I do not want to bring more discord here. You all know my views and arguments, if you don't agree with them I do not know what to add.
But let me clarify a couple of misunderstandings:
* Investment in stocks is not a zero-sum game. A long-term stock investment is a loan to the company, who hopefully uses that money to create new real wealth (goods or services) that is worth more than the money invested in it. Part of that extra wealth is returned to the long-term investor as dividends, part is returned through the increase in stock price related to increase in the assets of the company (e.g. new factories built with money from profits that was not distributed as dividends). Thus investing in stocks can make people richer without making anyone poorer.
* Money that is invested into bitcoins is not being given to the "company" -- that is, the bitcoin network -- for it to build the infrastructure and paying the costs of doing its service (which is the "new wealth" that the bitcoin project is meant to create). Most of it goes into the pockets of other traders, some into the pockets of exchange operators. The "company" does not pay dividends to bitcoin investors, and these do not own a single chip from that "company". So, investing into bitcoins is not at all like investing in Google or Apple stock.
* By simply moving a fixed amount of money and bitcoins around, bitcoin trading cannot make everybody rich, not even in the average sense. That is something that a college education may help understand: in basic physics you learn that you cannot create mass, charge, or energy by smartly moving those things around.
Topic: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion - page 29522. (Read 26608829 times)
February 19, 2014, 07:43:43 AM
February 19, 2014, 07:35:24 AM
@KeyserSoze,
I have promised to keep my negative views to myself in this forum, but you insist asking for them...
Is what I wrote on twitter and put on my homepage any different from what I already wrote here?
(You missed my last tweet, "One day bitcoins will be worth their weight in gold".)
Even if bitcoin ultmately succeeds (which I wish it will, but doubt it) and bitcoins becomes extremely valuable (which I very much doubt they will), bitcoin trading is ultimately a zero-sum game. Any profit that one makes from it is someone else's loss. In order for @Goat (or someone else) to buy his Lamborghini, @windjc (or someone else) must lose his house.
I believe that adults have the right to gamble their money and property any way they want. They even have the right to play at this crazy roulette-by-phone where the casinos may not have money to pay off, and the dealers are know to be liars, cheaters, and thieves.
So I have no objections to bitcoin trade and speculation --- as long as the people who come into the game are aware that it is a form of gambling, and that their expected profit is slightly negative (because of fees and other losses).
However, this particular game will be profitable for its current players only if the price goes up; and that is not likely to happen if the "market" consists of the same guys trading the same bitcoins and the same dollars back and forth among themselves. In order for the price to go up, and the old players to make substantial profits, new players must come in and bring new money.
So, in that aspect bitcoin trading is indeed a classical Ponzi schema: the money invested by new members is used to pay the large profits of the early joiners -- if these are smart enough cash out while the price is higher than what they paid for their coins. The net effect of the game is to shift money from the late entrant' pockets to those of the early entrants.
And that is when the game stops being OK. That is because in order to lure new players, some of the bitcoin "evangelists" are resorting to plain lies, painting bitcoin as a "good investment", an hedge against "rampaging inflation", etc. They keep showing that false arithmetic of total e-commerce divided by 21 million. Some still claim that bitcoin payments are untraceable and un-seizeable. (You may have seen my tweets a couple of weeks ago where I argue with someone who claimed just that.) And the bitcoin salesmen conveniently forget to mention the growing legal barriers, the dozens of exchange failures that ate millions from their clients, and the many other things that would turn sensible people, even uneducated ones, away from the bitcoin game.
One feature of Ponzi schemes is that most people who join feel the urge to become salesmen and convince others to join too. You do not see long-term stock investors doing that; that's because those people know that other smart investors will look at what the company does, and will not be impressed by sales hype.
It was the opening of the Chinese market that lifted the bitcoin price from the low tens to 1200, and it is the Chinese who are holding it at the present levels. But that market is no longer growing. So, where will the necessary new suckers come from?
I have seen people here and elsewhere saying that the only hope left now is Latin America. Well, I cannot sit and watch fellow countrymen being conned, can I?
Several times I felt the urge to end my posts here with a friendly "I wish you all get filthy rich". But I cannot honestly say that: if some of you do, others necessarily will become filthy poor. I thought of writing "may you all get back most of what you invested", which is the fairest outcome one could wish for in a zero-sum game. But I cannot honestly even wish you that, because many people have already walked out of this game with millions of profits or stolen money --- so you all are, like those guys in my parable above, spinning around only a fraction of the money that you all put in. Sorry, folks.
I have promised to keep my negative views to myself in this forum, but you insist asking for them...
Is what I wrote on twitter and put on my homepage any different from what I already wrote here?
