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Merged Bitcoin - Part 3

The tragedy of Crypto is that it correctly identifies all the problems with modern banking and finance, and then proceeds to repeat them all.
 
Dr.Sid said:
It's still 6 times more than March 2020. So nothing really out of ordinary.
Bottoms on logarithmic graph line up quite well since forever. 20 is somewhat bellow that line though.
So as always .. it's either good time to buy .. or the end :D
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Bitcoin has now underperformed the S&P 500 since the start of 2018. Maybe now is a good time to buy that instead. Or better yet a Russel 2000 index fund, since it has lower price:earnings ratios.
 
Dr.Sid said:
Ponzi scheme usually works with investment and returns, which are taken from investments of new users. No other transaction is possible. Price is fixed. It's centralized. Usually does not have global reach. Usually is not electronic. Usually actually you buy something physical (or service) for you investment. It would be easier to sum what's similar with ponzi scheme: people invest money into it in believe they will make money, while it's clear that most of them won't. Also the fact the investors usually do not understand the mechanism well. And that's about it.
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Firstly, you are using the word "usually" quite a lot which means that many of the features you listed are not absolutely needed for something to be a Ponzi scheme. For example the "usually actually you buy something physical" feature is only applicable to a subset of Ponzi schemes called "multi-level marketing".

The thing that makes Bitcoin similar to a Ponzi scheme is that the the early investors make money at the expense of the later investors and there is no other mechanism for increasing the value of Bitcoins.

Is gold commodity or ponzi scheme then ?
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Gold is a commodity.

Why do we need gold ?
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Gold is malleable, shiny, doesn't tarnish and it also conducts electricity very well. That makes it extremely sought after for jewellery and electronics.

This is the problem with the crypto cultists. They think answering a question with a question makes them look smart.

Why can't you accept it's simply something new ? Something which has features of commodities, also features of currencies, and also has features nothing else has.
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Why can't you answer the damn question?

I've told you what we need gold for. Now you tell me what we need cryptocurrency for.
 
jeremyp said:
The thing that makes Bitcoin similar to a Ponzi scheme is that the the early investors make money at the expense of the later investors and there is no other mechanism for increasing the value of Bitcoins.
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Ponzi schemes work until the investors find out that there is no money making scheme in it after all. Only then do those still invested in the scheme lose their investment.

You are saying that Ponzi schemes fail in the end and bitcoin will fail in the end therefore bitcoin is a Ponzi scheme. This is the equivalent of saying my dog is a cat because it has 4 legs.

You have no basis for saying that bitcoin will fail in the end except for a fortune cookie. You can't assume that it is a ponzi scheme because that is what you are trying to prove. This is the logical fallacy of "begging the question".

The simple fact is that bitcoin is a tradable digital asset. Nothing more. Nothing less.
 
jeremyp said:
The thing that makes Bitcoin similar to a Ponzi scheme is that the the early investors make money at the expense of the later investors and there is no other mechanism for increasing the value of Bitcoins.
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But that's not true. In ponzi scheme the 'market cap' rises, rises .. and then it collapses. Bitcoin is normally traded, the price goes up, down, up again. Buying early and selling later does not guarantee profit. You have to buy low, and sell high. And for example now the price is dropping, so people who buy later are in better position to make profit.

jeremyp said:
Gold is a commodity.
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What would be the price of gold if it suddenly become abundant, let's say like iron ? In other words, how big % of gold price is it's usefulness, and how big % of the price is just a hype ?


jeremyp said:
I've told you what we need gold for. Now you tell me what we need cryptocurrency for.
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We don't really need cryptocurrency. Just as we don't really need gold. Both are useful for some things .. but that is not what dictates their price. Both are primarily used as means of value transfer, as store of value (also both independent of governments), and for speculation.
 
Dr.Sid said:
But that's not true. In ponzi scheme the 'market cap' rises, rises .. and then it collapses. Bitcoin is normally traded, the price goes up, down, up again. Buying early and selling later does not guarantee profit. You have to buy low, and sell high. And for example now the price is dropping, so people who buy later are in better position to make profit.


