I am sorry, but this is the real world definition of "pyramid scheme", which is somehow not equivalent to "Ponzi scheme", to be a Ponzi scheme fraudulent activities of operators have to be involved.
No. The difference between a Ponzi scheme and a pyramid scheme is that in a pyramid scheme, it is explicit that your revenue comes from those you sign up and recruiting is emphasized. In a Ponzi scheme, you are told you can just buy the investment and sit back and wait for it to appreciate in value or dividends to be paid. And I totally disagree that a Ponzi scheme *must* have "operators" who make the misrepresentations. It is quite sufficient for the early investors to make those misrepresentations. And even so, I think it's reasonable to construe people like early adopters and Satoshi as "operators". These are not mathematically precise terms. Every definition about Ponzi scheme out there mentions that it has to involve fraudulent activities ,check for yourself, if you want to make up your own definition, fine, but please make it clear in the first place. And yes, early investors could certainly setup Ponzi scheme with bitcoin as an instrument, but it would be silly to call bitcoin itself a Ponzi scheme, it's like not only calling Charles Ponzi's business a Ponzi scheme, but calling the postal reply coupon a Ponzi scheme as well. |
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Wrong, you could claim whatever you want about bitcoin, a certain stock, etc, but that doesn't make that particular investment a Ponzi scheme, as you are just another normal investor, you are in a no more special position than the next one in the line. What really matters is what the people "run" it say, which bitcoin doesn't have any, and every bit of information is open and freely accessible, if you don't look it up it's just your laziness and can't blame anyone else. Besides, as bitcoin is not run by any people, it will never promise you high income return, an essential part of the running of a Ponzi business, you will just have to do the risk assessment yourself. I don't agree. One can certainly imagine a Ponzi scheme where the operator of the scheme never makes any false promises and just leaves that up to the early investors. So long as there is no realistic chance of a revenue source other than investment, earlier investors get money from later investors, and later investors are told that there is a reasonable expectation of an outside source of revenue, it's a Ponzi scheme. I am sorry, but this is the real world definition of "pyramid scheme", which is somehow not equivalent to "Ponzi scheme", to be a Ponzi scheme fraudulent activities of operators have to be involved. |
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I owed $15 to this girl I am hooking up with, and she was excited to get 0.3 bitcoins instead! She said she was gonna use it to pay for her kids to go to college (mostly jokingly lol) This must mean we are in a bubble  ok, that's almost as bad as that investor who, in 1929, was getting his shoes shined and the fricken SHOE SHINE BOY was talking about stocks and such. guy went and pulled his investments immediately. crashed happened the next day or something. i forget who this was. one of the big names. I don't think the analogy works with bitcoin. Our goal has been to push adoption in order to push main stream acceptance and usage. I find it strange that all of a sudden we are trying to act shocked, SHOCKED, that people we talk to about bitcoin continuously start to show interest in bitcoins. People talking about bitcoin is not a sign of a bubble. People being interested in bitcoin is not a sign of a bubble. It's a sign that bitcoin is doing what it is supposed to be doing. fair point. that assumes it's adoption driving the price rise though. if it is, your right. great. if it's not, and just speculators or something? could still go bad. personally i am hoping for the moon shot. What is unique about bitcoin is that the price has to be high enough for it to be useful. I mean who doesn't want to send money internationally without paying high fees? Who doesn't want to put their wealth in cold storage somewhere they can check on from time to time? But in order for all this to happen, the market has to be liquid enough in the first place. I am not the kind of people who will believe in a moon shot, but I will at least postpone my outburst of fear uncertainty and doubt from taking over me before we reach triple digits, the rally has to continue for bitcoin to survive, if you had been through the bottom of 2011 you will know how outrageously manipulated the market was then, simply because it was too small. Judging by percentage variation, the volatility now is way lower than it was then, and such volatility would not allow any business to run properly. |
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I can trust him 60%, he doesn't post often and has never started a thread himself.
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Bitcoin doesn't fit the definition of a Ponzi scheme, wherever you look up the definition, a Ponzi scheme has to be fraudulent, i.e., giving people false information, there is no false information in bitcoin itself, everything is there for you to know.