(You missed my last tweet, "One day bitcoins will be worth their weight in gold".)
Even if bitcoin ultmately succeeds (which I wish it will, but doubt it) and bitcoins becomes extremely valuable (which I very much doubt they will), bitcoin trading is ultimately a zero-sum game. Any profit that one makes from it is someone else's loss. In order for @Goat (or someone else) to buy his Lamborghini, @windjc (or someone else) must lose his house.
I believe that adults have the right to gamble their money and property any way they want. They even have the right to play at this crazy roulette-by-phone where the casinos may not have money to pay off, and the dealers are know to be liars, cheaters, and thieves.
So I have no objections to bitcoin trade and speculation --- as long as the people who come into the game are aware that it is a form of gambling, and that their expected profit is slightly negative (because of fees and other losses).
However, this particular game will be profitable for its current players only if the price goes up; and that is not likely to happen if the "market" consists of the same guys trading the same bitcoins and the same dollars back and forth among themselves. In order for the price to go up, and the old players to make substantial profits, new players must come in and bring new money.
So, in that aspect bitcoin trading is indeed a classical Ponzi schema: the money invested by new members is used to pay the large profits of the early joiners -- if these are smart enough cash out while the price is higher than what they paid for their coins. The net effect of the game is to shift money from the late entrant' pockets to those of the early entrants.
And that is when the game stops being OK. That is because in order to lure new players, some of the bitcoin "evangelists" are resorting to plain lies, painting bitcoin as a "good investment", an hedge against "rampaging inflation", etc. They keep showing that false arithmetic of total e-commerce divided by 21 million. Some still claim that bitcoin payments are untraceable and un-seizeable. (You may have seen my tweets a couple of weeks ago where I argue with someone who claimed just that.) And the bitcoin salesmen conveniently forget to mention the growing legal barriers, the dozens of exchange failures that ate millions from their clients, and the many other things that would turn sensible people, even uneducated ones, away from the bitcoin game.
One feature of Ponzi schemes is that most people who join feel the urge to become salesmen and convince others to join too. You do not see long-term stock investors doing that; that's because those people know that other smart investors will look at what the company does, and will not be impressed by sales hype.
It was the opening of the Chinese market that lifted the bitcoin price from the low tens to 1200, and it is the Chinese who are holding it at the present levels. But that market is no longer growing. So, where will the necessary new suckers come from?
I have seen people here and elsewhere saying that the only hope left now is Latin America. Well, I cannot sit and watch fellow countrymen being conned, can I?
Several times I felt the urge to end my posts here with a friendly "I wish you all get filthy rich". But I cannot honestly say that: if some of you do, others necessarily will become filthy poor. I thought of writing "may you all get back most of what you invested", which is the fairest outcome one could wish for in a zero-sum game. But I cannot honestly even wish you that, because many people have already walked out of this game with millions of profits or stolen money --- so you all are, like those guys in my parable above, spinning around only a fraction of the money that you all put in. Sorry, folks.
So you didn't notice that bitcoin is money? Or do you not understand how money works?
February 19, 2014, 07:14:42 AM
It is not dishonest if people know it is a zero-sum game with uncertain odds, before they join.
No that is wrong, the test for dishonesty is not dependant on the recipients understanding, it is dependant on the perpetrators intent. (or an objective test - by the 'man in the street')
The Ponzi case has a very specific legal meaning, blurring this meaning, invalidates the comparison.
Sorry, but the way in which you relate through syntax the semantic meaning 'Bitcoin is honest', is not to say 'bitcoin is not dishonest' because then you haven't said ANYTHING, you just told us what it ISN'T.
February 19, 2014, 07:13:55 AM
@KeyserSoze,
I have promised to keep my negative views to myself in this forum, but you insist asking for them...
.... spinning around only a fraction of the money that you all put in. Sorry, folks.
I have promised to keep my negative views to myself in this forum, but you insist asking for them...
.... spinning around only a fraction of the money that you all put in. Sorry, folks.
oh no. not the ponzi thing again.
...
600watt Agreed.
Sorry JorgeStolfi but this one way off. Bitcoin or what ever crypto takes off is not ponzi (ok excluding the pre-mined obvious scams which disappear in a flash). Crypto currency is just another amazing technology that will change many things. Like any other tech, people will find ways to use if for good or bad. But one thing is for sure, its changing the balance of power in the world. The biggest haters are the bankers, hmm I wonder why? Its like Yoda said "Fear leads to hate..." they are scared the population is no longer dependent on their crappy system any more
Crypto offers the opportunity at least to have a chance at changing things for the better - to people who would never get it because they were not born into wealth. Now we've got a bunch of youth who previously would never see the kind of wealth they have access to now, let's hope they can change a few things for the better.
