A scam?

[Gareth Nelson]

Something that constantly pops up from newbies - is bitcoin itself a scam somehow?

My very sarcastic answer - of course it is.

Here's the plan:

First, enable people to buy and sell BTC at prices determined by the market on exchange sites
Second, enable people to exchange BTC for goods and services
Third, enable some merchants to cash out their BTC back for fiat again while enjoying the lack of chargebacks and other advantages
Fourth,
Fifth, profit (and loss for all those silly people who purchased or provided goods and services in the free market)


Question here is what the "" is.

Newbies making the scam claim have a vague sense that someone is profiting and one day will reveal it was all a scam, something along the lines of this:

1 - Satoshi premines a pile of BTC and keeps hold of it
2 - BTC grows in value as people find it useful
3 - Satoshi goes "ya ha! now I can reveal my evil scam by getting rich off my innovation"
4 - Satoshi puts BTC on the exchange markets and sells it to willing buyers, thus profiting more - either dumping all at once and crashing the value or selling off a bit at a time
5 - In order to maximise profits, Satoshi chooses to sell off a bit at a time, again to willing buyers at market rates

If Satoshi is a scammer, so is anyone who ever got rich off a new and useful invention.

So is the "they" if not Satoshi?

Bitcoin exchanges and services to move funds into them (*cough*)?
What's the scam there exactly? "We'll provide a service to hook up buyers and sellers and will profit from this nicely" doesn't strike me as very deceptive.

Bitcoin-accepting merchants?
"A ha! Now we've encouraged you to come into the bitcoin scam by investing into bitcoin and paying them to us so we carry the risk of bitcoin itself being insecure or suffering a price crash, behold our evil scheme"
"Now we have you, our scam has worked and we have provided you with goods and services while you gave us worthless bitcoins, err......"

Miners?
Miner1: "All we have to do is invest in hardware and electricity costs and wait and soon the newbies will buy from us and we'll be rich! mwahahahaha"
Miner2: "Yeah, we could be rich or we could lose loads if this thing doesn't work out"
Miner1: "Shit, you're right - quickly, encourage a useful market for buying goods and services in bitcoin so that it has actual value for users"

Anyone who thinks bitcoin is a scam, here's a real scam:
Please send 1BTC to 14tu6Uvj6LAaK1cngz8BpRtzjCy6cm9n9g
If you send to this address and post the transaction ID here together with your own address and ask for it back, I promise I will not pay it back
(for those in on the scam - the scam is that I will in fact send it back if asked to, how very evil of me)

[kangasbros]

It is just easy to dismiss it as a scam, when you don't want to think about it and the complexities and possible socio-economical factors involved with it. I think it is kind of defense reaction.

[Gabi]

Yes bitcoin is clearly a scam
Making money just by running a software on your pc?

[Kluge]

Yes bitcoin is clearly a scam
Making money just by running a software on your pc?

+ someones just going to hack Bitcoin and take everyone's money. Everyone who uses Bitcoin is an idiot with no education in economics just throwing theyre money in a pit. How could people be that stupid to use illegal money on a computer?!

All the creator of this currency has to do is hack everyons' account and take their worthless coins, and then these idiots might learn.

[Phinnaeus Gage]

This thread is a scam, taking me away from reading the new Bitcoinica thread of which I've only read the OP in the past hour. Now lock this bitch and only unlock it when I PM you.  

~Bruno~

[Gabi]

Also everyone know making your own currency is illegal

Your pc printing money?   Is illegal! Someone call the cyberpolice now!

[Tachikoma]

This should be a sticky in the newbie forums.

[Boussac]

@OP
I think you bring up an important question because we all encounter from time to time people who have fallen victim to the "early adopter" fallacy.

It goes like this: because the early adopter have been able to mine between themselves for at least a year, perhaps two years (anyone can clarify this ? The network difficulty chart shows a sharp rise at the beginning of 2010 while the network hash rate stays low until the beginning of 2011), they have amassed anywhere between 2 and 5 millions bitcoins.
At todays exchange rate, that's between 15 and 40 million USD.
My answer:
1/ that's roughly what early investors in a successful tech start up company can walk away with.

2/ it's a one time capital gain: compare this to Wall Street salaries and bonuses year after year. Even in the midst of the worst economic crisis since the great depression, the total of bonuses paid by Wall Street investment banks in 2010 amounted to 21 billion USD (an average of 128 K per employee)

3/ Early adopters are crucial in any innovation: if one wanted to launch a new internet currency WITHOUT early adopters, one would have to present the invention to 2 billion internet users BEFORE the launch, arguably an impossible task, except perhaps for governments. Those who negate the necessity of early adopters are in fact implicitly stating that only governments can "print" money.

4/ In a decentralized currency, early adopters' advantage is diluted over time because they are gradually offloading to new users.
Central money works in the opposite direction: it starts out as a presumably democratic system and gets handed over to a cartel by regulatory capture over time.

[hazek]

Yeah Bitcoin definitely is a scam, no one ever just invented a currency plus it's not even real..

[Gabi]

It is not even backed up by gold like dollar or euro! 

[wikiaki]

It is not even backed up by gold like dollar or euro! 

I agree 

"! Bitcoin is a scam !"

 

[LightRider]

All money is a scam.

[finkleshnorts]

It is just easy to dismiss it as a scam, when you don't want to think about it and the complexities and possible socio-economical factors involved with it. I think it is kind of defense reaction.

Yep.

Economic cognitive dissonance

[kiba]

Remember, it is the natural state for human beings to be ignorant.