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C12

Digital 'Currencies' Are ALL A Scam

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Here's an interesting article on crypto currencies that's worth reading in full. 

Karl Denninger argues that they are a modern day Ponzi scheme (by design) which will most likely be made illegal at some point for a variety of reasons.

Digital 'Currencies' Are ALL A Scam
2017-06-17 08:35 by Karl Denninger
http://market-ticker.org/

https://cryptorum.com/threads/karl-d...ll-a-scam.217/

"ALL such "digital currencies" are by design and intent a means to separate you from wealth and give it to whoever founded said "currency." They are for this reason all effectively a pyramid scheme. This will inevitably lead to the seizure and closing of all such systems -- if and when governments figure it out. The reason is simple: With a finite and ever-more-difficult means of mining each successive coin the effect on value for participants is exactly the same as it is in any pyramid scheme. Since nothing of physical existence is created or dug out of the ground there is no utility value and thus no floor price, unlike gold or silver (both of which have industrial value due to the metallurgical properties.) The person who "invents" such a system gets to "mine" many coins at very low cost (in electricity or whatever.) He then watches the "value" of said coins escalate as each one becomes harder to "mine" and as hype takes over, and can convert that "wealth" into some other form, whether it be a fiat currency, real property or otherwise.

The founder always makes a grossly outsized "profit" in this fashion with the available profit dropping exponentially and ratably in every single case simply based on the number of participants. At the beginning recruiting others who also make money is easy because mining the coins is easy. However, over time recruiting others becomes harder and harder. This is exactly identical to what happens in a traditional pyramid scheme -- the founder gets a cut off all the sales from everyone under him. The next layer who all find the field "unmowed" with lots of customers make a lot of money too, but always less than the first group and so on. But since the number of customers is finite, just as is the number of coins, with each successive layer of participants it gets harder and harder to find others to transact in sufficient volume to turn a profit because the acquisition of each new (coin or customer) becomes exponentially more-difficult. It is thus impossible on a mathematical basis for any such design to be self-sustaining since it relies on an exponentially more difficult act in a finite world. ALL such systems are inherently ponzi schemes whether we are talking about digital currencies or the alleged sale of products."
 
 
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Edited by C12

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It's interesting the founder of Bitcoin is completely unknown, for obvious reasons I guess. This may one day go down as one of the greatest frauds of all time.

Edited by C12

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29 minutes ago, C12 said:

It's interesting the founder of Bitcoin is completely unknown, for obvious reasons I guess. This may one day go down as one of the greatest frauds of all time.

I read somewhere that he has some ridiculous number of bitcoin to his name but interestingly enough, has never cashed any in.

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Might be a reason why he hasn’t cashed out t in yet. Imagine owning 51% of all the worlds currency (if it successfully replaced all currencies). Maybe an accurate quote:

"Give me control of a nation's money and I care not who makes it's laws" — Mayer Amschel Bauer Rothschild

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The governments and central banks are probably quite happy for this to all play out. They'll watch the various technologies unfold and they can replicate it at a later date (as China is currently doing now).

It would very easy to ban and shut down access to the networks once they've seen enough.

I guess until this happens these Ponzi schemes will continue to suck in the masses... 

https://coinmarketcap.com/all/views/all/

Coinmarketcap now has 1,382 listed Ponzi schemes and growing rapidly. 

Edited by C12

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It doesn't matter how many times I try to convince myself these things are the future all I see is tulips. Its not the future. The technology, secure, trust based, byzantine all that good stuff, its great, but the token version that is crypto currency is at best trying to do things we don't need, and at worst a scam as per the article. What we could use is a platform to take all of the good things about ledger technology and base things on that, but not individual coins.

We don't need coins, tokens, because from the start bitcoin and its copies have tried to solve a problem that doesn't exist - we already have digital currency its called visa, we have digital peer to peer payment systems already (paypal f&f :P) and we already have digital store of wealth its called gold. You just buy a claim from a vault or ETF if you want the digital version. :lol: 

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I tell you what, bitcoin as a currency I'm finding to be pretty sh1t

I have 0.0056 left in an old wallet, about £60, I can't seem to do anything with it?!

I can't sell it on an exchange because it's too low, I looked on bitgild, their lowest order is 100 euro

I looked at buying a amazon voucher with it but you have to use bitpay or something, they give a QR code but no wallet address

How is £60 too low to be able to do anything with?! 

Edit > Not to mention people have advised not doing anything with atm because fees are high 

 

Edited by Kman

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I tell you what, bitcoin as a currency I'm finding to be pretty sh1t
I have 0.0056 left in an old wallet, about £60, I can't seem to do anything with it?!
I can't sell it on an exchange because it's too low, I looked on bitgild, their lowest order is 100 euro
I looked at buying a amazon voucher with it but you have to use bitpay or something, they give a QR code but no wallet address
How is £60 too low to be able to do anything with?! 
Edit > Not to mention people have advised not doing anything with atm because fees are high 
 
You can get the wallet number on Bitpay. I can't remember exactly how but thats how I did it for buying 3 Sovereigns from Sharps.

When you click the pay bill button there are 2 options 1 of which is qr scan & other is if you know actual costs with fees, click onto there & the wallet number will come up. I then used the wallet code to pay.

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The way I see it: I was introduced to Bitcoin early 2011. I did not find the whole concept very interesting, but, as you would imagine, had I invested back in 2011 and sold two weeks ago, I'd have made a fortune by now.

If, if, if...

I don't regret not investing but I do regret not mining. 2011 up to maybe 2013 was still a time you could easily mine bitcoins on a medium specs PC with a decent Internet connection.

But my biggest regret was not buying gold in early 2015!