Open source and decentralisation is the way forward. Any system built on those principals has got my vote whether it makes me personally rich or someone else, reason being that the idea of openness and freedom is closer to love (surely the basis of any system that promotes true well-being) then the hate filled closed source bureaucratic bull shit system we have now.
February 19, 2014, 07:07:38 AM
It is not dishonest if people know it is a zero-sum game with uncertain odds, before they join.
No that is wrong, the test for dishonesty is not dependant on the recipients understanding, it is dependant on the perpetrators intent. (or an objective test - by the 'man in the street')
The Ponzi case has a very specific legal meaning, blurring this meaning, invalidates the comparison.
February 19, 2014, 07:07:03 AM
Holy shit, seems i missed something big during these weeks i've been away... What the fuck happened this time? Why aren't we still close to or above 1k?
February 19, 2014, 07:03:17 AM
February 19, 2014, 06:57:57 AM
...
Even if bitcoin ultmately succeeds (which I wish it will, but doubt it) and bitcoins becomes extremely valuable (which I very much doubt they will), bitcoin trading is ultimately a zero-sum game. Any profit that one makes from it is someone else's loss. In order for @Goat (or someone else) to buy his Lamborghini, @windjc (or someone else) must lose his house.
...
Even if bitcoin ultmately succeeds (which I wish it will, but doubt it) and bitcoins becomes extremely valuable (which I very much doubt they will), bitcoin trading is ultimately a zero-sum game. Any profit that one makes from it is someone else's loss. In order for @Goat (or someone else) to buy his Lamborghini, @windjc (or someone else) must lose his house.
...
I'll only pick out this one part, because it is so obviously naive (and wrong) that I can't help commenting on it.
The day-to-day *trading* of a commodity is a zero sum game, granted. But the complete market mechanism isn't, unless you subscribe to some rather doubtful (probably Marx inspired) economical theories, where value creation in a market is essentially impossible without removing value from someone else.
Let me do this more practical:
Who "lost his house" against the early Microsoft, Google, or IBM investors?
Your conceptual problem is as follow, I think:
A Ponzi for your is a setup where early investors *can*, in principle, earn at the expense of later investors. That is however the setup for *any* trading situation.
So the real point of a Ponzi is different: it is the above *plus* deceptive advertising *plus* an individual or a small group of individuals that set it up to profit in such a way. Neither applies to Bitcoin: Conspiracy theories aside, Satoshi is no sitting on some island slurping expensive cocktails. And, frankly, if you read the news, there's plenty warning about BTC out there, so the "misleading advertising" is also not a major part of the reason why people start investing in BTC.
February 19, 2014, 06:57:21 AM
A Ponzi scheme requires dishonesty (in the legal sense). Bitcoin is clearly not dishonest.
It is not dishonest if people know it is a zero-sum game with uncertain odds, before they join.
It becomes dishonest when people are made to believe that it is a good investment -- i.e. that their expected gains are positive.
Every smart people who makes substantial profit with bitcoins must know where his profits came from. Especially those who reserved a couple million bitcoins for themselves at the beginning, and thus (like the "me" in my parable) have invested nothing and will walk out with a fortune.
A Ponzi scheme is centralised. Bitcoin has no centralised controlling person.
OK, technically it is not a Ponzi but only a pyramid scheme. But for the late entrants it is the same thing...
An bitcoin does have some big players who act and profit like the owners of a true Ponzi. Like that scoundrel in my parable, one can become a "Ponzi-boss" even without the explicit authorization or knowledge of the original bosses.
February 19, 2014, 06:54:48 AM
@KeyserSoze,
I have promised to keep my negative views to myself in this forum, but you insist asking for them...
Is what I wrote on twitter and put on my homepage any different from what I already wrote here?
(You missed my last tweet, "One day bitcoins will be worth their weight in gold".)
Even if bitcoin ultmately succeeds (which I wish it will, but doubt it) and bitcoins becomes extremely valuable (which I very much doubt they will), bitcoin trading is ultimately a zero-sum game. Any profit that one makes from it is someone else's loss. In order for @Goat (or someone else) to buy his Lamborghini, @windjc (or someone else) must lose his house.
I believe that adults have the right to gamble their money and property any way they want. They even have the right to play at this crazy roulette-by-phone where the casinos may not have money to pay off, and the dealers are know to be liars, cheaters, and thieves.
So I have no objections to bitcoin trade and speculation --- as long as the people who come into the game are aware that it is a form of gambling, and that their expected profit is slightly negative (because of fees and other losses).
However, this particular game will be profitable for its current players only if the price goes up; and that is not likely to happen if the "market" consists of the same guys trading the same bitcoins and the same dollars back and forth among themselves. In order for the price to go up, and the old players to make substantial profits, new players must come in and bring new money.
