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Good article that details exactly why the bitcoin is a pyramid scheme

Started by Faust, April 09, 2013, 02:28:19 PM

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rong

did a little more research and this has me convinced that bitcoin will be essentially worthless within the next 10 years.

correct me if I'm wrong, but with no machines running the algorithms, bitcoin has no value.

bitcoin halving seems to disincentivise running the algorithms. 

this is different than gold in that once you've mined the gold, it exists and continues to exist.

i believe with bitcoin, there will come a time where large stakeholders will be buying computers just to run algorithms in order to maintain the value of their bitcoin.

eventually that will stop being cost effective.
"a real smart feller, he felt smart"

chaotic neutral observer

Quote from: rong on March 19, 2021, 12:03:13 PM
correct me if I'm wrong, but with no machines running the algorithms, bitcoin has no value.
Correct.  Without a third party to facilitate, no transactions can occur.

Quote
bitcoin halving seems to disincentivise running the algorithms. 
Maybe?  I'm not sure.  The people who run the processing infrastructure still get paid for every transaction they process.  (If you don't offer them enough, your transaction might be delayed...or not processed at all).

Quote
this is different than gold in that once you've mined the gold, it exists and continues to exist.
Also, the value placed on gold isn't purely imaginary; it has some industrial uses.

Quote
i believe with bitcoin, there will come a time where large stakeholders will be buying computers just to run algorithms in order to maintain the value of their bitcoin.

eventually that will stop being cost effective.
Seems plausible (although, they haven't been using regular computers for a while; the cost of electricity is too high to be cost-effective.  Custom hardware is necessary).
Desine fata deum flecti sperare precando.

Doktor Howl

Molon Lube

Faust

I no longer believe crypto is a pyramid scheme, though many different offerings were, things like bitcoin have established and other problems (such as an existential threat to the world with the Carbon and energy footprint from mining and the exchange being exponential over time) have grown.

Quote from: P3nT4gR4m on March 19, 2021, 01:11:40 AM
Quote from: chaotic neutral observer on March 18, 2021, 10:54:40 PM
What is the beginning of the end going to look like?  Give me a testable prediction, so that I can check in three months whether you were right or not.

Hyperbole - guilty as charged. The beginning of the end has actually come and gone. You sound like you missed it. In 2009 Bitcoin launched at around $0.0008 per coin. That marked the start of the money exodus. At time of writing  $1,806,885,026,917 worth of money has transferred from various fiat currency platforms to blockchain. Yes, there is ebb and flow for now and probably always will be until the government banks lose the fight. At that point all the money will be on chain. This is what the end will look like. When it happens, I wouldn't like to guess. Governments can be very stubborn when they put their minds to it. I used the phrase beginning of the end to signify an acceleration of this process. Like - it's really going to fucking take off in a big way.
If there is ever a systemic threat to currency the governements dont need to play fair:
In 2016 to combat tax evasion India, a population of 1.3 Bn changed their currency over night, billions in black market currency was lost right away.
Its possible to get money into crypto, but the nations will always be able to make it very hard to get it out, I dont see crypto every being able to overcome this regulation. Thats an extreme example, taxation on exchanges or regluation of anyone managing transactions will give them that long before an extreme measure is needed.
Sleepless nights at the chateau

altered

There's also infrastructure to consider. Like. Good luck switching rural Alaska to crypto. And Texas, since they learned the lesson very recently that when the power is out you can't use anything but cash. You aren't writing a transaction to the blockchain from the Khyber Pass.

Crypto as the money of the future is only viable in small countries with a lot of population density, so I can see why P3nt sees it as inevitable, but it's not realistic for most of the world, because poor people and rural folks need to engage in commerce too.

Blockchain as a replacement for the financial infrastructure of the world is one thing (the bonus features of Ethereum do legitimately have massive utility and something like that is a very good replacement for electronic funds transfer as we know it), but fiat currency will not go away, because it remains more useful than crypto in most circumstances no matter what happens in the future.

So. Yeah. Bitcoin and its relatives are no-hopers in the future. Blockchain has a chance, but it would replace the backend of plastic, not fiat currency.
"I am that worst of all type of criminal...I cannot bring myself to do what you tell me, because you told me."

There's over 100 of us in this meat-suit. You'd think it runs like a ship, but it's more like a hundred and ten angry ghosts having an old-school QuakeWorld tournament, three people desperately trying to make sure the gamers don't go hungry or soil themselves, and the Facilities manager weeping in the corner as the garbage piles high.

altered

All of that is of course ignoring the OTHER problems that crypto has, some of which Faust mentioned.

