Bitcoin Forum

Bitcoin's breakthrough is to have a decentralized network of "miners" sit in between us instead. Now, remember, these miners are trying to win new Bitcoins by solving computationally-taxing math problems. The clever part, though, is that in the process of doing so, they also create a public ledger of every single Bitcoin transaction, what's called the blockchain. That includes every Bitcoin that's ever been won, every Bitcoin that's ever been used, and every Bitcoin that's ever been transferred. So now we don't need a bank to know that I have the money I'm sending to you, and that I'm only sending it to you. The miners confirm all this. And the best part is that instead of having to pay the bank myself to do this, the system pays the miners in new Bitcoins.

source:
http://www.washingtonpost.com/blogs/wonkblog/wp/2015/06/08/bitcoin-isnt-the-future-of-money-its-either-a-ponzi-scheme-or-a-pyramid-scheme/?tid=sm_fb



This article make me scared about bitcoin, now i withdraw some BTC and keep on my Bank, i believe bitcoin will be BIGGEST Technology, but in price we can see it, price is very down than last year (stabil 300$)

What do you think about this article ?

Woah, holy crap lol.  What happened to the day when journalists actually had to know something about what they were writing about?  That article is sheer nonsense.  It seems like a smear piece because it is hard to believe that anyone could actually be that obtuse.  No one wants to spend bitcoins?  I would love to use them more often if I could find retailers to accept them.  And they are only good for drugs?  Absurd.  I couldn't read the whole thing because I was laughing too much.  I am shocked to see that the publication date was not 4-1-15.

Also the writer is reffering to the massive pollution caused by bitcoin mining. What about the massive servers the banks and VISA/Mastercard need to host currently? They probably use a shitload more energy than the current mining operations. If bitcoin can replace parts of this, wouldn't we be better off?

wasn't the bitcoin network considered the most powerful network in the world, most powerful than any numbers of supercomputer combined? i doubt they are wasting more energy than the mining operations for bitcoin

It's been a long time, since people brought up this old misconception. It acctually shows their lack of investigative skills or their knowledge on the subject matter they are writing about.

Do they even know what a Ponzi scheme is?

Do they think companies like Dell / Microsoft / Overstock to name but a few, would have accepted Bitcoin, if it was a Ponzi Scheme?

The idiots writing this, have absolutely no clue, what they are talking about. It's purely a smear piece poorly researched and terribly executed.  ;D ;D ;D

I tend to be a technological optimist. As far as the energy cost, I have no doubt that there will eventually be a technology available allowing for competitive mining with less power consumption. (I'm also not an expert in such things and so could be full of crap)

But the solution doesn't exist yet, and this will be something that will need to be addressed. If this guy brings it up, others might also. To encourage adoption, we need to consider even the potential faults in the system.

That said, the article - especially its title - does seem a tad unnecessarily aggressive towards Bitcoin.

It's not a ponzi scheme but it's not a guaranteed investment either and could collapse at some point especially if it becomes unprofitable to mine, so I think that's where people's fears of it being a ponzi come from. Bitcoin is still an experiment really so who knows whats going to happen but I hope it doesn't collapse because there's going to be a lot of smug naysayers about.

*Takes five seconds glancing through the article*

Yep, bullshit, don't pay any attention to anyone that tries to criticise currencies without even having a basic knowledge of how they work.

I've done the same. Well I was just waiting for these articles to start popping up again; however, I'm hoping that they are going to be less in number than before.
Remember the times when we have an article like this spreading FUD almost every single day, and sometimes multiple times a day.

To simplify the situation used to be:
If you bought Bitcoin on time, you would state the following:          Bitcoin is the future
If you hadn't bought Bitcoin on time, you would state the following: Bitcoin is a scam/ponzi and whatnot.