So, in that aspect bitcoin trading is indeed a classical Ponzi schema: the money invested by new members is used to pay the large profits of the early joiners -- if these are smart enough cash out while the price is higher than what they paid for their coins. The net effect of the game is to shift money from the late entrant' pockets to those of the early entrants.
And that is when the game stops being OK. That is because in order to lure new players, some of the bitcoin "evangelists" are resorting to plain lies, painting bitcoin as a "good investment", an hedge against "rampaging inflation", etc. They keep showing that false arithmetic of total e-commerce divided by 21 million. Some still claim that bitcoin payments are untraceable and un-seizeable. (You may have seen my tweets a couple of weeks ago where I argue with someone who claimed just that.) And the bitcoin salesmen conveniently forget to mention the growing legal barriers, the dozens of exchange failures that ate millions from their clients, and the many other things that would turn sensible people, even uneducated ones, away from the bitcoin game.
One feature of Ponzi schemes is that most people who join feel the urge to become salesmen and convince others to join too. You do not see long-term stock investors doing that; that's because those people know that other smart investors will look at what the company does, and will not be impressed by sales hype.
It was the opening of the Chinese market that lifted the bitcoin price from the low tens to 1200, and it is the Chinese who are holding it at the present levels. But that market is no longer growing. So, where will the necessary new suckers come from?
I have seen people here and elsewhere saying that the only hope left now is Latin America. Well, I cannot sit and watch fellow countrymen being conned, can I?
Several times I felt the urge to end my posts here with a friendly "I wish you all get filthy rich". But I cannot honestly say that: if some of you do, others necessarily will become filthy poor. I thought of writing "may you all get back most of what you invested", which is the fairest outcome one could wish for in a zero-sum game. But I cannot honestly even wish you that, because many people have already walked out of this game with millions of profits or stolen money --- so you all are, like those guys in my parable above, spinning around only a fraction of the money that you all put in. Sorry, folks.
I have promised to keep my negative views to myself in this forum, but you insist asking for them...
Is what I wrote on twitter and put on my homepage any different from what I already wrote here?
(You missed my last tweet, "One day bitcoins will be worth their weight in gold".)
Even if bitcoin ultmately succeeds (which I wish it will, but doubt it) and bitcoins becomes extremely valuable (which I very much doubt they will), bitcoin trading is ultimately a zero-sum game. Any profit that one makes from it is someone else's loss. In order for @Goat (or someone else) to buy his Lamborghini, @windjc (or someone else) must lose his house.
I believe that adults have the right to gamble their money and property any way they want. They even have the right to play at this crazy roulette-by-phone where the casinos may not have money to pay off, and the dealers are know to be liars, cheaters, and thieves.
So I have no objections to bitcoin trade and speculation --- as long as the people who come into the game are aware that it is a form of gambling, and that their expected profit is slightly negative (because of fees and other losses).
However, this particular game will be profitable for its current players only if the price goes up; and that is not likely to happen if the "market" consists of the same guys trading the same bitcoins and the same dollars back and forth among themselves. In order for the price to go up, and the old players to make substantial profits, new players must come in and bring new money.
So, in that aspect bitcoin trading is indeed a classical Ponzi schema: the money invested by new members is used to pay the large profits of the early joiners -- if these are smart enough cash out while the price is higher than what they paid for their coins. The net effect of the game is to shift money from the late entrant' pockets to those of the early entrants.
And that is when the game stops being OK. That is because in order to lure new players, some of the bitcoin "evangelists" are resorting to plain lies, painting bitcoin as a "good investment", an hedge against "rampaging inflation", etc. They keep showing that false arithmetic of total e-commerce divided by 21 million. Some still claim that bitcoin payments are untraceable and un-seizeable. (You may have seen my tweets a couple of weeks ago where I argue with someone who claimed just that.) And the bitcoin salesmen conveniently forget to mention the growing legal barriers, the dozens of exchange failures that ate millions from their clients, and the many other things that would turn sensible people, even uneducated ones, away from the bitcoin game.
One feature of Ponzi schemes is that most people who join feel the urge to become salesmen and convince others to join too. You do not see long-term stock investors doing that; that's because those people know that other smart investors will look at what the company does, and will not be impressed by sales hype.
It was the opening of the Chinese market that lifted the bitcoin price from the low tens to 1200, and it is the Chinese who are holding it at the present levels. But that market is no longer growing. So, where will the necessary new suckers come from?
I have seen people here and elsewhere saying that the only hope left now is Latin America. Well, I cannot sit and watch fellow countrymen being conned, can I?