My issue with the idea that crypto is the future is based in the fundamental facts of surviving in reality as we know it. It loses more than it gains over fiat currency. This isn't a problem that can be solved, it's fundamental to the concepts.
"I am that worst of all type of criminal...I cannot bring myself to do what you tell me, because you told me."

There's over 100 of us in this meat-suit. You'd think it runs like a ship, but it's more like a hundred and ten angry ghosts having an old-school QuakeWorld tournament, three people desperately trying to make sure the gamers don't go hungry or soil themselves, and the Facilities manager weeping in the corner as the garbage piles high.

P3nT4gR4m

That the whole thing with the future. You're not going to be surviving in reality as you know it. Either you're not going to be surving in reality, period or that reality is going to be a whole nother kettle of fish ;)

I'm up to my arse in Brexit Numpties, but I want more.  Target-rich environments are the new sexy.
Not actually a meat product.
Ass-Kicking & Foot-Stomping Ancient Master of SHIT FUCK FUCK FUCK
Awful and Bent Behemothic Results of Last Night's Painful Squat.
High Altitude Haggis-Filled Sex Bucket From Beyond Time and Space.
Internet Monkey Person of Filthy and Immoral Pygmy-Porn Wart Contagion
Octomom Auxillary Heat Exchanger Repairman
walking the fine line line between genius and batshit fucking crazy

"computation is a pattern in the spacetime arrangement of particles, and it's not the particles but the pattern that really matters! Matter doesn't matter." -- Max Tegmark

altered

I do not think a Singularity-level event is in our near future. There's no reason to believe it, none of the drivers of such a thing are reaching the point where they could shape the world.

Even if it is, unless it's a post-scarcity gay luxury space communism sort of future, it will not lead to crypto becoming a replacement for fiat currency. Anything else won't change the fundamental problems underlying crypto as a universal currency replacement. Crypto requires power and connectivity to use -- these are the barriers, and they are baked into the very concept of crypto. They're absolutely insurmountable until everyone has power and connectivity and can RELY on having those things EVEN IN AN EMERGENCY, like say, a freak ice storm stomping Texas flat. And you'd have to be a ridiculously idiotic optimist to believe that THAT future is only a few years away; that's Star Trek-tier.
"I am that worst of all type of criminal...I cannot bring myself to do what you tell me, because you told me."

There's over 100 of us in this meat-suit. You'd think it runs like a ship, but it's more like a hundred and ten angry ghosts having an old-school QuakeWorld tournament, three people desperately trying to make sure the gamers don't go hungry or soil themselves, and the Facilities manager weeping in the corner as the garbage piles high.

rong

although technically incorrect, because we are all existing in the same time (at least, i think we are).

I think it may be a better perspective to consider that we are not.  Some people live much farther into the future than others.

It also very much seems like the future is approaching at an ever increasing rate.

so, while a singularity event might not be in our near future, it is in all of our futures.  and it is closer for some than others.
"a real smart feller, he felt smart"

chaotic neutral observer

Since further discussion from P3nT is apparently not forthcoming, I'm going to quote the below for future amusement (on the odd chance I'm still on this forum in two years).

Today's date is Mar 19, 2021.

Quote from: P3nT4gR4m on March 19, 2021, 01:11:40 AM
Couple of years and anyone not accepting crypto payments will be finding it as hard to turn a trade as anyone not accepting card payments does now. Couple of years. You can hold me to that.
Desine fata deum flecti sperare precando.

P3nT4gR4m

Quote from: altered on March 19, 2021, 07:26:43 PM
I do not think a Singularity-level event is in our near future. There's no reason to believe it, none of the drivers of such a thing are reaching the point where they could shape the world.

Even if it is, unless it's a post-scarcity gay luxury space communism sort of future, it will not lead to crypto becoming a replacement for fiat currency. Anything else won't change the fundamental problems underlying crypto as a universal currency replacement. Crypto requires power and connectivity to use -- these are the barriers, and they are baked into the very concept of crypto. They're absolutely insurmountable until everyone has power and connectivity and can RELY on having those things EVEN IN AN EMERGENCY, like say, a freak ice storm stomping Texas flat. And you'd have to be a ridiculously idiotic optimist to believe that THAT future is only a few years away; that's Star Trek-tier.

