tyz (OP)
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October 17, 2017, 07:21:16 PM |
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Brazil Central Bank Chief Compares Bitcoin to Pyramid SchemeThe head of Brazil's central bank took a harsh position toward bitcoin earlier this week, comparing the cryptocurrency to a pyramid scheme. According to RttNews, central bank president Ilan Goldfajn was dismissive of recent price appreciation in the bitcoin market. And while he said it was key to "separate" bitcoin from other applications of its underlying technology, Goldfajn said that those buying cryptocurrencies are chasing the same kind of returns as those who invest in pyramid scams. https://www.coindesk.com/brazil-central-bank-chief-compares-bitcoin-pyramid-scheme/
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odolvlobo
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October 17, 2017, 11:04:23 PM |
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The bitcoin is a financial asset with no ballast that people buy because they believe it will appreciate. That is a typical bubble or pyramid [scheme].
Unfortunately, that is an accurate statement. If Bitcoin cannot find a use that justifies its current price, the price will not be sustainable.
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error08
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October 17, 2017, 11:38:12 PM |
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It is a biased opinion from Central Bank Chief, and most banksters may see it as pyramid scheme or bubbles, but the truth speak another. Bitcoin still gaining value and consider to increase over time instead of loosing its value, what makes it survive is people who believe in it and prefer to use bitcoin instead of banks systems. People will buy his words? Of course not, incompetent person in blockchain or bitcoin trying to spread FUDs about bibtcoin in the future, just like Jamie Dimon did but his company buy bitcoin at the dips, untrusted person obviously.
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d5000
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October 18, 2017, 04:20:25 AM |
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It is currently not easy to find out if he (and @odolvlobo) is right or not.
The "big problem" is that most users are seeing Bitcoin as a speculative asset. They would not hesitate to sell their holdings if it achieves a price that guarantees them the ROI they expect. So it is, basically, a "greater fools" game.
But on the other hand, usage "as a currency" definitively is growing. There is some development with Lightning Network. And since 2013 - the year of the last large bubble - transaction volume and block size have steadily increased ...
... until early 2017. That means that since these times Bitcoin has not really improved with respect of "real use", and so the whole gains in 2017 (about 400%!) could be viewed as "unjustified" ...
... but there is a (small) chance for the bulls that the price increase _could_ be justified: the (alleged) spam attacks that saturated the network in the last year could have "hidden" a real volume growth. But we don't really know ...
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Karartma1
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October 18, 2017, 06:20:00 AM |
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The bitcoin is a financial asset with no ballast that people buy because they believe it will appreciate. That is a typical bubble or pyramid [scheme].
Unfortunately, that is an accurate statement. If Bitcoin cannot find a use that justifies its current price, the price will not be sustainable. That is not an accurate statement. Bitcoin might be developing in a bubble right now (I think not) but you could never say it is a pyramid scheme. If you use the words bitcoin and pyramid scheme together I do not know why you are here. Internet had its bubble and we still are on the Internet! It was no pyramid scheme. Satoshi did not recruit anybody into bitcoin. He spent his time on this project and as far as the public know he did not get anything out of it. And he probably never will.
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odolvlobo
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October 18, 2017, 04:16:48 PM |
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The bitcoin is a financial asset with no ballast that people buy because they believe it will appreciate. That is a typical bubble or pyramid [scheme].
Unfortunately, that is an accurate statement. If Bitcoin cannot find a use that justifies its current price, the price will not be sustainable. That is not an accurate statement. Bitcoin might be developing in a bubble right now (I think not) but you could never say it is a pyramid scheme. If you use the words bitcoin and pyramid scheme together I do not know why you are here. Internet had its bubble and we still are on the Internet! It was no pyramid scheme. Satoshi did not recruit anybody into bitcoin. He spent his time on this project and as far as the public know he did not get anything out of it. And he probably never will. Members of a pyramid scheme make money by recruiting new members who must pay to join. The value of a person's membership is derived solely from their ability to get new people to buy into the scheme. The scheme has no other value. If people are holding bitcoins solely to make money from price appreciation, then Bitcoin is effectively a kind of pyramid scheme. Members (the people holding bitcoins) make money by getting more people (new members, in other words) to buy their bitcoins. The value of a holder's bitcoins is derived solely from the abilities of holders to get new people to buy bitcoins. According to the premise, Bitcoin has no other value.