Several times I felt the urge to end my posts here with a friendly "I wish you all get filthy rich". But I cannot honestly say that: if some of you do, others necessarily will become filthy poor. I thought of writing "may you all get back most of what you invested", which is the fairest outcome one could wish for in a zero-sum game. But I cannot honestly even wish you that, because many people have already walked out of this game with millions of profits or stolen money --- so you all are, like those guys in my parable above, spinning around only a fraction of the money that you all put in. Sorry, folks.
What you are talking about is simply not true. Of course, bitcoin is a zero sum game - BUT so is every other kind of higher value asset: Gold, Diamonds and even luxury cars.
Everything that can be mined or sold at a higher price later on is essentially zero sum.
And it is also true that bitcoin can be a hedge IF inflation would rise, since it's essentially the role of gold in that aspect as well. People tend to hedge against inflationary assets with deflationary ones.
Also your statement that the chinese pushed the price towards 1200 is not essentially true in itself; While they played a mayor role in pushing the price, there were several other factors which did the same: Mass asic preorders changed the mining environment drastically and and people saw their last chance to get coins cheap without buying overpriced hardware, a rather stable exchange rate over half a year (between 110 and 80$ iirc) and another wave of mass media coverage.
Since bitcoin is regulated only through supply and demand, so you can't really say that new players pay the profit for early adopters or even compare it with a ponzi. With you comparing it to theft you basically loose all credibility, I would think that someone with your academic grade wouldn't resort to such low based arguments. It's like saying "bitcoin is only for djihadists, child molesters and drug addicts".
Regarding the growing regulatory barriers I can only assume you mean the necessary and long overdue regulatory framework put in place by different governments in order to elevate cryptocurrencies out of the grey zone into the legal zone. I don't know why that would make bitcoin a bad investment at all.
February 19, 2014, 06:47:16 AM
Even if bitcoin ultmately succeeds (which I wish it will, but doubt it) and bitcoins becomes extremely valuable (which I very much doubt they will), bitcoin trading is ultimately a zero-sum game. Any profit that one makes from it is someone else's loss. In order for @Goat (or someone else) to buy his Lamborghini, @windjc (or someone else) must lose his house.
the price has to drop for someone to lose - if the price stabilises and doesn't drop when we reach mass adoption, nobody loses.
February 19, 2014, 06:45:42 AM
From google maps this building appears to have an underground car park, with security. Perhaps now MK can drive into work and avoid any demonstrations at the door.
February 19, 2014, 06:42:41 AM
@KeyserSoze,
I have promised to keep my negative views to myself in this forum, but you insist asking for them...
Is what I wrote on twitter and put on my homepage any different from what I already wrote here?
(You missed my last tweet, "One day bitcoins will be worth their weight in gold".)
Even if bitcoin ultmately succeeds (which I wish it will, but doubt it) and bitcoins becomes extremely valuable (which I very much doubt they will), bitcoin trading is ultimately a zero-sum game. Any profit that one makes from it is someone else's loss. In order for @Goat (or someone else) to buy his Lamborghini, @windjc (or someone else) must lose his house.
I believe that adults have the right to gamble their money and property any way they want. They even have the right to play at this crazy roulette-by-phone where the casinos may not have money to pay off, and the dealers are know to be liars, cheaters, and thieves.
So I have no objections to bitcoin trade and speculation --- as long as the people who come into the game are aware that it is a form of gambling, and that their expected profit is slightly negative (because of fees and other losses).
However, this particular game will be profitable for its current players only if the price goes up; and that is not likely to happen if the "market" consists of the same guys trading the same bitcoins and the same dollars back and forth among themselves. In order for the price to go up, and the old players to make substantial profits, new players must come in and bring new money.
So, in that aspect bitcoin trading is indeed a classical Ponzi schema: the money invested by new members is used to pay the large profits of the early joiners -- if these are smart enough cash out while the price is higher than what they paid for their coins. The net effect of the game is to shift money from the late entrant' pockets to those of the early entrants.
And that is when the game stops being OK. That is because in order to lure new players, some of the bitcoin "evangelists" are resorting to plain lies, painting bitcoin as a "good investment", an hedge against "rampaging inflation", etc. They keep showing that false arithmetic of total e-commerce divided by 21 million. Some still claim that bitcoin payments are untraceable and un-seizeable. (You may have seen my tweets a couple of weeks ago where I argue with someone who claimed just that.) And the bitcoin salesmen conveniently forget to mention the growing legal barriers, the dozens of exchange failures that ate millions from their clients, and the many other things that would turn sensible people, even uneducated ones, away from the bitcoin game.
One feature of Ponzi schemes is that most people who join feel the urge to become salesmen and convince others to join too. You do not see long-term stock investors doing that; that's because those people know that other smart investors will look at what the company does, and will not be impressed by sales hype.
