Which is what they are doing now.
With Blockchains, they are more stable, as there is no such guarantee. Many people choose to HODL instead, and this gives the coin some stability. As long as there is less interest in cashing out than people trying to cash in, the value is growing. And as long as the value is growing, people cash out.
For a Ponzi scheme with guarantees in terms of currencies not minted by the scheme creator, they are bound to collapse sooner or later. Blockchains could go on forever in theory. However, latter still requires more people to cash in than people to cash out. If there is enough people trying to cash out, maybe larger number of people will panic and cash out as well, leading to an avalanche like race to zero.
Both are united by the requirement for a "greater fool", just with Ponzi schemes, this greater fool is exponentially growing while with Blockchains it can grow linearly.
All it matters that it will stay more stable than other assets. And we know from economic history that assets tied to nations may disappear overnight, e.g. Cyprus.
Towing such big asteroid sounds very risky (for the stability of our own planet and of the moon) and expensive, way more than just sending robots.
A Ponzi scheme typically involves a small inner circle perpetuating a fraud; even if "everyone knows" it's hinkey, it is ostensibly returning fabulous returns through actual investment/economic activity. Eventually, the insiders stop being able to keep the game going, and go bankrupt, get arrested, flee the country, or some other ignoble end.
Crypto has lost its layer of fraud; it used to be "this thing will be the future of money and therefore have value", but for the last five+ years it's all just been "this will be worth more in the future because people will buy it so you should buy it," a naked Ponzi.
Meanwhile, it is distributed, even if it is highly centralized at every point from mining pools to exchanges. There's no single person who has to go to jail or disappear with his money to collapse the whole system. It's happened dozens of times, and every time it does a new set of criminals steps up to keep the fraud going.
In summary, even if individual enterprises (eg, FTX) are classic Ponzi schemes, crypto as a whole deserves to be the name of its own type of scam.
It is also different than a casino: "Even if crypto investing is considered gambling, there is a factor not present in traditional casino games: the time variable of holding. Holding roulette chips has no effect on their value, while in crypto markets, prices change in time. By holding crypto assets for a longer duration, investors can potentially benefit from market fluctuations and price appreciation, making it a unique aspect compared to classic gambling games." [1].
[1] https://www.coinfabrik.com/blog/the-science-of-crypto-asset-...
If for whatever reason, something my go up in price because there's demand for it despite widely available and mostly correct information about its utility or lack of it, that's not a scam. This is the case with bitcoin. It's growth has fueled interest in a bit of gambling by members of the public about possible future growth. There's no central party running it as something it isn't or perpetuating a core lie by hiding some key information about what bitcoin really is.
People insisting on buying something despite it having an unstable market value and debatable concrete utility doesn't make that thing fraudulent. A scam requires intent and misdirection, regardless of how you and others who share your view try to redefine the word scam arbitrarily. You might as well also call all forms of speculation a scam by the same ridículous logic.
When people buy bonds, stocks, commodities, or purchase a car, a house, or even an Xbox, they are taking into account the resale value of that asset. If you supposed that when you're done with your house, it would be worth $0, you would be willing to pay a lot less for it. There's nothing fundamentally different here wrt Bitcoin.
The other examples you mentioned generally have some significant additionally value beyond just resale value -- e.g. stocks pay dividends or are expected to at some point, a house is something you can live in or get an income from by renting it out, and so on.
To be clear, there’s speculation involved in buying stocks, too, to an extent (particularly buying _individual_ stocks), but ultimately you have a share of some real thing. That is not the case with bitcoin.
Sure, there's some value there, you can use it to make gold-plated contacts or shiny things, but if that was the only use case, it wouldn't be nearly as valuable as it is now.
Gold is valuable because people think it is valuable, and the same hodls true for Bitcoin.
You also shouldn’t buy gold; over any long period it is almost guaranteed to massively underperform the markets. If you had bought gold at its 1980s peak, you would have been down in real terms ever since; adjusted for inflation it has never reached that value since, and may never do. While you can say that about some individual _companies_, of course, you would be hard pressed to find a major index for which that is the case.
Oil and real estate are totally different, though investment in oil in particular _is_ rather speculative; you’re betting on future real demand, but that demand is at least, like, _real_; there are obligate buyers of oil, almost no matter how high the price goes. Real estate, as I previously mentioned, produces value in terms of either rent or not having to pay rent.
The Nikkei 225 comes to mind. It only broke its 1989 peak last year.
The creators of small memecoins often are doing this, deliberately, of course. Some of them are amazingly open about this, often marketing their memecoins as, essentially, “it’s still early” (ie you, the buyer, get to get in before the scheme collapses; like early Madoff customers, you can be one of the lucky ones!).
Even without my cynical opinion, Vanguard doesn’t have a heavy commodity focus, and it’s hard to diversify crypto.
But if you’re going to hypothesize things out of thin air, you can give them literally any property you want. That’s hardly interesting.
The greater fool theory argues that prices go up because people are able to sell overpriced securities to a "greater fool," whether or not they are overvalued. That is, of course, until there are no greater fools left. [0]
Crypto technology had potential, but those involved never resolved the critical usability and security issues, and just went straight for killing the golden goose — get the money now and nevermind whether it ever becomes anything. Those now pushing for a "US Strategic Bitcoin Reserve" are attempting to cash out making the rest of the US taxpayers the last Greater Fools, and leave them holding the steaming bag...
[0] https://www.investopedia.com/terms/g/greaterfooltheory.asp
Don't you mean "All money that has even been invested into Bitcoin - total cost of mining = all money that investors will ever get back"
Cost of mining has left the system. "Investors" will never get it back.
Since they can be transferred, it's analogous to saying that the amount of value produced by Visa is equal to negative one times Visa's revenue.