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Xavofat
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October 18, 2017, 09:46:27 PM |
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Members of a pyramid scheme make money by recruiting new members who must pay to join. The value of a person's membership is derived solely from their ability to get new people to buy into the scheme. The scheme has no other value. That is a feature of a pyramid scheme, not the definition of a pyramid scheme. When you "join" BTC by buying it, your promotion of it is completely insignificant and you don't receive the profits like a person does when they engage in pyramid selling - every person who owns BTC benefits from it, but to such an insignificant extent that an ordinary person promoting it is useless to them. BTC is just an asset. That's all. If supply and demand is the same as a pyramid scheme, then I guess most things are pyramid schemes.
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cr1776
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October 18, 2017, 11:28:48 PM |
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Brazil Central Bank Chief Compares Bitcoin to Pyramid SchemeThe head of Brazil's central bank took a harsh position toward bitcoin earlier this week, comparing the cryptocurrency to a pyramid scheme. According to RttNews, central bank president Ilan Goldfajn was dismissive of recent price appreciation in the bitcoin market. And while he said it was key to "separate" bitcoin from other applications of its underlying technology, Goldfajn said that those buying cryptocurrencies are chasing the same kind of returns as those who invest in pyramid scams. https://www.coindesk.com/brazil-central-bank-chief-compares-bitcoin-pyramid-scheme/ That is kind of like Charles Ponzi criticizing gold and silver. Given the mismanagement by Central Banks over more than a century, their views and wishes usually are diametrically opposed to those of just about everyone else who has any desire to preserve wealth.
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odolvlobo
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October 18, 2017, 11:39:54 PM |
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Members of a pyramid scheme make money by recruiting new members who must pay to join. The value of a person's membership is derived solely from their ability to get new people to buy into the scheme. The scheme has no other value. That is a feature of a pyramid scheme, not the definition of a pyramid scheme. When you "join" BTC by buying it, your promotion of it is completely insignificant and you don't receive the profits like a person does when they engage in pyramid selling - every person who owns BTC benefits from it, but to such an insignificant extent that an ordinary person promoting it is useless to them. BTC is just an asset. That's all. If supply and demand is the same as a pyramid scheme, then I guess most things are pyramid schemes. In the perspective I am discussing, Bitcoin has no use other than buying or selling. In that scenario, it is no different from a pyramid scheme.
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Oo ako to
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October 19, 2017, 01:48:26 AM |
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Well, that was an expected statement coming from a person that is a head chief of the bank industry. They want a centalized system and we know btc is decentralized so he'll do anything to discredit and find more issues to bombard it because they still want banks to control finance.
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FomoATH
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October 19, 2017, 08:53:36 AM |
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Well, that was an expected statement coming from a person that is a head chief of the bank industry. They want a centalized system and we know btc is decentralized so he'll do anything to discredit and find more issues to bombard it because they still want banks to control finance.
I agree with you, we do not need to take these statements too seriously. The government and bankers will always be negative about the crypto currency. We must believe that bitcoin is our future
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d5000
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October 19, 2017, 07:27:17 PM |
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BTC is just an asset. That's all. If supply and demand is the same as a pyramid scheme, then I guess most things are pyramid schemes.
I agree with your first two sentences, but not with the third. Bitcoin, in the current "bubblish" and "permabullish" incarnation, has some "pyramidish" features. The reason is that its "usefulness" is much lower than its current price/market cap. This could be justified because of future developments, but currently we're trading at a value that is 20 times higher than the expected "fair price" if we apply the Quantity Theory of Money to it. Well, you could say it's "digital gold", but every digital good could be digital gold, including every altcoin. Why is Bitcoin more valuable? Because people speculate on future usage and mass adoption as a currency. But if this usage never happens, then it becomes similar to a pyramid scheme - we speculate that we could sell it, in the future, to a "greater fool".