I guess this reporter from Washingtonpost thinks that he is smarter more than 100 000(+) merchants that DO accept Bitcoin. This includes Microsoft, Dell, Overstock, Newegg and several other big companies.  ::)

OP says its a ponzi scheme . I dont understand how its a scheme and that too a Ponzi one . The article is a complete nonsense and has no relevance with the degradation of btc reputation . What I believe is that btc is absolutely amazing creativity in economic transactions . It has made everything now very easy and many people have earned a lot from this . It has changed many people's lives forever which is the reality .

thats why i dont like the journalist,they are didnt even know what is bitcoin and using it, you never feel it if you never try it

Well, that's a question only time will answer. Bitcoin still have a long way to go and we will eventually find out how far bitcoin can wonder. Till then I am still betting on BTC to be the revolution of online currency.

they probably have starting to enforce this whole "bitcoin is a ponzi scheme", since the 20mb news and Gevin, leading it like it was a ceo or something

they are always trying, to scuttle bitcoin by any means

And here comes the WaPo FUD again. The author of that written mess has absolutely no clue about Bitcoin. Let those idiots continue with their stupid attitude.One day they will be shut up.

i think you not all true
before Journalist write news he need more analysis, and use it but i don't like too


i think this people answer you



FUDER want to buy bitcoin cheap and he release more bad news about bitcoin
also bank not want to lose her customer,

Bitcoin is have BIg technology, but we not rule some money online is dead
like liberty or other i can't say one by one

It is the most powerful, when it comes to Bitcoin mining. It can mine Bitcoin better, than a supercomputer could, because the hardware is optimized on mining.
Power consumption is a whole other story. I don't know, what the power consumption of the network is, but  an ASIC takes less energy to produce Bitcoin, than a supercomputer would.

Bitcoin will be PURE ponzi if no body interesting and dead, are you read source ?
that not my opinion i only want to share about bitcoin in other view


I TRUST AND I CRAVE BITCOIN

An interesting quote from the article about the HODLers:

Many of you base your argument on merchant adoption. If merchant adoption is high, then everything is alright. I think that's not the case. Merchants look for customers and all they can sell. Adding a Bitcoin payment option for a merchant is risk-free, even Bitcoin is a Ponzi, Pyramid, etc.

Except not everyone is a 'hodler' and looking at the blockchain people are quite clearly spending them on things. Bitcoin needs both holdlers and spenders and that's what it's got. Besides, those hodlers will spend or cash out once bitcoin gets to their desired price.

The currency as we all know, works absolutely fine and functions the way it's supposed to, it's all the infrastructure and services that have grown around it that needs some work, once we weed out all these scammers then we'll see more real businesses getting set up.

Bitcoin is as much of a ponzi scheme as the stock market  ;D

i agree with you man, for me havent sense if they are wasting more energy than the mining operations for bitcoin.

just because of that i really think it’s not either a Ponzi scheme

This is far more complicated than that ! Some people HODL and spend as well. Some people use it to send money overseas, some people use it for trading, some people invest with it, some people gamble with, some people use it to get paid for freelance job, some people use it for borrowing money etc.

Bitcoin itself is nothing like a Ponzi. they can call it a bubble if they really it is , but it's NOT a Ponzi.

So, with that in mind, let's take a look at Bitcoin and see if it meets any of the criteria of a Ponzi scheme, even a little bit. Note that one key feature, one that many of its proponents are touting as a primary benefit is its transparency. In other words, everybody around the world can follow what's going on with Bitcoin. Yes, it is true, you may not know the inner workings of the Bitcoin exchanges, but you can know what is going on with Bitcoin at any moment of the day.

Ctrl-s "counterfeit"  - -  no results.


OK, yet another article about hammers that doesn't mention nails. 

This reads like either written from a paid shill or like he lost some money on the bubble and is now on a war on Bitcoin.  :P

So is HODL a thing now?