(A typical form of blockchain apologia is that blockchains also do this. This is true only if you ignore the social and regulatory structure that allows companies and individuals to treat banks as mostly interchangeable assets.)
There are some real economic benefits to Bitcoin as well, but I don't believe they justify the valuation though that's neither here nor there.
Thanks to fractional reserve banking (i.e. institutionalized fraud), they also create new money along the way (i.e. debase the existing currency).
Thus, the amount they're skimming off is even more than one would originally think, since they're charging interest on something they didn't entirely have in the first place (second-order fraud).
That is quite the service being provided. How fortunate we all are!
I think so.
As someone who makes things, they solve a really important chicken-and-egg problem for me.
i.e. Where does the money needed to make a thing come from before you make it so that you can sell it and make money from selling the thing?
I suppose technically I could risk my money, assuming I have some. But I'd much rather risk the bank's, and I understand that they will charge me for that.
Bitcoin proponents always talk about how it has the potential to do x, y, and z. Okay so do it already.
It's responsible for facilitating a ton of fantastic trips amongst myself and friends.
We had extra money. There were some people on the Netherlands with some extra lsd. We swapped using Bitcoin. Value was created.
That said, I would wager enormous sums of money that on net, they have been dramatically negative. Once you factor in the vast quantities of energy wasted (even using up energy that would have otherwise gone to waste simply decreases the demand for batteries or competitiveness of other marginal-value uses) and all the funding of crime such as theft, fraud, hitmen, blackmail, money laundering, scams, and so on it’s very hard to see “I was able to get LSD” as compelling.
And I love LSD.
I don't want to make any moral statement here. I'm just saying that Bitcoin can be positive sum or negative sum. I don't know which is true and I don't know whether it's better or worse for humanity to have a global mechanism for unregulated money transfers. But that's what we have.
As a result of that financial crisis, real estate is somewhat heavily regulated in most countries, and exotic financial instruments based on real estate (which you’d need to make this work) are treated with suspicion. Probably not the most fertile ground for the aspiring scammer.
Gold as a store of capital isn’t accessible to a lot of people, though, because it is easy to steal and thus hard to store. So instead, I can buy a gold ETF.
It does make sense that Vanguard doesn’t have a Bitcoin ETF, though: they don’t have a gold ETF either, for the same reason
So, if I were to print bitcoin keys on firewood and sell that, would it become a “good investment” in your mind?
That’s basically what gold is. A commodity with some limited material value, whose price has become completely detached from that value due to its use as a financial instrument.
Economic value is whatever people are willing to pay for, and I do mean "pay for," not "invest in." If you want to use applications on the Ethereum network, you have to pay ETH to do it and the ETH gets burned. As long as people keep doing that, the economic value is demonstrably there. Whether that equates to any other kind of value at this point, I won't try to argue, but for significant periods after proof-of-stake rolled out, ETH has had a P/E comparable to some high-growth stocks. This does not apply to Bitcoin, which doesn't have the burn mechanism or much in the way of applications.
ETH and BTC are the two cryptocurrencies with ETFs available. It's unfortunate that even now, so many investment professionals don't understand their differences.
For the burn to be so extreme, the demand for transaction space would have to be much greater than the space available. Since they're also making large improvements to scaling, with the roadmap going to millions of transactions per second and the hardest parts already done, that also seems unlikely.
As for the infamous fork, that happened in Ethereum's first year and it didn't change the ETH supply. Nothing like it has happened in the nine years since. Bitcoin forked when it was eighteen months old, and that actually did change the Bitcoin supply.
i would expect this kind of technical ignorance from the news or my mom but not "hackernews". there is real value in exchanging value/currency P2P globally relatively quickly and cheap. you know "internet money" people dreamed about decades ago...
The overwhelming majority of users are holding it as an asset. Which it’s also poorly suited for in the long run: it generates nothing in and of itself and requires constant feeding of money and energy to keep it going. The only way to see a return is to trade it to a greater fool.
Yes. The size of the money-laundering, exchange control evasion, and tax evasion industry was way underestimated.
What surprised me is that after China banned cryptocurrencies in 2021 [1], the price didn't drop.
Outside of Bitcoin and Ethereum, almost everything in crypto eventually tanks. The entire NFT market has tanked. Even the big names, such as BAYC, are down. BAYC is down 80% since launch. In memecoin land, "eventually" can be measured in days. Check out TRUMP.
Even Ethereum peaked back in 2021. Bitcoin has had 75% drops. If you bought and held anything other than BTC, you're probably under water now.
Then there are the constant collapses and "rug pulls".[2] US$76 billion total so far.
There is some value for those without access to stable currencies in their home country, but that use case is absolutely dwarfed by the other use cases out there at the moment. Perhaps this will change if the US goes through an economic collapse due to bad tariffs or something.
Compared to what?
Let’s say your goal is to get some wealth out of Tibet into India.
Is it “quick and easy” to do that with dollars? Or Yuan? How about gold bricks? Maybe goats?
I’m not sure what the Chinese authorities at the border would have to say about those things.
With Bitcoin you can memorize a phrase like “witch collapse practice feed shame open despair creek road again ice least” and with that information in your brain you can move any amount of money anywhere your brain can go.
That is one _utility_ of Bitcoin. Just like one _utility_ of a dollar bill is I can put it in a Coke machine.
The first thing that many governments will do when a protest of any kind starts becoming too effective is to make it a crime to participate or support the protest. I think we should all keep this scenario in mind when discussing what the future of our financial system should look like.
It's foolish to gloss over the word "crime" like it only describes human trafficking and international drug trade, especially with everything going on in the US. What was "going to the doctor" yesterday could be "committing a crime" tomorrow.