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Carlton Banks
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October 19, 2017, 07:54:12 PM |
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Yes, if we value Bitcoin using the quantity theory of money. But you're forgetting something: Bitcoin is a new monetary paradigm. Money has never before been represented by pure information controlled by individuals, that's what the blockchain design made possible. For that reason, people are leveraging that new feature as much as they are speculating on Bitcoin's value, or using it in trade. Well, you could say it's "digital gold", but every digital good could be digital gold, including every altcoin. Why is Bitcoin more valuable? Because people speculate on future usage and mass adoption as a currency. But if this usage never happens, then it becomes similar to a pyramid scheme - we speculate that we could sell it, in the future, to a "greater fool" Nope, your propounding the "digital tulips" viewpoint. And you're wrong. When money is pure information, controlled by the holder, it's very difficult to take control away from the holder. Sure, blackmail, violence and threats thereof might work. Might. In previous monetary paradigms, it was much easier to take control of someone's money, it was always something physical, and so it existed someplace. If it was in a bank, someone with political or physical power could take it from that bank. If it was in a house, it could be taken by simple overwhelming force too. Hell, you could even hide the money somewhere smart, and it could still be found, even be accidental discovery. But no such possibility exists with cryptocurrency. It exists both nowhere and everywhere. And so, if someone keeps their cryptocurrency sufficiently private, or if not, then if their will is strong enough, no-one can take it by force or any other means. That's never been possible before, and is much more powerful as a monetary concept than any that precedes it. People are buying BTC because it really belongs to them, it's universal monetary sovereignty. That's valuable, and that's valuable right now, not just in the future. Because it was valuable in the past too, but was only afforded by a literal handful of super-powerful individuals. Everyone is that powerful now, if they choose to be.
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Vires in numeris
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d5000
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October 20, 2017, 01:11:22 AM |
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Carlton: What you say is mostly true - but my point is that another Bitcoin-like system (altcoins) could achieve the same level of "valuability". (I made a mistake in my previous post: not every digital good can achieve this).
Most altcoins are not really "competitors" for Bitcoin because they are token systems with a - varying, but mostly strong - control by a centralized entity that owns a large part of its supply. But there are altcoins that are not following that scheme (Monero, Namecoin, with some "hybrids" like Ethereum and LTC with weaker control by the centralized entity ...) and try to be as decentralized as Bitcoin is, and that is why they can be viewed as real competitors, where the owners "own" their money without any intermediary (not even the state).
The existence of these "real competitors" can be a problem for the "digital gold" paradigm, because we don't know if one of the "competing digital golds" out there can be dominant (as Bitcoin is now) in the future, and if this dominance will change (another coin taking the lead). This can - and will - lead to wild speculation and volatility - as long as the dominance and valuability is not backed by "hard facts" (=real usage).
Bitcoin can only achieve a stable "valuable" state and conserve its leadership if its ecosystem grows at a similar pace than its price (ecosystem growth can be delayed, but most happen eventually). Then all characteristics of a pyramid scheme disappear, and that's what we should be aiming for.
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tweetbit
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October 20, 2017, 04:53:23 AM |
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Can we expect good comments from them since bitcoin bitcoin phenomenon. They’re self interest/investments are more important than reality. He can’t hide his biases to this issue as he is the head of the central bank that monopolies the financial aspects of many country for many years. Just ignored them and let us focus on our goal on cryptocurrency.
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HODL
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panju1
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October 20, 2017, 05:38:39 AM |
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Can we expect good comments from them since bitcoin bitcoin phenomenon. They’re self interest/investments are more important than reality. He can’t hide his biases to this issue as he is the head of the central bank that monopolies the financial aspects of many country for many years. Just ignored them and let us focus on our goal on cryptocurrency.