This is easily the worst article I have ever read on bitcoins.  Less factual that the latest bigfoot or alien report in the tabloids at the market.  I almost want to say that this should be illegal to publish such lies.  Heck if corporations get constitutional protection like people, then why not bitcoin?  OK now its a person so is this libel or slander I forgot which.

this is assuming that all the holders, does not buy others coins, which is blatanty wrong, it's obvious that not all the holders are just holding and watching the market, and hoping for it to skyrocket overnight or 10 years

some of them are shorters, other are buying like crazy to help sustain their holding(this is a good strategy, you just need to buy a little everyday), those that have big amount of money are still investing in bitcoin, only newbie that are afraid of losing everything, hold and do nothing else

At now, he is right.
Bitcoin just make the early adopt rich, and it's just a zero sum game.
but bitcoin is still in developing. Only the time can tell us the truth.

Stop posting because of your signature.
What you wrote is just, simply, nonsense. Bitcoin was never created in order to make people rich. Besides, for someone to become rich someone else has to lose money, it can't magically show up (aside from the government printing out more than it should, but that is another story).


I guess that there are still going to be individuals who are going to preach this nonsense. However, I'm hoping that their numbers are less than in 2014.

Nothing new in this article is not for me. But I agree that it is necessary to keep a certain number of Bitcoin, just in case.
The small amount that does not mind losing. Perhaps the price will go up further.
Clever words! Everybody can not become millionaires.
But I hope to join them.  :D
Not so little. Read the article - "10 countries that have a negative attitude to digital currencies"

nice, i just wondering about that article "10 countries that have a negative attitude to digital currencies" where would i find it,do you have its link? i wish my country is excluded :)

When I read the article, first thing that came to my mind is that there are obviously people or organization hoping and wanting to see bitcoin fall at all cost. And the more I read, the more I treasure my coins because these people obviously look at the network as a threat and who says that bitcoin isn't the future of money. Not me...

These guys are clueless and history will put everyone in its place. With it's pros and cons, overall Bitcoin is objectively the best form of money. The world needs to come to the realization that "money" is a representation of wealth that others are willing to recognize, not wealth itself. Given such realization, Bitcoin is better money than anything that has ever existed.

Matt O'Brien also announced on 11th march that the dollar was soon gonna be worth more than the euro(http://www.washingtonpost.com/blogs/wonkblog/wp/2015/03/10/at-this-rate-it-wont-be-long-before-the-dollar-is-worth-more-than-the-euro/). Since then the euro gained almost 7% against the dollar.

Oh the good old days when journalists know whatever the hell they were writing. This is just plain stupid. Bitcoin can change lives and has more appliances than just merely buying drugs online. I'd use it more often if it was accepted more often

This article actually led me to this forum. I know there are a whole lot of new changes coming, and Bitcoin will be even better as an exchange system, but that catch-22 is the hazard of it all. Its good for exchange when its price is stable, but the volume of exchange will drive up the price. They need some kind of a smoothing instrument, so the price can rise slowly, but never so much as to mess up exchanges in it. I am going to be very curious to see what kinds of things are innovated next, I think many things depend on it.

This "catch 22" is really just Gresham's law.  The same is true of USD in Zimbabwe, Gold in Yugoslavia, etc.  The canonical example to understand why it isn't a problem is Moore's law.  Why would we buy computer memory today when it will be cheaper tomorrow?  Well, because we actually want it today.  This explains a good portion of the 120k TX / day.  People actually want stuff, and all they have left is good money.. so, they have to use it.  Yes, any sane person would rather spend their their USD if possible, but..  watch the cold storage being brought out over the next few years.   

So now bitcoin mining is a waste of energy and harmful for ecology? Yeah right. Isn't our lives basically harmful for ecology as well? Bitcoin is not more harmful than the wastefulness of mining gold out of the ground, melting it down and shaping it into bars. Not to mention the building of big cities,  and how about the waste of energy printing and minting all the various fiat currencies?

Two words: Double standards.

We can waste all the the energy if we deem it necessary and pay for it. Who decides whether I use my electricity for gaming or for bitcoin mining - I can do whatever I want as long as I pay the bills and don't do anything illegal. A waste of energy sounds a bit like a waste of life doing something, but there is no such thing as wasting life as long as you do what you like and feel passionate about it :P

don't get me wrong, i'm in agreement with satoshi, who said "The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used. Therefore, not having Bitcoin would be the net waste."

i just used the wrong word there, i don't actually believe that the mining activity is really wasting any energy

I think the author is in really hurry to stop the bitcoins. Its really easy to criticize anything. Give bitcoins some time to get settled. Let more users flow in. Then we will see where does bitcoin go.