It was the opening of the Chinese market that lifted the bitcoin price from the low tens to 1200, and it is the Chinese who are holding it at the present levels. But that market is no longer growing. So, where will the necessary new suckers come from?
I have seen people here and elsewhere saying that the only hope left now is Latin America. Well, I cannot sit and watch fellow countrymen being conned, can I?
Several times I felt the urge to end my posts here with a friendly "I wish you all get filthy rich". But I cannot honestly say that: if some of you do, others necessarily will become filthy poor. I thought of writing "may you all get back most of what you invested", which is the fairest outcome one could wish for in a zero-sum game. But I cannot honestly even wish you that, because many people have already walked out of this game with millions of profits or stolen money --- so you all are, like those guys in my parable above, spinning around only a fraction of the money that you all put in. Sorry, folks.
I have promised to keep my negative views to myself in this forum, but you insist asking for them...
Is what I wrote on twitter and put on my homepage any different from what I already wrote here?
(You missed my last tweet, "One day bitcoins will be worth their weight in gold".)
Even if bitcoin ultmately succeeds (which I wish it will, but doubt it) and bitcoins becomes extremely valuable (which I very much doubt they will), bitcoin trading is ultimately a zero-sum game. Any profit that one makes from it is someone else's loss. In order for @Goat (or someone else) to buy his Lamborghini, @windjc (or someone else) must lose his house.
I believe that adults have the right to gamble their money and property any way they want. They even have the right to play at this crazy roulette-by-phone where the casinos may not have money to pay off, and the dealers are know to be liars, cheaters, and thieves.
So I have no objections to bitcoin trade and speculation --- as long as the people who come into the game are aware that it is a form of gambling, and that their expected profit is slightly negative (because of fees and other losses).
However, this particular game will be profitable for its current players only if the price goes up; and that is not likely to happen if the "market" consists of the same guys trading the same bitcoins and the same dollars back and forth among themselves. In order for the price to go up, and the old players to make substantial profits, new players must come in and bring new money.
So, in that aspect bitcoin trading is indeed a classical Ponzi schema: the money invested by new members is used to pay the large profits of the early joiners -- if these are smart enough cash out while the price is higher than what they paid for their coins. The net effect of the game is to shift money from the late entrant' pockets to those of the early entrants.
And that is when the game stops being OK. That is because in order to lure new players, some of the bitcoin "evangelists" are resorting to plain lies, painting bitcoin as a "good investment", an hedge against "rampaging inflation", etc. They keep showing that false arithmetic of total e-commerce divided by 21 million. Some still claim that bitcoin payments are untraceable and un-seizeable. (You may have seen my tweets a couple of weeks ago where I argue with someone who claimed just that.) And the bitcoin salesmen conveniently forget to mention the growing legal barriers, the dozens of exchange failures that ate millions from their clients, and the many other things that would turn sensible people, even uneducated ones, away from the bitcoin game.
One feature of Ponzi schemes is that most people who join feel the urge to become salesmen and convince others to join too. You do not see long-term stock investors doing that; that's because those people know that other smart investors will look at what the company does, and will not be impressed by sales hype.
It was the opening of the Chinese market that lifted the bitcoin price from the low tens to 1200, and it is the Chinese who are holding it at the present levels. But that market is no longer growing. So, where will the necessary new suckers come from?
I have seen people here and elsewhere saying that the only hope left now is Latin America. Well, I cannot sit and watch fellow countrymen being conned, can I?
Several times I felt the urge to end my posts here with a friendly "I wish you all get filthy rich". But I cannot honestly say that: if some of you do, others necessarily will become filthy poor. I thought of writing "may you all get back most of what you invested", which is the fairest outcome one could wish for in a zero-sum game. But I cannot honestly even wish you that, because many people have already walked out of this game with millions of profits or stolen money --- so you all are, like those guys in my parable above, spinning around only a fraction of the money that you all put in. Sorry, folks.
oh no. not the ponzi thing again.
a ponzi scheme is a planned fraudulent enterprise/plan where no real investments are made, but instead new investors money is used to pay out older investors in order to make it look like the investment is sound. once supply of new money dries up, the ponzi scheme collapses.
please name me one ponzi scheme that has survived its collapse. they don´t. bitcoin has had several collapses in the past. why is still there ?
when no one invests in bitcoin (new money) bitcoin price does not collapse but goes sideways. if you check historical bitcoin charts you can see that it has done that several occasions and also longer period of times. which ponzi scheme has evr performed in that way ?
if your definition was right then every stock is a ponzi.
in bitcoin no new money is used secretly to pay out old investors. if i buy 1 bitcoin and the price rises, who has lost money ?
imho you are butthurt since you are an excpert in IT but missed the early train. even idiots like me were able to see it coming but you did not. i have experienced several IT guys who hated bitcoin and it made me wonder. i think it is because they can feel better hating this crap then to admit they could have given it credit much earlier.
bitcoin is a ponzi. wow. i guess email and mobile phones are also ponzi schemes ? how can a technology be a ponzi ?
welcome to ignore list.
