$34 billion dollars and many of the biggest names in finance and technology seem to think there's a little more to the story.
The solution was to prime the pump with a pyramid scheme. By structuring the system to highly reward risk-taking early adopters, Bitcoin motivated millions of dollars of high-risk early investment which is worth billions today.
But, return on investment was only a nice side effect on the way to the end game. The end game was to get Bitcoin up and running as an exchange medium --only coincidentally as an investment vehicle. As an exchange medium, Bitcoin is not yet 100% solid. But, in general the plan has already worked. Someone in Haiti can exchange value with someone in the Ukraine and for once there is little that the games of the politicians or the banks can do to stand in their way. That was the real goal. A bunch of nerds gambling was just a necessary bit of fun on the way to setting that up.
This doesn't mean that crypto currencies are inherently scams, but it is a terrible way of defending them.
[0] https://en.wikipedia.org/wiki/Bernard_Madoff#Size_of_loss_to...
>Timestamps for subsequent blocks indicate that Nakamoto did not try to mine all the early blocks solely for themselves in an effort to benefit from a Ponzi scheme.
But they could have.
>The public bitcoin transaction log shows that Nakamoto's known addresses contain roughly one million bitcoins. As of 7 February 2017, this is the equivalent of over US$1 billion.
Starting your own cryptocurrency doesn't seem like a bad way to make a buck (particularly provided it becomes as successful as bitcoin), all thanks (eventually) to "the biggest names in finance and technology".
Granted, there's a strong difference between "potential scam" and "scam" (hell, it's the difference between Torcoin and every legitimate, well-regulated non-crypto currency).
This seems sort of unfair. I mean, one of the things that has helped stabilize Bitcoin is that it wasn't controlled by a single entity, and many of the early blocks haven't gone anywhere. Several other cryptos have done poorly because some early consortium got too much control and everyone else backed off.
One advantage of the public transaction log is that it helps people judge whether they're being scammed this way. Nakamoto made a killing, certainly, but I also suspect that a sudden sell-off of the origin block would tank prices.
My only theory to date is these are sour grapes type folks who are upset that they've missed the bus in terms of crypto's fantastic investment value.
The only comfort these people get is jeering from the sidelines in hopes that an eventual collapse will prove them "right"
The currency itself is beholden to a small group of dedicated miners and their whims, the fork has been looming over bitcoin for some time now, which is the only thing that seems to give any value to the other cryptocurrencies as if it forks it means a potential foothold for other services to get in.
Cryptocurrencies are a real mess, and for a awhile there, the fad was to attach a new cryptocurrency to whatever service you wanted to try and be "the next big thing", and it's always been ridiculous.
The idea of a decentralized currency isn't bad in and of itself, but there is a lot to laugh at in the current history of cryptocurrencies.
A real hacker would recognize these are the early days of a new technology with incredible potential. Its tech is disruptive enough to already grow a marketcap measured in billions, I don't know what is gained from harping on all the early failures.
The distributed ledger isn't what people are making fun of - it's the frantic rush and chaos around using it that is ridiculed, and in many cases, rightfully so.
Edited additional thought: Come to think of it, I don't think a lot of the new found SV culture is really as hackerish as it's made out to be - it's the same business stuff that cyberpunks in stories would snub their noses at and work to undermine, except it's masquerading as hacker culture - there's a very cool protocol underneath bit coin that probably will fundamentally change how we do "something" in the future. But what is everyone climbing over themselves about with Bitcoin? Get-rich-quick after get-rich-quick schemes and ridiculous business enterprises.
Silk road I got - buy whatever with crypto-currency, hard to trace, from hard to find sites on TOR, and a package arrives or a service is done. Cool! But that's not what the clamoring is about now, and it hasn't been for ages.
That's not a hackerish interest, that's business people playing with yet another asset to trade.
Avoiding them in the future, perhaps? I wouldn't mock a mature technology for historical teething issues, that's pointless. But cryptocurrencies keep replaying the same errors and conflicts without seeming to learn a thing. I like the idea of cryptocurrency, but it's not going to succeed unless we learn from the (myriad, severe) mistakes of the past.
Ethereum seems like a good reminder of this. It has an air of being less seedy and more 'professional' than Bitcoin, with actually-pretty-cool "smart contract" tech. But... the first big project was the DAO, and we all know how that turned out. Robbery and a hard fork. And now the Gnosis auction just hit, and that went terribly and exactly counter to predictions about a "rational market".
Despite any philosophical argument, the actual history of cryptocurrencies is pretty ludicrous so far.
True, many crypto currencies are rapidly increasing in value (because of built in scarcity effects, and investor interest). But that very speculative attractiveness makes them quite unsuited as currency (because their value is unstable and generally deflationary). So you're left with a "commodity" that is unsuitable for anything but speculation. Those kinds of stories usually don't tend to end well.
That is valuable to me and a lot of other people. Until that time comes, I'm happy to embrace the risk of early adoption and the many thousands of dollars it's made for me already.
I'm sorry, but so fucking what? MLM was a $178 billion industry in 2013 and it has been growing. This doesn't make it Not A Scam.
"X billion dollars can't be wrong" is also a dead horse. Appeal to authority and wealth is a terrible argument.
Yeah, I didn't think so either.