I know you're probably a throw-away newbie account, but I'm gonna respond to this anyway.

No, it wouldn't really be that absurd, actually. In many countries, the cost of making a penny ($0.01) actually exceeds the value of the penny.

The thing is, the cost of manufacture/production does not really matter to anyone except the manufacturer/producer.

If I had a car, I don't really care how much the manufacturer spent to make it; I just care about its market value (i.e how much I would pay when I buy or get when I sell). If I then sell my car to someone else, he does not care about the cost the manufacturer incurred to make this car either.

It's the same with money. Whoever owns the value only cares about the value, and not about how much went into it. The less the cost, the greater the profit for the producer. In the case of government money, it's the government/central banks. In the case of bitcoin, it's the miners. However the cost of production has no bearing on anything else.

This author have indeed done some research and thinking! The catch 22 part especially has some insight

However he's view is not enough deep: People will not store their bitcoin FOREVER, when their coins have appreciated enough (typically 10x to 100x), they will start to spend at least some of them (Speculators might dump all of them after a 10x increase, that's the reason for large price fall after a bubble)

And this behavior is self-supporting and long term sustainable: Saving for the long term and spend slowly in future will not change the shrinking supply nature of bitcoin. So, just like a pension plan, with a mathematically guaranteed return, that's the most attractive part of bitcoin

People tends to miss the huge cost associated with fiat money

The cost of making fiat money is typically a war, and the energy consumption of a war could be billions of times more than bitcoin mining, not even mention millions of lives involved

In fact, even after you conquered a country and start to print fiat money without any cost, you still can not make sure that those paper and numbers will lose their value dramatically, because they have to stand against the speculations on foreign exchange market. So central banks have to spend many more times fortune than bitcoin mining to build up their foreign currency reserve to protect the exchange rate of their local currency

Those costs were mostly hidden from the citizen for that country. Everyone working in the country are contributing to the value of its monetary system, just they don't know. But for bitcoin, if you don't care, you contribute absolute nothing, only miners do the work, so the efficiency is extremely high

What you said sounds like its reasonable, but it's really carefully crafted to hide the logical fallacies.

Let's say, for the sake of the argument, that bitcoin's price will stabilize at around $1000 USD present value in 2030. Sure the marginal cost of creating 1 BTC at that time will probably tend to 1BTC. However, for all the bitcoins created 2009-today, and probably in the forseeable future, the cost of those BTC created is MUCH lower than $1000/BTC. Therefore, by your logic, the cost of creating BTCs will be averaged out too.

Furthermore, the assertion that half of the resources go into the production and securing of bitcoin is simply wrong. A bitcoin is not a plastic fork. You can use it more than once. You can use it thousands of times, millions of times or even more. The money that miners spent on electricity etc doesn't go into the abyss; they go into the hands of other people who will then use that purchasing power to buy other stuff. That money will circulate many, many times. So the creation of BTC will only be a small part of the economy.

Agreed I think it is too early to come at any decision we bitcoins still need a time to settle down as it has gone through many ups and downs in the past once the prices are stable it will regain its shine.

Some good points, and more debate :)

Take a look at Gold: Central banks acquired gold as low as $35 per ounce many decades ago, but its market price is always decided by the current mining cost of one ounce gold. This is because the existance of arbitraging: If gold price is much higher than its mining cost, everyone will mine it and sell it immediately to get an immediate profit, this will drop its price to the cost

Furthermore, the resrouces going into gold/bitcoin production is to achieve one goal: To set a reference value for them. People value things using difficulty: The more difficult to get something, the more valuable it is. If it takes one day's mining using an ASIC farm to get one bitcoin, then bitcoin will be much more valuable when it took only one hours using a notebook to mine one bitcoin

No matter how many times bitcoin will be used, the lowest possible cost to get it will set its reference value, and that cost typically comes from production

