extra personal etc. is very risky). So why would you turn off your ASICs then, as they cost you a lot of money, and will at some point stabilise until the next big thing comes along. So the upside is that thanks to ASICs, even if BTC prices drop for a while, the network will not die. And once there's a lot of money involved in this industry, they will also do everything in their power to keep Bitcoin alive.

Not to say that I lost a lot of money on batch #3 Avalons, but made a good deal more than ROI with my KnC Jupiterss (I must've been very lucky if I read all the negativity).

First of all we need to get rid of this pre-order nonsense. An ordinary company seeks investors, works unbearable hours as not to dilute to the investors, and brings a product onto the market directly for sale. That's how Bitmain operates and that's why I think they're one of the few with still a good reputation. I never went below ROI on a Bitmain, as I could calculate with less error margin when I would ROI and what my expected profit would be.



I disagree on several points.
- If I recall correctly, scrypt was intended to be GPU proof as well. But correct me if am wrong.
- Scrypt ASICs are hitting the markets, and are in my opinion a bad investment for those just a little late to the party, since the developers of the scrypt coins one of their ambitions was to keep ASICs out, and so I think is the reasoning of most miners. Also the difference in hash rate is not spectacular, just the power consumption. So if majority chooses to alter the algorithm, your scrypt ASIC miner is worthless.
- Bitcoin introduced lots of innovation and solved the problem of making digital items scarce, through the use of a public ledger. It was the first to market and revolutionary. Other coins might be better, I certainly hope so after all those years, but they evolutionary.
- It's all about market cap and money, why would any business switch to a coin with a lower market cap. A 5 year hype is a feat by itself, I honestly think it's more than that.

But from a miner's point of view, I agree GPUs were fantastic, you could sell the hardware and upgrade with minimal loss, since it has other purposes. The companies behind them are mature enough to ship massive quantities and the mining sector comprised only a small part of the use case. Just trying to look at it from many angles, and not intending to disagree with you totally.

I don't think that it's a ponzi, it's more of an bubble and an abomination on the original idea behind bitcoin.
The original idea was to keep the bitcoin network spread out because everyone who has a computer, can be involved with mining bitcoin with their existing CPUs. That means that no additional resources need to be wasted to create machinery that supports the bitcoin network and only electricity is used. ASICs ruined the entire concept and actually started to reward those who contribute most to unnecessary wasting.

The idea should be not to build faster and faster hashrate, but to keep the hashrate down and the network spread out as much as possible. The network doesn't gain anything with increased hasrate, no speed, no security, no anything. People are just buying ASICs, so they could get a piece of the bitcoin hype pie, while actually not realizing that their ASICs contribute to absolutely nothing that could be considered relevant.

Scrypt is better, because it uses the existing GPUs and therefor no new hardware has to be created to chase a worthless goal. Primecoin is also very interesting because it can still be run only by CPU. A lot of people who aren't into gaming don't have good GPUs for other uses, but everyone has a decent enough CPU, and so it's easier to keep the network more spread out. But the price isn't currently set by how good is the quality of the coin, but hype is the thing that sets the price. And Bitcoin has almost all the hype.

seen about 100 of these threads its getting a bit boring now

well, back to using the gambling and faucet site then.

Time to tell people again that buying BTC itself is a better investment....

Unfounded, unresearched FUD followed by begging for Bitcoin, classy OP

how many bitcoins are there? how many will there be in the end? will it be a currency or a store of value? who knows? not you. not me. all I know is that my machines are cranking out fractions of btc. if it's worth lots or not a bunch who cares this is fun and also i don't like the idea of a private entity being responsible for the valuation of the currency i elect to use. this is as close to a free market as I will see in my lifetime.

significance of bitcoin, people are aware it exists perceive it cannot be tracked or regulated and majority of users assume it cannot be double spent.

also, economics=supply and demand i.e. I want that, it must be valuable in some way to me. Learned that trading jello for cookies when i was 5, hope you didn't pay a college for that one. if you did you fell victim to an imagined need, congrats on falling victim to the economics of education.