February 19, 2014, 06:42:25 AM
PS. For those who insist in knowing my negative views, here is the link to that "parable": http://www.ic.unicamp.br/~stolfi/bitcoin/2014-02-17-HowToMakeSomeEasyMoney.html
February 19, 2014, 06:37:26 AM
Didn't know that Jorge is an acclaimed professor with a honorable wikipedia page! 
It is amazing how, in this thread, we can see the most childish trolls (Fonzie) together with some brilliant people (Me).
Amazing, just amazing.
It is amazing how, in this thread, we can see the most childish trolls (Fonzie) together with some brilliant people (Me).
Amazing, just amazing.
February 19, 2014, 06:32:29 AM
http://news.stanford.edu/news/2014/february/bitcoin-athey-srinivasan-021814.html
in case you just need some solid academic approval of bitcoin.
g r e a t interview. don´t miss it.
in case you just need some solid academic approval of bitcoin.
g r e a t interview. don´t miss it.
Quote
If the Internet was programmable communication, Bitcoin is programmable money. The analogy is actually a very good one. Before the Internet, in order to deploy a program that used the central communications network, you needed a deal with a network operator like AT&T. With the Internet, individual nodes could write programs to directly communicate with each other, without any central approval required.
In the same way, today, in order to deploy a program that uses the central financial network, you need a deal with a large bank or credit card company. With Bitcoin, individual nodes can write programs to directly send and receive money from each other, without any central approval required.
In the same way, today, in order to deploy a program that uses the central financial network, you need a deal with a large bank or credit card company. With Bitcoin, individual nodes can write programs to directly send and receive money from each other, without any central approval required.
Reposted. Everybody needs to read this.
February 19, 2014, 06:25:37 AM
Zero-sum is fine and fair. The fiat game is rigged, And your garanteed to loose value (and is actually close to a ponzi scheme with the perpetual debt).
February 19, 2014, 06:25:06 AM
So, in that aspect bitcoin trading is indeed a classical Ponzi schema: the money invested by new members is used to pay the large profits of the early joiners -- if these are smart enough cash out while the price is higher than what they paid for their coins. The net effect of the game is to shift money from the late entrant' pockets to those of the early entrants.
A Ponzi scheme requires dishonesty (in the legal sense). Bitcoin is clearly not dishonest.
A Ponzi scheme is centralised. Bitcoin has no centralised controlling person.
It's the same as me calling someone who driving a car in a fatal road accident, a murderer. Even though the key element of the murder is not present (the intent) the rest of the offence is made out.
Using the word Ponzi is misleading, manipulative and simply wrong.
February 19, 2014, 06:18:48 AM
@KeyserSoze,
I have promised to keep my negative views to myself in this forum, but you insist asking for them...
Is what I wrote on twitter and put on my homepage any different from what I already wrote here?
(You missed my last tweet, "One day bitcoins will be worth their weight in gold".)
Even if bitcoin ultmately succeeds (which I wish it will, but doubt it) and bitcoins becomes extremely valuable (which I very much doubt they will), bitcoin trading is ultimately a zero-sum game. Any profit that one makes from it is someone else's loss. In order for @Goat (or someone else) to buy his Lamborghini, @windjc (or someone else) must lose his house.
I believe that adults have the right to gamble their money and property any way they want. They even have the right to play at this crazy roulette-by-phone where the casinos may not have money to pay off, and the dealers are know to be liars, cheaters, and thieves.
So I have no objections to bitcoin trade and speculation --- as long as the people who come into the game are aware that it is a form of gambling, and that their expected profit is slightly negative (because of fees and other losses).
However, this particular game will be profitable for its current players only if the price goes up; and that is not likely to happen if the "market" consists of the same guys trading the same bitcoins and the same dollars back and forth among themselves. In order for the price to go up, and the old players to make substantial profits, new players must come in and bring new money.
So, in that aspect bitcoin trading is indeed a classical Ponzi schema: the money invested by new members is used to pay the large profits of the early joiners -- if these are smart enough cash out while the price is higher than what they paid for their coins. The net effect of the game is to shift money from the late entrant' pockets to those of the early entrants.