What would be the price of gold if it suddenly become abundant, let's say like iron ? In other words, how big % of gold price is it's usefulness, and how big % of the price is just a hype ?




We don't really need cryptocurrency. Just as we don't really need gold. Both are useful for some things .. but that is not what dictates their price. Both are primarily used as means of value transfer, as store of value (also both independent of governments), and for speculation.
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Are you conflating scarcity and hype?
 
psionl0 said:
Ponzi schemes work until the investors find out that there is no money making scheme in it after all. Only then do those still invested in the scheme lose their investment.
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Agreed. And what do you think happens when the Bitcoin investors realise there is no money making scheme in it after all?

You are saying that Ponzi schemes fail in the end and bitcoin will fail in the end therefore bitcoin is a Ponzi scheme. This is the equivalent of saying my dog is a cat because it has 4 legs.
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No. I'm saying that Bitcoin is like a ponzi scheme because the early investors make money at the expense of the latter investors. There's no other mechanism for making money out of it.

You have no basis for saying that bitcoin will fail in the end
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Nothing lasts forever. Bitcoin will fail eventually, one way or another.

The simple fact is that bitcoin is a tradable digital asset. Nothing more. Nothing less.
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But why trade in it when it is good for nothing that can't be done better with fiat currencies or real commodities?
 
Dr.Sid said:
But that's not true. In ponzi scheme the 'market cap' rises, rises .. and then it collapses. Bitcoin is normally traded, the price goes up, down, up again. Buying early and selling later does not guarantee profit. You have to buy low, and sell high. And for example now the price is dropping, so people who buy later are in better position to make profit.
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You know the price of Bitcoin isn't magic? The only way to buy low is if somebody sells low and the only way to sell high is if somebody else buys high. Bitcoin is a zero sum game. No new value is generated by trading in Bitcoin. In fact, you could argue trading in Bitcoin destroys value because of the amount of energy required to validate transactions.

What would be the price of gold if it suddenly become abundant, let's say like iron ?
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It would be much lower. But one of the reasons the price of gold is pretty solid is because we know that's not going to happen.

In other words, how big % of gold price is it's usefulness, and how big % of the price is just a hype ?
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No idea, but the percentage that is its usefulness is not zero.


We don't really need cryptocurrency. Just as we don't really need gold. Both are useful for some things .. but that is not what dictates their price. Both are primarily used as means of value transfer, as store of value (also both independent of governments), and for speculation.
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So you keep saying, but I return to the question that you and psionl0 will not answer. What is cryptocurrency useful for that is both legal and not better served by other means like fiat currency?
 
jeremyp said:
Agreed. And what do you think happens when the Bitcoin investors realise there is no money making scheme in it after all?
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They already know that. Bitcoin is not a share in any scheme whatsoever. It is purely a digital asset whose price fluctuates.

jeremyp said:
No. I'm saying that Bitcoin is like a ponzi scheme because the early investors make money at the expense of the latter investors. There's no other mechanism for making money out of it.
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FALSE! This isn't even the definition of a ponzi scheme. It is the runner of the scheme who makes the money. Some investors who get in early can also exit with a profit but most will be left high and dry when the scheme fails.

Bitcoin is just a tradeable asset. You make money by buying low and selling high - just like every commodity in the world.

jeremyp said:
Nothing lasts forever. Bitcoin will fail eventually, one way or another.
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Pure fortune telling. You are just one of millions who have made that prediction every single time a bitcoin bubble burst. They have all been left with egg on their faces when bitcoin recovered yet again.


But why trade in it when it is good for nothing that can't be done better with fiat currencies or real commodities?[/QUOTE]
Still can't be bothered to read the explanations?
 
jeremyp said:
So you keep saying, but I return to the question that you and psionl0 will not answer. What is cryptocurrency useful for that is both legal and not better served by other means like fiat currency?
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Fiat currency is regulated and dependent on currency issuer. Bitcoin is not.
Bitcoin clearly has something people want. And I'm saying it's the same thing which gives gold value. It's scarce, cannot be faked, can be easily traded, is universally accepted, also it's well known. Those are all values.

