John McAfee accidentally just revealed why Bitcoin is total fraud: Behold logic

[krishnapramod]

A rational market price for something that is expected to increase in value will already reflect the present value of the expected future increases. In your head, you do a probability estimate balancing the odds that it keeps increasing.

In the absence of a market to establish the price, NewLibertyStandard's estimate based on production cost is a good guess and a helpful service (thanks).  The price of any commodity tends to gravitate toward the production cost.  If the price is below cost, then production slows down. If the price is above cost, profit can be made by generating and selling more. At the same time, the increased production would increase the difficulty, pushing the cost of generating towards the price.

In later years, when new coin generation is a small percentage of the existing supply, market price will dictate the cost of production more than the other way around.

At the moment, generation effort is rapidly increasing, suggesting people are estimating the present value to be higher than the current cost of production.

1. As difficulty increases, the cost of production would increase, thus gravitating the production cost towards the price.

2. Market price dictating the cost of production. Limited supply and as the demand for Bitcoin increases, price increases to keep the cost of production lower than the market price.

Yeah, if Bitcoin price drops considerably then difficulty would decrease to meet the cost of production.

Mining is a competitive industry. Even with increasing difficulty miners would find a way to remain profitable through cheap electricity, renewable resources, and more efficient equipments.

Another worthless article.

[Zionatin]

Article doesn't make much sense.  Seems the writer is assuming that mining Bitcoin isn't profitable? If yes, then I think he misunderstood McAfee.

Yes it's ridiculous. Absolutely clueless person talking about and saying crazy things none of us have even heard of since none of us have entertained such nonesense. Saying "bitcoin is fraud" doesnt even make sense. It's not even proper English. It sounds like something someone who doesn't speak English would say and it's lost in translation.

[Corporatocracy]

Furthermore, the "artificial work" aspect of Bitcoin mining and its artificial computational complexity is the digital equivalent of paying people to dig ditches and fill them in again while claiming the activity boosts economic output.


That's a good counter point. I'm for the movement, but there's no denying there's many oft repeated fallacies.

[dreamer81]

I can totally not see where he said it's a fraud. You have over analyzed this article to your own doom. Hilarious joke. He says nowhere that i's fraud. So stop spreading fud.

[PMmesexycoins]

Article doesn't make much sense.  Seems the writer is assuming that mining Bitcoin isn't profitable? If yes, then I think he misunderstood McAfee.

Yes it's ridiculous. Absolutely clueless person talking about and saying crazy things none of us have even heard of since none of us have entertained such nonesense. Saying "bitcoin is fraud" doesnt even make sense. It's not even proper English. It sounds like something someone who doesn't speak English would say and it's lost in translation.

While I disagree with their assessment, the rest of the article's writing looks fine to me. Everyone has their own agenda.

[LTEX]

Two words:

Difficulty Adjustment

[Chrystora123]

what John Mcafee thinking , he no understand what he say , just like JP morgan , i think they invest to in Bitcoin and they make these argument because both want to be famous again , lol 

[NobodyIsHome]

Heh, the "unnecessary" computation is there to keep a window open (block time) to allow every node the opportunity to find a block.  If PoW wasn't required, then we'd have to find some other way to distribute the work.

[Kprawn]

1-The author does not understand difficulty and it's ability to dynamically adjust.

100% correct, the author have no clue what he is talking about. In his mind the difficulty is being manually manipulated,

which is not the case with Bitcoin. This was specified in the protocol when it was released. No entity or developer are adjusting

the difficulty manually. This is determined by the amount of hashing power that are added externally by people who starts the

extra miners.  ...... Why do these idiots create articles like this, without doing their research? They are making fools of

themselves. 

[Marbella_Broker]

It make for an interesting read, but I do question his final intentions.

Sure hope McAfee can deliver something tangible and not just another cash cow.

[Don Pedro Dinero]

I had already seen that interview before reading this, so it’s been quite shocking to me that supposedly McAffe has revealed accidentally why it is a fraud but after reading that it is quite clear is that the fraud is the conclusion he is trying to draw. He us just making biased assumptions about bitcoin and stating them as a fact, for example he says that bitcoin price is in a bubble but he doesn’t prove that. A high price doesn’t always imply a bubble.

[Topper]

All points are ok for sure, as I was believing btc will improve itself like a never ending before its move down to 2k levels, each downward movement the deeper and deeper, next time we might see lower levels. Becomes like a wheel spinning, trying to reach 5k then something happens and drop down immidiately to 2k levels. Do you think that it is a fake movements? Is this movements created?

We will find out soon. There is a rumor that JPM sold BTC short in June/July to bring the price down. Some say they have a buy option at $2500. If you look at the chart, BTC went down from $2,800 to $1,700. JPM might have known that China was about to close exchanges and speculated that BTC would've taken a severe dip.
But what happened (assuming the rumor is true)... the market just soaked in all the BTC like a sponge. After the short sale ended, BTC rose to a new $5k high. And now it's back to $4k after the market soaked up the BTC from the Chinese exchanges. In that case: Yes, the downward movements would be artificial, it would be explain why miners like Genesis aren't paying out BTC, because JPM is most likely to have 'em lend by big miners. It might be even possible that Mcafee lend them too and why there was a $16M BTC transfer between two wallets w/o cashing them in prior to June.

Now, I don't know if these rumors are correct or just imagination, but the future will tell. If JPM thought they could 'destroy' the trust in BTC by selling them short just a month before China was announcing to close exchanges and giving them back at a waaaay lower price, BTC will go up a lot, depending on how much BTC JPM has to buy back... or the insurance company that gave them a $2,500 per BTC buy option.