It does *if* you believe that the only value Bitcoins could ever reasonably be expected to have comes from other people buying Bitcoins. The fraud then would be the false claim that Bitcoins are a potentially-viable future crypto-currency and thus may reasonably be expected to gain value as a means of exchange, not just a store of value. If that belief is implausible, but widely spread by people who stand to make money from Bitcoins appreciating in value, then it fits the definition of a Ponzi scheme. (Value propped up by unreasonable representations. Only source of value future investments. Early investors profit from the money put in by later investors. Later investors must lose money because there's no real source of produced value.) That is, of course, a mighty big "if". Most of the people who claim Bitcoin is a Ponzi scheme (at least, in my experience) either don't realize that it's not a Ponzi scheme if there's a reasonable expectation of significant future value from a source other than investment or don't believe such an expectation is reasonable. Wrong, you could claim whatever you want about bitcoin, a certain stock, etc, but that doesn't make that particular investment a Ponzi scheme, as you are just another normal investor, you are in a no more special position than the next one in the line. What really matters is what the people "run" it say, which bitcoin doesn't have any, and every bit of information is open and freely accessible, if you don't look it up it's just your laziness and can't blame anyone else. Besides, as bitcoin is not run by any people, it will never promise you high income return, an essential part of the running of a Ponzi business, you will just have to do the risk assessment yourself. |
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Most early adopters may have already been done with their bitcoin holdings in the 2011 crash, you can have a look at the days destroyed chart, the February/March numbers are sufficiently high, but nowhere near the 2011 level yet, despite the time factor being considerably larger.
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damn you crazy BTC. I give up trying to sell high buy low, all I end up doing is sell high, buy higher.
After extensive calculation and analysis, I designed a new strategy. Now I buy high and hold then buy higher and hold. Works pretty good thus far. This really is the best way to go. I occasionally redistribute several of my coins at discounted prices, people out there need to use it for it to grow. |
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I am nervous, quite nervous, by old-time market standard the bubble has become way too hot to not bust, but again, this kind of growth is already beyond what could be expected from the old-time markets, so who knows.
I think you've stumbled upon the biggest reason we cannot predict bitcoin. There has been no precedent and unlikely to be one ever again. +1 Imagine if gold had been invented (or magically sprang into existence) 4 years ago... (and no bitcoin available) There is actually another reason, and that is the governments have seriously screwed up the economy. People thought things are fine, and they were willing to pay to keep the paper boat afloat because they didn't have another choice, now things are different. It kinda remind me of the early days of Linux in enterprise, people may only be half-heartedly into it, but they could use it as a bargaining chip, whenever they wanted Microsoft to make a better offer they would threat to switch to Linux, now they are doing the same thing to the governments. |
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I am nervous, quite nervous, by old-time market standard the bubble has become way too hot to not bust, but again, this kind of growth is already beyond what could be expected from the old-time markets, so who knows.
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If you think that the only significant source of value Bitcoins will ever have will be speculative value due to people believing their value will increase due to others who will believe the same, then it's not unreasonable to describe Bitcoins as a pyramid scheme, Ponzi scheme, or scam. This would make Bitcoins ultimately a zero sum game where every gain must be balanced out by somebody's loss with those late to the party footing the bill for those who got there sooner.
If you believe that Bitcoins may eventually (or already) have significant value as a means of exchange, then it is unreasonable to describe Bitcoins as a pyramid scheme, Ponzi scheme, or scam. Then buying and selling Bitcoins is not a zero sum game but a distribution of the the value Bitcoins create by providing a superior means of exchange.
Of course, even if it's reasonable to believe the Bitcoins will eventually have significant value as a means of exchange that still might not happen. In that case, Bitcoins aren't a scheme or scam but simply a good idea that failed. Most people will probably wind up losing money if that happens, but that will be because they took a calculated risk and it didn't pan out. That's the nature of risk.
Bitcoin doesn't fit the definition of a Ponzi scheme, wherever you look up the definition, a Ponzi scheme has to be fraudulent, i.e., giving people false information, there is no false information in bitcoin itself, everything is there for you to know. |
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But, what % of bitcoin activity is speculation vs trade? This is the scary part. Most people who are "doing well" equate doing well, as having lots of dollar-worth in BTC, not the BTC themselves. You can only realize bitcoin's full potential if people really put their money behind it, the market has to grow to a certain size and liquidity. I can give you a example: I would like to run a bitcoin remittance service, but if the bitcoin market in the destination country is not big enough, my daily liquidation will be able to swing the market price by +/- 10 dollars, if I want to process enough volume to pay our salaries with the fee incurred. Another example would be cold storage of serious wealth, needless to say people will only use it if they can be certain that bitcoin market is big enough to ensure their coins would not become worthless after years. People put money behind pirate, and other real world ponzis. Are you arguing that large pyramids have more potential? I agree. Geez, "bitcoin needs people to put their money behind it to succeed"+"ponzi needs people to put their money behind it "=bitcoin is a bigger ponzi??? That's one hell of a logic. |
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FinCEN published their guidance, then Al Gore showed his endorsement, hmmm.......conspiracy theory anyone?