Well, that just makes the other people who haven't dedicated their lives to learning about econ and ccy systems look extra silly.  I was trying to let 'em down easy lol

As an undereducated average person it is not difficult for even me to grasp the significance of bitcoin. It may be my Silicon Valley roots? Everyone is excited about the currency aspect (so am I) but there is something more to this, that not only has the potential to change the way we use money but they way we do business (colored coins; attached/referencing contracts?). Public ledgers, peer to peer, instant notarizations ?
We have been advancing in many ways but our financial systems are far behind in innovation. We keep trying to patch up failing systems? This may be a bridge OR it fails.
In my old business (real estate) my goal was to incorporate tech into my business at every opportunity, it didn't always go well with agents still hooked on cumbersome ways. If an agent had gone into the business during a time when listings were kept in a file ( in a real physical friggen file cabinet y'all ;-) They were frequently befuddled by our MLS (The MLS Multiple Listing Service is the online database to properties for sale, tells what is for sale, what is in contract for sale and everything  that had sold for 10 years)
"Radical change" is not always greeted easily but we're overdue and it's here.

What about all the people who have been making money the whole time, and have approached mining as a business.  Economists, experts in currencies and central banking... People who truly understand what bitcoin is, and how important and revolutionary it will be.  My college education (paid for by predicting the crash in 2008, then buying gold with those profits), over a decade of profitable forex trading, and a few years spent as a trader for a hedge fund, are telling you to do more research and try to really understand what bitcoin is, and the mining isn't a money printing machine.  It is a business.  Not everyone will win.  Those who understand that mining is one facet of a profitable business model used to get in on the ground floor of the most revolutionary innovation since the internet.

Remember, no one was ever going to have use for a PC in the home, and the internet was dismissed as something for silly hobbyists.

As a self confessed low post count noob, I decided to buy some asics/block erupter/cube/bitfury's to work out everything above. Its been a good (well, ok) investment from a learning angle anyway, but absolutely not from a ROI point of view.

Sadly, I have to concur, I think the greed of the human race will be ultimately destructive for the bitcoin (and cryptocurrency) concept. Fun while it lasts though!

I have been telling people for months to not buy ASICs, but they aren't listening to me, as can be seen by the climbing difficulty rate.  It edged up to 2.6 BILLION today!  I have even explained how the ASIC manufacturers are using the machines for a while before shipping them, and they'd be idiots not to.

But as far as donating money to a no post count noob like you.... NO WAY!

READ THIS!  Ok sorry to be the one to break it to you guys, but you guys a part of one of the best PONZI schemes ever.  Mining companies such as KNC, Cointerra, Hashfast, and Butterfly labs promise high hashing power for thousands up front with no guarantee on results.  Case in point....1.7 ths and 2000Watts for the terraminer that was going to be 2.0 and 1200 watts.  Not to mention the difficulty of bitcoin has made everything obsolete that isnt being used by one of these companies.  Next, KNC that now says if you bought a NEPTUNE they will hash it for you for free when they are done.  Mean while "Plan B" consists of building a the most powerful bitcoin lab in the world and giving bitcoin to the buyers of the computers....However, with the difficulty rising, the mining rigs will obsolete.  tWhat a great idea sell MILLIONS worth the computers, then use the money to build them.  And instead of sending them to you, why not mine them for a month or 2 and make a few thousand bitcoins (http://eligius.st/~wizkid057/newstats/userstats.php/1Nbq2XZaRsKknf5fcT2wTXvBS31PaUWSeX) then send them to the rightful owners once they are just expensive paperweights.  And since most of you paid in bitcoin for these miners......its not traceable, nor can you prove the fund were sent.

Dont you all see a resemblance between all of these companies that sell mining rigs? None can produce anything to keep up with the difficulty of mining bit coins. If you are asking why....You should just give me all of your money, because you dont deserve it. They use your nonrefundable deposit to build these computers, then use them to mine coins, then pass them off to you as a nice expensive PAPERWEIGHT.

PLEASE, PLEASE just donate bitcoin to me at: 18aNxNC7gA1foAAS9gd8E6Co14PyUqgsYH. Why? Because i would hope that some of you that read this will save some money and not get wrapped up in a scam. You are better off just buying bitcoin and holding it. STOP WASTING MONEY AND ELECTRICITY!

AGAIN, donate to: 18aNxNC7gA1foAAS9gd8E6Co14PyUqgsYH ............my college education depends on it. THANKS!