Topic: The Multi-level Marketing scheme argument (Read 5988 times)

Hey Synaptic is famous!    http://www.youtube.com/watch?v=p_M-lildu8w

MLM is one of the most effective ways to sell something, and it is all around us.

The nightclub that gives you a free limo if you bring 10 friends is using a MLM scheme.
Your house is marketed and sold under MLM.
The millions of retail jobs in North America pay commission to the seller, the store that owned the merchandise, and the distributor that sent it to them.  MLM

MLMs were looped in with "pyramid schemes for some reason, and that gave them a bad name.  The biggest difference in a true pyramid scheme is that you can never make more money than a person above you.  People on the bottom of the pyramid schemes make the least money.   All Pyramids are MLM.  Not all MLM's are pyramids.

Bitcoin is neither a MLM or it's subset Pyramid Scheme.  It has the same value to the buyer and seller regardless of how each was introduced.

why you guys carry on troll thread?

guy admitted his trollinz numerous times.
quite a mean little fellow too, having seen him around multiple times just being mean to people by his own ommision for no reason other than his enjoyment.

Hahaha.



Whoosh. That's the sound of you missing the point.

I just got trolled, didn't I? 

Synaptic's claims are outright ridiculous, and I assumed he was trolling.  But it also seems like no one has given a thorough reply to his specific (moonbat) criticisms, so, at risk of feeding a troll, I will do it.


You misunderstand what is meant by price-fixing of products in the context of MLM -- that criticism refers to how they keep the products' prices fixed regardless of the economics, through a contract between all of the distributors and the company.  There is no such price fixing in Bitcoin in that sense -- it's too decentralized for anyone to conspire to fix the price of anything in bitcoins.  Also, bots aren't an official part of the system.

As for the early adopter thing, we've been over that here a thousand times: this is no different from buying shares at an IPO that turns out to become hugely profitable.  If it turns out that your investing in the IPO enables significant productivity gains, you make a lot of money.  Likewise if you "invested" early on to get Bitcoin off the ground and make it a respectable currency, you could make a big profit if it gets to that stage.


No, the software is free, it costs virtually nothing to start trading stuff for bitcoins.


Who's doing the emphasizing?  The project leads sure as hell don't, and you don't have to deal with any kind of indoctrination from that kind of person in order to use bitcoins.


No one's required, and they're only "encouraged" to use those vendors because, um, those are where you can spend your bitcoins.  It would be different if people were pressured to make non-Bitcoin purchases from vendors that accept Bitcoin, but that's not happening, and if it were, it's not because of the "owners" of the non-existent "Bitcoin company".


WTF?  Most people heard about this online, not through some "personal relationship", and unlike MLM, you're not required to go through an "upline" or licensed agent or whatever to get involved.


What's the "Bitcoin compensation scheme"?  Are you talking about the transparent miner policies?


Alright, where are these cult-like Bitcoin activities?  Where's the Bitcoin worship meeting?  Where's the pledging fealty to a leader, etc?


Er, the existence of independent distributors, and commission-based salespeople isn't what MLM is criticized for -- that exists everywhere.  You're just misreading the article now.


Biggest phail.  There is no "bitcoin company", and the p2p network is not at all like one.  The transaction processing fees and block rewards exist simply because enough people follow a protocol (which they do to ensure their transactions are not rejected), not because of some corporate compensation scheme.


Complete non-sequitur.  You've given no explanation for how Bitcoin has a "downline"-based compensation scheme or organization.


That's not "building a customer base" in the sense of MLM, which would involve a group of people you have exclusive sales rights to -- which can't even happen with the way Bitcoin works.


There is no "the" company, certainly not one that sells at some "wholesale price".  There are, rather, numerous buyers and sellers (you don't have to go through an exchange!) that compete, yielding a market-driven price.


Another complete non-sequitur.  How are these miners and merchants anything like the "downline distributors" of MLM?


Unless the non-fixed price happens to fall or something.

Seriously, I have no idea what you're on about.  Maybe too many bitcoiners are fanatical, but beyond that, I don't see how you are justifying anything more than a superficial resemblance between Bitcoin and MLM (and in a way that would indict the stock/bond market, IPOs, etc as well).  And I just wasted, well, too much time responding to a non-argument.

If you want to be taken seriously -- and I do want to know any negative aspects of bitcoin -- please describe, specifically what the negative aspects of Bitcoin are and how they resemble MLM.  Don't just quote a criticism of MLM, mention a kind of Bitcoin user, and expect me to see the connection.

If I don't get a serious reply to this, you're going on "ignore".

Thanks for bringing that up!
I was trying to draw the following distinction:

Ledger > Bitcoin, Dollar (Fiat money)... http://en.wikipedia.org/wiki/Money

Commodity > Gold Coins... http://en.wikipedia.org/wiki/Commodity_money

As you can see, since bitcoin is a general (accounting) ledger, there's no reason to treat it as a commodity?

USD/money is a commodity, and something like 95% of it exists in digital form, as just records in an accounting ledger. So...

LOL!! Brillant! 

What makes an accounting ledger (read: bitcoin) a commodity?

Now, the bitcoin network as a whole has a market price, which will adjust based on the value and volume of things (e.g. fiat currencies, bananas, etc.) that are sold for bitcoins; but a unit of account itself (a.k.a. a bitcoin transaction) is just another credit/debit entry in that network. So, when you speculate on the value of BTC in terms of fiat currencies, you're trying to price the act of recording a transaction. Essentially, you're trying to figure out a wage that an accountant should be paid for tracking all bitcoin-denominated transactions.