CIA needs a higher exchange rate and depth in the market so they can use Bitcoin for clandestine purposes, just like they and the State Department use Tor. Okay, back into the rationality mode, I think Gore may wanted to show his support for a long time, but has thus far refrained from doing it because the legal status of bitcoin is unclear, he did not publicly support cannabis consumption despite being a regular user when he was young, now FinCEN somehow made things clear and he got a "go-ahead". Nah, Bitcoin has never been illegal, unlike cannabis. I think he's just a new user, as there have been so many new users the last couple of months (myself included). I mean, he may not want to be associated with drug trading, gambling, etc. Now the FinCEN published the guidance, he can say"Seems that the regulators don't consider it a problem, why should I?" |
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FinCEN published their guidance, then Al Gore showed his endorsement, hmmm.......conspiracy theory anyone?
CIA needs a higher exchange rate and depth in the market so they can use Bitcoin for clandestine purposes, just like they and the State Department use Tor. Okay, back into the rationality mode, I think Gore may wanted to show his support for a long time, but has thus far refrained from doing it because the legal status of bitcoin is unclear, (he doesn't want to be associated with drugs and gambling, etc.) now FinCEN somehow made things clear and he got a "go-ahead". |
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Next week or so will be exciting. Possibly have a new client.
So, is your new client..... |
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Looks like someone is buying big on the Al Gore news Nice  Loaded? He told us he has got a new client, right?  |
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Many bears are about to be Gored. |
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It looks like Al Gore just endorsed Bitcoin  "I'm a big fan of BitCoin" "Regulation of money supply needs to be depoliticized.... especially as it applies to virtual currencies" FinCEN published their guidance, then Al Gore showed his endorsement, hmmm.......conspiracy theory anyone? |
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How hard to be satisfied people are!  Think about it, 2 days ago would you not all jump for joy if you had known the price will be $60? Now it's just business as usual. |
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But, what % of bitcoin activity is speculation vs trade? This is the scary part. Most people who are "doing well" equate doing well, as having lots of dollar-worth in BTC, not the BTC themselves. You can only realize bitcoin's full potential if people really put their money behind it, the market has to grow to a certain size and liquidity. I can give you a example: I would like to run a bitcoin remittance service, but if the bitcoin market in the destination country is not big enough, my daily liquidation will be able to swing the market price by +/- 10 dollars, if I want to process enough volume to pay our salaries with the fee incurred. Another example would be cold storage of serious wealth, needless to say people will only use it if they can be certain that bitcoin market is big enough to ensure their coins would not become worthless after years. |
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This is exactly why Armory uses a scrypt-like algorithm for its wallet encryption. It does the 100,000 hashes of the passphrase, but requires them to all be stored in RAM at once, so you can do 100,000 table-lookups on it to get the final result. This makes GPU-acceleration pretty useless for an attacker (GPU threads usually only have a tiny amount of fast memory, not megabytes). That's why the Armory website advertises "GPU-resistant wallet encryption". (for reference, it's called the ROMix algorithm -- found in the same paper as scrypt, it's just that ROMix is much simpler despite being much less flexible about compute-memory tradeoff)
On the other hand, if you forget your password, you likely remember enough of it that you may only require a few weeks of single-threaded processing to find it.
Sorry, but on the Armory it said the wallet is encrypted with AES256, why is that? It is encrypted with AES256. There's two distinct steps to unlocking your wallet: - (1) Convert your password to an encryption key
- (2) Use the key to encrypt your wallet with AES256
Passphrase --> 32-byte AES256 key --> Encrypt Wallet The encryption key is a full 32-bytes of data, which would be impossible to guess. But your password/passphrase is much less than that. So an attacker doesn't need to guess the encryption key if they guess your password -- so they just need to guess a bunch of passwords, run them through (1), and then check if it's correct. Bitcoin-Qt and Armory both do this, they just use a different step-1: X,000 sequential hashes, forcing the attacker to spend a full 0.1-0.25 seconds to check whether they got your password correct. The difference is that the key-stretching used in Bitcoin-Qt only requires compute-time. It only requires a few dozen bytes of fast-access memory to convert your passphrase to an encryption key, it just requires a lot of hashes. Because of this, is very parallelizable -- an attacker with a bunch of GPUs having 2,000 threads each can get 100-1000x speedup compared to only using their CPU. But Armory key-stretching (and scrypt-based algorithms) requires each thread to have access to megabytes of fast-access RAM. Thus, you might not be able to put it on a GPU at all, or you would only be able to run 10 of those 2,000 threads at once. In that case, you might as well just use a CPU. Ah, I see, so it maybe slightly better to say "wallet key encryption" to avoid the confusion.  So in principle can certain key-stretching algorithms generate brute-force resistant keys from even relatively weak passwords(Say, only 8 characters with one capital), as long as the password is not commonplace? |
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