And that is when the game stops being OK. That is because in order to lure new players, some of the bitcoin "evangelists" are resorting to plain lies, painting bitcoin as a "good investment", an hedge against "rampaging inflation", etc. They keep showing that false arithmetic of total e-commerce divided by 21 million. Some still claim that bitcoin payments are untraceable and un-seizeable. (You may have seen my tweets a couple of weeks ago where I argue with someone who claimed just that.) And the bitcoin salesmen conveniently forget to mention the growing legal barriers, the dozens of exchange failures that ate millions from their clients, and the many other things that would turn sensible people, even uneducated ones, away from the bitcoin game.
One feature of Ponzi schemes is that most people who join feel the urge to become salesmen and convince others to join too. You do not see long-term stock investors doing that; that's because those people know that other smart investors will look at what the company does, and will not be impressed by sales hype.
It was the opening of the Chinese market that lifted the bitcoin price from the low tens to 1200, and it is the Chinese who are holding it at the present levels. But that market is no longer growing. So, where will the necessary new suckers come from?
I have seen people here and elsewhere saying that the only hope left now is Latin America. Well, I cannot sit and watch fellow countrymen being conned, can I?
Several times I felt the urge to end my posts here with a friendly "I wish you all get filthy rich". But I cannot honestly say that: if some of you do, others necessarily will become filthy poor. I thought of writing "may you all get back most of what you invested", which is the fairest outcome one could wish for in a zero-sum game. But I cannot honestly even wish you that, because many people have already walked out of this game with millions of profits or stolen money --- so you all are, like those guys in my parable above, spinning around only a fraction of the money that you all put in. Sorry, folks.
I have promised to keep my negative views to myself in this forum, but you insist asking for them...
Is what I wrote on twitter and put on my homepage any different from what I already wrote here?
(You missed my last tweet, "One day bitcoins will be worth their weight in gold".)
Even if bitcoin ultmately succeeds (which I wish it will, but doubt it) and bitcoins becomes extremely valuable (which I very much doubt they will), bitcoin trading is ultimately a zero-sum game. Any profit that one makes from it is someone else's loss. In order for @Goat (or someone else) to buy his Lamborghini, @windjc (or someone else) must lose his house.
I believe that adults have the right to gamble their money and property any way they want. They even have the right to play at this crazy roulette-by-phone where the casinos may not have money to pay off, and the dealers are know to be liars, cheaters, and thieves.
So I have no objections to bitcoin trade and speculation --- as long as the people who come into the game are aware that it is a form of gambling, and that their expected profit is slightly negative (because of fees and other losses).
However, this particular game will be profitable for its current players only if the price goes up; and that is not likely to happen if the "market" consists of the same guys trading the same bitcoins and the same dollars back and forth among themselves. In order for the price to go up, and the old players to make substantial profits, new players must come in and bring new money.
So, in that aspect bitcoin trading is indeed a classical Ponzi schema: the money invested by new members is used to pay the large profits of the early joiners -- if these are smart enough cash out while the price is higher than what they paid for their coins. The net effect of the game is to shift money from the late entrant' pockets to those of the early entrants.
And that is when the game stops being OK. That is because in order to lure new players, some of the bitcoin "evangelists" are resorting to plain lies, painting bitcoin as a "good investment", an hedge against "rampaging inflation", etc. They keep showing that false arithmetic of total e-commerce divided by 21 million. Some still claim that bitcoin payments are untraceable and un-seizeable. (You may have seen my tweets a couple of weeks ago where I argue with someone who claimed just that.) And the bitcoin salesmen conveniently forget to mention the growing legal barriers, the dozens of exchange failures that ate millions from their clients, and the many other things that would turn sensible people, even uneducated ones, away from the bitcoin game.
One feature of Ponzi schemes is that most people who join feel the urge to become salesmen and convince others to join too. You do not see long-term stock investors doing that; that's because those people know that other smart investors will look at what the company does, and will not be impressed by sales hype.
It was the opening of the Chinese market that lifted the bitcoin price from the low tens to 1200, and it is the Chinese who are holding it at the present levels. But that market is no longer growing. So, where will the necessary new suckers come from?
I have seen people here and elsewhere saying that the only hope left now is Latin America. Well, I cannot sit and watch fellow countrymen being conned, can I?
Several times I felt the urge to end my posts here with a friendly "I wish you all get filthy rich". But I cannot honestly say that: if some of you do, others necessarily will become filthy poor. I thought of writing "may you all get back most of what you invested", which is the fairest outcome one could wish for in a zero-sum game. But I cannot honestly even wish you that, because many people have already walked out of this game with millions of profits or stolen money --- so you all are, like those guys in my parable above, spinning around only a fraction of the money that you all put in. Sorry, folks.
February 19, 2014, 06:03:15 AM
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