When did I say I thought this was going to be utopia? This is primates discovering a new technology. Think Facebook, google and amazon but infinitely more powerful. Blockchain started with currency back in 2012. Now it's moved on to all of economics and is starting to creep into contract law and government. This is bigger than just putting the banking system out of business, that's merely what happens first.

There you go chaotic - much better quote. Be a bit longer but, with a couple of miracles I'll still be here to crow 8)

I'm up to my arse in Brexit Numpties, but I want more.  Target-rich environments are the new sexy.
Not actually a meat product.
Ass-Kicking & Foot-Stomping Ancient Master of SHIT FUCK FUCK FUCK
Awful and Bent Behemothic Results of Last Night's Painful Squat.
High Altitude Haggis-Filled Sex Bucket From Beyond Time and Space.
Internet Monkey Person of Filthy and Immoral Pygmy-Porn Wart Contagion
Octomom Auxillary Heat Exchanger Repairman
walking the fine line line between genius and batshit fucking crazy

"computation is a pattern in the spacetime arrangement of particles, and it's not the particles but the pattern that really matters! Matter doesn't matter." -- Max Tegmark

chaotic neutral observer

I found this interesting:

https://financialpost.com/news/economy/the-fire-has-been-lit-u-s-federal-reserves-push-for-digital-dollar-worries-wall-street

The Boston Fed, together with MIT, is developing a digital dollar; details are expected to surface around July.  This "Fedcoin" would operate alongside cash.  Fiat currency wouldn't disappear; it would take a new form.

If this is deployed, I wouldn't be surprised if it largely replaced the existing private competing cryptocurrencies as a means of exchange.  It would be stable, boring... and the government would let you pay your taxes with it.



Desine fata deum flecti sperare precando.

P3nT4gR4m

Most of these fiat-crypto projects are building on etherium. Not sure if the US are planning to go the same route but it wouldn't surprise me if they did something retarded instead

I'm up to my arse in Brexit Numpties, but I want more.  Target-rich environments are the new sexy.
Not actually a meat product.
Ass-Kicking & Foot-Stomping Ancient Master of SHIT FUCK FUCK FUCK
Awful and Bent Behemothic Results of Last Night's Painful Squat.
High Altitude Haggis-Filled Sex Bucket From Beyond Time and Space.
Internet Monkey Person of Filthy and Immoral Pygmy-Porn Wart Contagion
Octomom Auxillary Heat Exchanger Repairman
walking the fine line line between genius and batshit fucking crazy

"computation is a pattern in the spacetime arrangement of particles, and it's not the particles but the pattern that really matters! Matter doesn't matter." -- Max Tegmark

rong

Quote from: P3nT4gR4m on March 23, 2021, 03:42:30 PM
Most of these fiat-crypto projects are building on etherium. Not sure if the US are planning to go the same route but it wouldn't surprise me if they did something retarded instead

It would surprise me if they didn't do something retarded
"a real smart feller, he felt smart"

P3nT4gR4m

Before I make a decision on something like this, I like to listen to as many for/against arguments as I can. I love you guys to death but regurgitated propaganda bullet points aint what I'm talking about when I say "arguments". With that in mind, this one flashed across my radar a couple of days back. Proxy wars are much more fun cos they're a lot less effort, right? Mike Green does a much better job than you guys and Pomp does a much better job than me.

Yeah, they're still talking about bitcoin so most of this is just covering basic principles that were hashed out half a decade ago but that's mainly just the clickbait factor. If they'd called it the best DeFi debate ever, they'd have been preaching to the choir and garnered a tenth of the ad impressions. Also Green wouldn't have understood the subject so wouldn't have been invited along ;)

https://www.youtube.com/watch?v=zA5jnK4v884

I'm up to my arse in Brexit Numpties, but I want more.  Target-rich environments are the new sexy.
Not actually a meat product.
Ass-Kicking & Foot-Stomping Ancient Master of SHIT FUCK FUCK FUCK
Awful and Bent Behemothic Results of Last Night's Painful Squat.
High Altitude Haggis-Filled Sex Bucket From Beyond Time and Space.
Internet Monkey Person of Filthy and Immoral Pygmy-Porn Wart Contagion
Octomom Auxillary Heat Exchanger Repairman
walking the fine line line between genius and batshit fucking crazy

"computation is a pattern in the spacetime arrangement of particles, and it's not the particles but the pattern that really matters! Matter doesn't matter." -- Max Tegmark