But don't we already have accountants for the bitcoin network? And don't we pay them in bitcoin bounties and transaction fees?

Amen. I'm no opponent towards a wholly Darwinist outcome.

Bitcoin will become all that it's meant to ever be. Nothing can stop that.

If it's meant to be a small community of disenfranchised fools who saw stars in puddle of shit, so be it.

If it's the world's next greatest financial instrument, so be it.

I'm glad bitcoin is going through this now. I want it to be attacked from all sides, bashed by every resource, scrutinized and proclaimed a failure right out of the gate. If the underlying system can't survive this, then it wasn't meant to survive. Seeing how we haven't gone down to zero in relative valuation compared to < insert currency here >, and the participation in the network measured in TeraHashes per second hasn't declined in any significant way.

I'd say this bodes well for the future.

We've got until the end of August to disprove some of the more fantastic 'bubble' claims, then after that it is only a matter of time before other obstructions are surmounted and toppled.

Please, do your best to kill bitcoin - it only becomes stronger after every obstacle is defeated.

No, the reason the current setup is quantitatively corrupt is that many of the same criticisms of an MLM apply to what supposedly should become the perfect reserve currency for the entire World.

If in your clever little allegory "You" said, "Oh, and whoever starts writing code for this project first gets paid upwards of 1000% more per line than anyone who writes code afterward, but ONLY if you can convince more people to start writing code now, which shouldn't be too difficult since they might get paid upwards of 100% more per line than the next guy.  Oh, AND this program is set up to become the all knowing AI that solves a problem humanity has been having as long as history, you should really tell everyone about what a utopia it could be if we write it. It's the greatest thing since sliced bread!" then of course the picture becomes a bit clearer...

The easiest way to know right now that the current setup of Bitcoin is completely suspect is the fact that these kinds of questions even get brought up.  I mean, just try and imagine this office conversation:

Me: Hey guys, I think I've found a way to make our code a lot more efficient.

Office mate #1: Your changes smell like a Ponzi scheme to me.

Office mate #2: I don't know about that, but if you think about the details, it's just self-evident that it is not a multi-level marketing scheme.

A reasonable system would never have these kinds of questions brought up.

Like I said, my block chain DESIGN will likely never see the light of day.  I make webapps and sites. I will likely never be proficient enough in a statically typed, compiled language to program a fully functioning alternative blockchain to my specifications. So, no.  I'm trying to foment dissent to grab mindshare.

That being said, the whole "generation constant" is unnecessary and imparts no inherent advantages. It's mainly just an empty talking point and simply incidental to having to have SOME kind of functioning distribution scheme.  The fact is that dynamic generation is superior, because when it's pegged to acual USEFUL metrics of the blockchain, it allows for the NATURAL and harmonious expansion of network capacity. In contrast to the mindless "lets just make it a geometric scale with a constant distribution rate, cause that sounds like a good idea."

Not a bad opinion. But again, isn't is funny how obviously stupid the current block generation and distribution scheme is? And is yet vehemently defended by the retarded speculators who want to make bank off of it?

I agree that speculation is bad. I would much rather be able to go to my local store and by stuff with bitcoins. But all markets suffer from heavy speculation they always have.





Ahh now all your posts make sense. You were only laying the foundation for adoption of your special block chain.  I think the difficulty metric the way it is is rather elegant in that it keeps generation close to a constant. Assuming your special chain uses difficulty of x while economic activity is y and if y rises then so to does x economic activity would be much the same as it is now. If the opposite is true then value would decrease as economic activity increases.

So by all these posts that you have made berating bitcoin is just a sly way "in your eyes" of fomenting dissent and getting people to move to your chain. Which to me is funny since all the whining you have done thus far about early adopter advantage and what not.

I can actually agree with most of this, except for chaining block difficulty with economic activity alone.  It would make more sense to base it off a hybrid of block generation velocity, economic activity, and remaining blocks yet to be found.  IMHO anyway.

I never once said it WAS an MLM.  I said it shared characteristics of an MLM. The point of the thread was to spur meaningful discussion of why this is and what can be done about it, though my personal premise is that Bitcoin is bullshit and anything to be taken seriously really should be so easily compared to such bullshit marketing schemes.

I think that for all the faggoty adulation that Satoshi receives by his acolytes ("Satoshi is a genius." I've read more than once), Bitcoin is fundamentally flawed and it seems to me that someone so fucking clever should have come up with a way to base the block difficulty on some standard of economic activity and not the absolutely retarded metric of how many people are chomping at the bit for their own blocks.

I've already designed an alternative blockchain myself that addresses this, and many more examples of the massive stupidity inherent to the Bitcoin system, but I'm certainly not going to share it here, and it's unlikely it will ever be published by myself since I'm just a lowly web developer.

However, it's really rather telling that I was able to solve the *hypothertical* economic problems of Bitcoin, and Satoshi wasn't.  Of course, Satoshi never purported to be an economist.  He's a cryptographer, and he solved a very interesting cryptographic problem. However, his proof-of-concept should never have become what is has, until there was a functioning economic underpinning to the creation, distribution, and long term strategy of the currency to begin with.