Of course, doing something extremely difficult might not necessary generate demand, but if there is sufficient demand for bitcoin, and there is no way to further reduce the difficulty to acquire bitcoin, then cost will set a reference value

Gold never dropped back into their old $35 zone, this is obviously caused by fiat money inflation. Banks use printed money to purchase many different assets, and gold is a very popular asset, so the demand is always growing with more fiat money supply. But like described above, gold price can not be much higher than its mining cost due to arbitraging. Money printer who want to purchase as much gold as possible and as cheap as possible will invest in gold mines

Similarly, the demand for bitcoin might be extremely high, but as long as the cost is low, all the serious capital will first flow into mining, thus its price will always be close to mining cost. And when there is no way to further reduce the cost due to competition, capital will have to purchase on market, cause the price to surge

I was going to quote this as well. It honestly has some truth to it. It's what almost everyone wants the concept of bitcoin to be. "I hold it, 10 years from now, I'll be rich".

This isn't the concept of what bitcoin should be about. I feel like some of the "get rich" type of investors will circle around bitcoin like sharks and give people that type of notion about it that Bitcoin is just some investment scheme hoping to one day crash fiat. I do feel he's exaggerating though on title.

If everyone hold bitcoin for 10 years and start to cash out a little bit since the 11th year, the bitcoin value will rise forever, this is guaranteed by bitcoin's design

There is an academic understanding that fiat money's value is decided by its usage, that is because it has almost zero production cost and forced adoption. However, gold and bitcoin's value does not come from transaction usage, they are mostly decided by the demand of storing value and current production cost

In fact, holding will reduce the coin supply on market in a most significant way, while spending will only reduce the coin supply on market for a while (when coins are in the move, they are not available for purchase/spending). Holding 10 bitcoin is equal to spending 10 bitcoin once every hour (suppose the transaction take 1 hour to confirm). The only thing that spending does is to increase the awareness of bitcoin, but you don't really need to make advertisement for something that have true value, you hide it instead, wise people will find it by themselves

Bitcoin is decentralization system, it took more than only HOLD , miner need cost to life,also  scamer  hacker and cheater is live in bitcoin that why we need more than it

Please write in a language humans can understand, thank you.

Sorry for my bad english im not spoken in english

It is wrong bitcoin is the future currency and will be used commonly by all people in duture

I love how journalists like this think they are smarter than people like Reid Hoffman, Richard Branson, Marc Andressen, Etc. Putting all the technicals aside, the author thinks all of these people are stupid enough to invest and sing praises of a ponzi or pyramid scheme.

Matt O'Brien has been Anti-Bitcoin for at least 2 years as far as I remember. He was in The Atlantic.

This is first he writer about bitcoin
Why Bitcoin Will Never Be a Currency—in 2 Charts
Bitcoin could be Paypal 2.0, but it will never be the dollar 2.0. Not when prices would have had to fall 98.5 percent the past year if they'd been set in terms of Bitcoin.
http://www.theatlantic.com/business/archive/2013/12/why-bitcoin-will-never-be-a-currency-in-2-charts/282364/

Its a matter of how to go about this so-called ponzi scheme am I right?

Try to see it similar to how you would spend $20,000 a year going to college and pop up with a job. Thats a ponzi scheme as well too, it all varies on how your approach.

If this was reddit climate research forum, you would get your ass kicked out of here..

https://bitcointalk.org/index.php?topic=374873.0

I don't understand how people can literally ignore the novelty of block chain. Anonymity isn't the only thing that bitcoin offers. The current market doesn't have as many ecommerce related applications because of lack of security and hence reluctance of people to deal with it.

Security is a concern that is being take care off by certain upcoming companies, trying to make it as secure as possible attracting new users.
It's all just a matter of time when that level of security is reached and the use of Bitcoin and Block chain booms.

Etherium, I'm sure most of us here are aware of, is another novelty of block chain, you should check that out too.

Time will tell. More people are using bitcoin.

There never was such a time, we just weren't aware of it.