We have heard the head of the IMF make some positive comments. She has asked governments and central banks not to ignore virtual currencies. She is also talking about a crypto-SDR, which could serve as an international currency.
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Opquar
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October 20, 2017, 09:26:05 AM |
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Either he knows nothing about Bitcoin, or he knows nothing about Pyramid Schemes. They have literally no similarities. Officials should really start educating themselves before releasing statements.
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ALT67890
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October 20, 2017, 10:57:16 AM |
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I’m panicking now as the chief said so “bitcoin is a pyramid scheme”. I’m shaking and wanted to stop using bitcoin. Just toying this situation for so much news, simultaneously attacking cryptocurrency but nothing really give a d**n attention and no bitcoiners even believing them.
In life being great to one career (professionals) doesn’t mean he knows everything.
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Gloriel
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October 20, 2017, 11:00:52 AM |
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It seems strange that competent people don't understand the blockchane technology. It's now the part of our future and will be forever. Like drones or 3D print...
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Carlton Banks
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October 20, 2017, 05:46:25 PM |
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Carlton: What you say is mostly true - but my point is that another Bitcoin-like system (altcoins) could achieve the same level of "valuability". (I made a mistake in my previous post: not every digital good can achieve this).
Most altcoins are not really "competitors" for Bitcoin because they are token systems with a - varying, but mostly strong - control by a centralized entity that owns a large part of its supply. But there are altcoins that are not following that scheme (Monero, Namecoin, with some "hybrids" like Ethereum and LTC with weaker control by the centralized entity ...) and try to be as decentralized as Bitcoin is, and that is why they can be viewed as real competitors, where the owners "own" their money without any intermediary (not even the state).
The existence of these "real competitors" can be a problem for the "digital gold" paradigm, because we don't know if one of the "competing digital golds" out there can be dominant (as Bitcoin is now) in the future, and if this dominance will change (another coin taking the lead). This can - and will - lead to wild speculation and volatility - as long as the dominance and valuability is not backed by "hard facts" (=real usage).
Bitcoin can only achieve a stable "valuable" state and conserve its leadership if its ecosystem grows at a similar pace than its price (ecosystem growth can be delayed, but most happen eventually). Then all characteristics of a pyramid scheme disappear, and that's what we should be aiming for.
So, to summarise: - I'm basically right, Bitcoin isn't a pyramid scheme
- yadda yadda yadda
- Bitcoin's a pyramid scheme, until you decide it's "real" money, when it magically isn't a pyramid scheme instantly
I don't think you even understand the most basic aspects of monetary theory. This is more or less verbatim from the Wikipedia article on Money: "Money is an emergent phenomenon from the process of trading goods. One good becomes the most common denominator of trade, and in turn becomes the most valuable trading good in it's own right" According to the very basics above, as well as the 7 properties Aristotle used to define good money tokens, Bitcoin is money. Not to everyone of course, but that's not necessary: everyone in the Bitcoin economy treats it as money, by definition (no different to how the Malaysian Riggit is not money to those who trade in the Chilean economny ![Roll Eyes](https://bitcointalk.org/Smileys/default/rolleyes.gif) ). Bitcoin's market price is immature, which makes it's exchange rate volatile until it matures, but it's monetary characteristics are sound.
So why are you trolling about pyramid schemes? This is cargo cult economics you're coming up with here. Pyramid schemes have no intrinsic value, they're definitively scams, where only either the originator (in this case, Satoshi), or a select group of lieutenants ever make a profit. You can't buy things in an economic market with your pyramid scheme tokens, whereas the Bitcoin acceptance amongst merchants has been steadily increasing for several years. Even people that bought Bitcoin last month have more purchasing power than they did before. Unlike in a pyramid scheme. So, I'm ever so sorry, but literally every Bitcoiner in it's 8 year history, even very new Bitcoiners, aren't going to take this incredibly faulty comparison of yours seriously.
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Vires in numeris
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