And bitcoin is also shiny. When was the last time you heard someone boasting about his gold online ? ;)
 
psionl0 said:
They already know that. Bitcoin is not a share in any scheme whatsoever. It is purely a digital asset whose price fluctuates.
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You realise that when everybody realises it is a scam, the price will fluctuate to zero?


FALSE! This isn't even the definition of a ponzi scheme. It is the runner of the scheme who makes the money. Some investors who get in early can also exit with a profit but most will be left high and dry when the scheme fails.
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When Bitcoin fails, everybody still in it will be left high and dry. The people who sold at $60k have exited at a profit. The people who bought at $60k are currently high and dry. Thew people running the scheme i.e. the Bitcoin miners are probably doing ok depending on where they get their electricity.
Bitcoin is just a tradeable asset. You make money by buying low and selling high - just like every commodity in the world.
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Except it has no value except to scam other people out of their money.

Pure fortune telling. You are just one of millions who have made that prediction every single time a bitcoin bubble burst. They have all been left with egg on their faces when bitcoin recovered yet again.
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As I said, nothing lasts forever.

But why trade in it when it is good for nothing that can't be done better with fiat currencies or real commodities?
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Still can't be bothered to read the explanations?
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Nobody has posted any.

If I want to trade in commodities, why not use real commodities that have a value to consumers of the commodity? If I want to invest in something, why not invest in stocks and shares? If I want to transfer money from A to B, why not use fiat currency? If I want to buy something, why not use fiat currency?
 
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Dr.Sid said:
Fiat currency is regulated and dependent on currency issuer. Bitcoin is not.
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Well that's an advantage for fiat currency.

Bitcoin clearly has something people want.
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So does heroin.

And I'm saying it's the same thing which gives gold value. It's scarce, cannot be faked, can be easily traded, is universally accepted, also it's well known. Those are all values.
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Gold has value because it has utility for (e.g.) making jewellery and electronics. The fact that it is also scarce inflates that value and it is true that some of it is due to people perceiving that it is valuable, which is circular but it's not everything. with Bitcoin, the circular bit is everything.

Bitcoin is artificially scarce but that's down to a few lines of code that could easily be removed. Indeed other cryptocoins do not have the same kind of artificial scarcity.

I don't know how you arrived at the idea that anybody would believe the claim that Bitcoin is universally accepted. I can't go down to the corner shop and buy a pint of milk with it. I can't pay it into my bank account and I can't pay my taxes with it.
 
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jeremyp said:
So you don't want to engage. That's fine. I'll put you down as a "have no credible arguments".
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You are the one who is not engaging. No matter what counter arguments are made, you simply repeat discredited arguments that were made more than 10 years ago over and over again.
 
Dr.Sid said:
Fiat currency is regulated and dependent on currency issuer. Bitcoin is not.
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That's what makes it useful as a currency. The fact that bitcoin is not, means that it is by definition useless as a currency.

Dr.Sid said:
Bitcoin clearly has something people want.
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Not really. Most people don't see it as anything but numbers on a chart, and get fooled into thinking it's somehow similar to other things like stocks, bonds and commodities that have similar looking charts but actual represent real things with significant real utility.
 
lomiller said:
That's what makes it useful as a currency. The fact that bitcoin is not, means that it is by definition useless as a currency.
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It's clearly not useless as a currency, as it is used as a currency. Certainly is not good as a currency. But it may be better than some currencies in the world. And it's similar in this aspect to gold, which was used as currency for ages.

lomiller said:
Not really. Most people don't see it as anything but numbers on a chart, and get fooled into thinking it's somehow similar to other things like stocks, bonds and commodities that have similar looking charts but actual represent real things with significant real utility.
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I'm talking about people who bought bitcoin. The market cap is $400 billion at the moment. That's not insignificant amount of 'want'.
 
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