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@KDave Has got the measure of this, save me typing.

So i'll type an objection to the article instead.  I dislike the misappropriate use of "ponzi" for anything someone doesnt like or doesnt understand.  This way we end up with anti-capitalists claiming the stock market or even economies themselves as ponzi schemes.  A ponzi scheme is a specific model where you promise rewards and bring in new people to pay out to the existing "investors".  Different from multi-level marketing where there simply a product being sold and if you dont sell you dont realise a profit.  One is illegal, the other is legal. 

The article is grossly incorrect because there is an assumption that the original founders pre-mine and therefore have a horde of coins to sell off.  This is applicable to many recent ICO, which are essentially unregulated equity listings, but its not applicable to all as stated.  Its just lazy to to look at something appreciating in value and cry "ponzi scam" because of a lack of understanding of economics.  People have given Bitcoin et al utility, even if one doesnt see it.

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9 hours ago, Kman said:

I tell you what, bitcoin as a currency I'm finding to be pretty sh1t

I have 0.0056 left in an old wallet, about £60, I can't seem to do anything with it?!

I can't sell it on an exchange because it's too low, I looked on bitgild, their lowest order is 100 euro

I looked at buying a amazon voucher with it but you have to use bitpay or something, they give a QR code but no wallet address

How is £60 too low to be able to do anything with?! 

Edit > Not to mention people have advised not doing anything with atm because fees are high 

 

Keep hold of it. With the amount of hype, it could be worth Millions£££££!! next year...no doubt if that happened you would have even more problems trying to get rid of it.

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12 hours ago, KDave said:

We don't need coins, tokens, because from the start bitcoin and its copies have tried to solve a problem that doesn't exist - we already have digital currency its called visa, we have digital peer to peer payment systems already (paypal f&f :P) and we already have digital store of wealth its called gold. You just buy a claim from a vault or ETF if you want the digital version. :lol: 

I have tried to educate myself over the Christmas period by reading a book and various articles on Cryptos. Admittedly I have invested a very small amount in a couple of shares associated with the "new system" but not directly in coins. This is because I believe that people can still make money during times of bubbles as long as you recognise that it is a bubble. However I really don't believe in the fundamentals of the shares I purchased :o

I have to agree with @KDave. The arguments in the book/articles are that transactions are low cost (as opposed to western union), they are digital, and that each transaction is logged. Am I missing something as Paypal F&F and my Debit card does this. The value of Cryptos aren't really backed by anything other than faith. 

What I don't like about our current paper/plastic/digital currency is that governments (and banks) can just print a load more or add a few zeros. I cant help but feel that doing away with Gold backed currency will bite us (or them) on the arse one day.

My Bank of Zimbabwe Ten Trillion dollar note takes pride of place in my house as a reminder as to how fragile currencies can be when confidence evaporates. I guess this will happen to Bitcoin at some point but could also easily happen to the US $.

Anyway, I'm off to the garden centre now as spring is on its way and I need to plant those tulips!

 

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Bitcoin was great in the early days when the price was steady and not as volatile. It was useful for it's intended purpose, a means of transfer of money that was beyond the control of world governments; a plaything of wannabe anarchists and criminals. At some point it will die off completely for the reasons already mentioned. In the meantime it will continue to be a vehicle for speculation with consequent fortunes made and lost.

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5 hours ago, sovereignsteve said:

Bitcoin was great in the early days when the price was steady and not as volatile. It was useful for it's intended purpose, a means of transfer of money that was beyond the control of world governments; a plaything of wannabe anarchists and criminals. At some point it will die off completely for the reasons already mentioned. In the meantime it will continue to be a vehicle for speculation with consequent fortunes made and lost.

It will become extinct like all other illegal P2P networks end up being. I can remember the days of Napster, Limewire, Bearshare and eDonkey back in the early 2000's before they got banned, blocked and shutdown.

The odd thing about this 'exciting and new' blockchain technology is that is just an accounting ledger based on the same technology used nearly 20 years ago. 

As an investment, Bitcoin is the highest risk asset you can own since it's value can collapse to almost zero in the blink of an eye. 

Edited by C12

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Half the posts I see on here are just bitter 😂😂😂😂😂

misunderstood and any time something new comes along people hate it till they have to use it. 

People will keep on hating all the way up.

Bitcoin can't be shut down. If you believe that your research must be poor.

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Just now, JCRJM said:

That makes the whole thing a ponzi?

Just highlighting something that's pretty funny .I guess the humour up in Scotland might be a bit different. 

 

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I just want to know if you don't trust the fiat money like many on here. 

You don't trust crypto currencies.

You only trust gold and silver as 'real' money.

If i want to purchase something across the globe. How may I do this with my ounce of gold in my house? 

If someone gave you 1oz gold and 0.1 BTC today and you had to make a purchase from china for around £1000. (not exactly but near enough what they are worth) How would you do this? Please don't tell me you will use fiat as you are against that. Also please don't tell me you will use a gold backed crypto because then we are back to the whole situation about do they really have the gold where they say they hold it? 

If BTC is a ponzi its doing a good job. 

2 minutes ago, C12 said:

Just highlighting something that's pretty funny .I guess the humour up in Scotland might be a bit different. 

 

Must be

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11 minutes ago, C12 said:

How about some Potcoin, Dopecoin or Ganjacoin? :lol:

https://www.ganjacoinpro.com

https://dopecoin.com

http://www.potcoin.com

These are gimmick coins at best and potential scam coins that give the whole ecosystem a bad name.   Potcoin claims to provide transactions for the legalised cannabis industry... something you could use regular cash payment options for, or another existing crypto such as Litecoin, so what on earth is the point of it?

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