Topic: The most irritating bitcoin misconception that needs explaining? - page 2. (Read 4482 times)

Retarded comments along the lines of "Bitcoin is nothing, it isn't even real, it's a bubbly, it's air, it's worse than the tulip mania, you're paying something for nothing" and so on.

I always feel a bit depressed, having to the absolute basics explain YET AGAIN. Would be great if there is a short, yet crystal clear explanation against this sort of bullshit, that I can refer to.

So I thought it was both:  Bitcoin is the transfer system with the trust, and bitcoin is the currency.  Maybe this is what needs explaining ...

^^ That and also the Ponzi or Pyramid scheme.

Plus another thing I get all the time is:
How can Bitcoin not be a Pyramid? it has nothing to back it up (Gold, etc). It's not even physical. You cannot touch it.
If you can create a short clip explaining that it would save A LOT of us sometime trying to explain it

Thanks

Add another vote for the ponzi scheme.  Not necessarily a misconception but how about an episode where it is clarified where Bitcoins come from.  More specifically, how the block solved reward system works.  "Who put the Bitcoins in the block" is a common question.  Something that answers that in an easy way would be beneficial IMO. 

one misconception that pains me is that folks assume that you cannot buy fractions of btc

How miners can generate Bitcoins with their computers and why they (the audience) can't.

Perhaps the Bitcoin exchanges are not Bitcoin itself?

yea when I hear it is a ponzi scheme it irks me because people were running around like chickens with there heads cut off trying to get others to invest and see the value in it....  Their were also many people giving away coins to anyone interested for a while until the "crash" took place and people lost good chunks of change.

 You don't have to buy 1 whole Btc   

Does the sudden silence indicate people are tired of my stubborn persistence, or that I was able to effectively communicate a "winning" argument.   
// I am only 1/2 serious, it hasn't been the best day; Please pardon my odd humor. 

I just defined money for you.   Its an IOU.

Bitcoins are "mined".  Money is like for a carpenter to buy  bread but the baker doesn't need a chair.   A bank creates notes so these people can exchange stuff.  But these notes have to be backed by assets or credit

How does bitcoin do this?   It doesn't.  Its a public ledger that tracks exchanges using a network.

Its more of a transfer system than money

If a company "goes bust" it still had intrinsic value before which is what caused it to go up in value in the first place. People invested in the company because they thought it would be successful and provide some valuable product/service to the world, and therefore rise in value. They are investing in ownership of the provider of this product/service. When you invest in bitcoin, you're investing in something that does not have intrinsic value and only holds value because people TRUST that it does. Once again, this is different from investing in a company because people make these investments because the actual product or service the company provides is intrinsically valuable.

The only intrinsic value of a tulip is that it's pretty (at least as far as I know). And to say something has intrinsic value because it is useful as a currency really does not make sense. Anything can be used as a currency - honestly gold probably holds the most intrinsic value of anything in that regard.

...the first half
The 2011 "Bubble" lost over 90% from top to bottom, so we had one complete Tulip cycle.  


I'm not looking to "win" a debate; My point is about similarities.
(For example)
 comparing it to a Ponzi

"We need new money coming in"
"The early investors/miners are way to wealthy!"
"Careful the bubble might burst"
"First one out the door gets the best prices, sell before the whales".
^^^
The above quotes are all said about Bitcoin (even by many supporters), and they are also true about certain stages of a (temporarily) "successful" Ponzi.


Is BTC a Ponzi?

Q) Does a single person reading this post remember Stock Generation?
http://en.wikipedia.org/wiki/Stock_Generation

I never invested a penny, but I was curious.
Q) Does anyone reading this question remember 'hundreds of posts' on the Stock Generation forum about members (literally) looking out their window hoping to see the UPS/FedEX truck pull up to deliver a check?


Bitcoin is not a Ponzi
Observing some of the people here, you would never know the difference.
...Oh look, another new crapcoin is launching:
https://bitcointalk.org/index.php?board=159.0

Slight exaggeration there. Wasn't even a couple days last time I sent a transaction without a fee.

I would say the 0 transfer fee for sending bitcoins!, this is total BS. This came from someone working in a bitcoin related company.

You have to pay the fee or wait a few years for tx to arrive.

Because he's using the example of a company (or having shares in one) having "intrinsic value". It doesn't if it goes bust. And didn't tulip bulbs had "intrinsic value" then too? People were using them as medium of exchange and you could also grow them.

I see where you think it's similar. But when you buy some other 'investment' like a stock, there is something BEHIND that backing that. If you buy Disney stock, there is a company 'Disney' which the value in the stock is related. The stock cannot just go to 0 if people still believe in Disney, and Disney is still making money. Eventually most people will not believe Disney is worth the value in it's stock price - and sell it, and the stock will fall, but it won't fall forever, the value will reach a point where more people believe that Disney is worth more money than it's stock price, buy more of it, then it will rise. In a stable company, the price will rise and fall, but generally settle in an area.
 
Investing in bitcoin is investing in something that has no intrinsic value. Nothing is backing it. This is one part of a Ponzi Scheme.

The other part of the Ponzi Scheme is that people early in get bitcoins for free or with no real effort, and it's exponentially harder for anyone else to get them. Yes, people who were with Disney early get more stock options than those that come in later - but they don't get it for free. They worked hard - were usually underpaid for what they did, and did it for a long time before getting stock options. The stock options were their 'reward' for working so hard.

Another part of the Ponzi Scheme is that you need more people to join your cause to make it's value rise. And a cult-type following occurs. This is not true of a stock. Sure, the more people buy the stock, the more it might rise, but it can't rise just by people buying it, because at some point other people will sell when the value skyrockets too much, and the stock will stabilize. Lots of profits are made in stocks when a group of people buy a stock low, advertise it and pump it up like crazy (and lie about some 'secret' thing that they say will make the stock soar) until other people buy it based on their recommendations, and then the original people sell, and the newcomers are stuck with stock they paid too much for. This happens all the time, and is just as bad as a ponzi scheme, and is illegal.

So, yes, bitcoin has a lot in common with a ponzi scheme, but it doesn't necessarily make it one. If bitcoin eventually becomes a currency, the ponzi scheme aspects of it will be forgotten.

Um ok dude.... go look up the meaning of "money" and get back to me.

I mean, bitcoin objectively has zero intrinsic value =/ neither does a dollar bill really. Just so we're on the same page as far as what intrinsic value means, the intrinsic value of a dollar bill doesn't go much beyond its use to snort cocaine or write on. Compare a hundred dollar bill to a hammer - the hammer honestly has much more intrinsic value despite the fact that it is not worth $100. Intrinsic value means the value of the thing in itself, and not the value that you can obtain from it by trading. If someone had all the bitcoins in the world but nobody was willing to accept any of them or give any money for any of them, they would be worthless because they have no intrinsic value.

And it is true that the value of bitcoin comes from trust only... it is not backed by the government and it has no intrinsic value - we trust each other to attribute value to it. I personally don't see this as a problem, but it's still true. It's value as a currency is easily replicable, as we can see with all of the alternative cryptocurrencies.


I don't understand what point you are trying to make. If the company goes bust then you lose money, but it's still different from the tulip craze because the company has (or had) intrinsic value. It didn't become valuable because people trusted that it would, as was the case with tulips and as is the case with bitcoin. It became valuable (presumably) because it produced a desirable product.

^ this

I hear this all the time, no one ever has a logical argument to back it up, but yet they regurgitate the opinion everytime btc comes up in a conversation