Economist slams bitcoin as ‘mother of all scams’

Discussion in 'Digital Currencies' started by ozcopper, Oct 16, 2018.

  1. Ag

    Ag Well-Known Member Silver Stacker

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    Shiney, yes agree there is lots of possibilities for cryptos where a distributed ledger is required as per 'Blockchain, Hashgraph (and what ever else gets developed) are amazing concepts/technology which won't go away any time soon'

    Yes, meant something physically backed as per the gold standard before fiat (again could be a basket of resources and not just metals). I see your point 'not really much poiint in a physically backed crypto' but a distributed ledger where multiple countries can verify each others physical/resources holdings might work? least I feel it would work better than completely unbacked crypto currency effectively controlled by miners (who will become the new centralisation authority)
     
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  2. dozerz

    dozerz Well-Known Member Silver Stacker

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    backed by nothing? this statement alone shows a complete lack of understanding. its backed by encryption and immutability. banks are terrified in that bitcoin adoption means they will lose the ability to just print money from nothing.

    not sure it will be a choice, they will definitely fight it but bitcoin has already consumed the bolivar by adoption over the government backed currency, its just a matter of time.
     
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  3. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    @Ag, miners aren’t really anything like a centralised authority.
     
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  4. Ag

    Ag Well-Known Member Silver Stacker

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    Dozerz - I respect your opinion but perhaps I don't see the same value in 'encryption and immutability' as you might? Yes it has some value but $20K to $50K as some crypto holders believe? Agree 'banks are terrified in that bitcoin adoption means they will lose the ability to just print money from nothing' which is the same reason I can't see them ever being mainstream use. Central banks/goverments will fight tooth and nail to never allow it. Yes Bolivar was adopted using the same blockchain but they didn't swap directly to bitcoin (as was suggested to me by other external forum crypto users and one reason why bitcoin will go multiple fold in value)

    Shiney - ok bad choice of words with 'centralised authority', but they are centralised in as far as they share a common function (mining) and do preform a authority by verifying transactions. I can see bitcoin can't scale to any practical real world use having days delay in transactions or pay a fee (eg $100) to be processed quicker...and before someone chimes in with atomic swaps, this at best will bandaid a system which hits the next bottleneck.

    Do see more emerging currencies like the Bolivar move to a crypto based payment but don't think any of the current coins/tokens will get a boost in dollar value
     
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  5. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    Why would that boost other Crypto coins?
     
  6. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Ag, Government could adopt and use many crypto technologies without them being a threat to its monopoly on the abuse of power. :p

    Smart contracts for dealing with payment systems, public ledgers of property for title deeds, security protocols with wireless technologies eg using IOTA or Atonomi and even blockchain elections that solve fraud and enhance democratisation of opportunities using Horizon State are just some examples.

    The miners are decentralised authorities. :)
     
  7. dozerz

    dozerz Well-Known Member Silver Stacker

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    what kind of value do you put on fake news? or that your money will but less in 10 years time? i find it amazing people do not trust crypto yet put faith in paper money and the government. crypto gives you the ability to prove that something isnt fake.

    crypto is not backed by rules but laws of mathematics, i can always prove i have one bitcoin and it can never be taken from me, how much would that be worth to you?
     
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  8. SlyGuy

    SlyGuy Active Member

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    Nothing... absolutely nothing for any length of time. In the ultra-short term, I would logically offer roughly 25% of whatever BTC is trading at (since it could drop that much or more by the time I could dump it).

    ...More bitcoin is created every day. It is "not backed by rules but laws of mathematics"? Give me a break. Humans designed and control the supply, so crypto supply is potentially unlimited if you simply tweak the math or make up a new crypto (ie, original Bitcoin... and then they added Bitcoin cash and Bitcoin gold to make more money on the exchanges). Bitcoin can also be wiped out and stolen from accounts and banks... it can be "taken from me" similar to government money that is in digital accounts or paper.

    In the end, Bitcoin (or any crypto) has all of the same problems as govt money sitting in a PayPal account or pre-loaded Visa card. However, Bitcoin also much less purchasing power stability and much fewer merchants who accept it. It is sort of like a Discover credit card (accepted at few places) that has its value linked to a jumpy tech startup stock (goes up and down... but after awhile, mostly down down down). You can't use that volatile credit card to pay most of your bills or at most places you want to eat or shop. So, who would choose that crappy stability and liquidity over a more stable and accepted alternative? Greedy people... or risk investors playing the greater fool theory, that's who.

    In the end, if you think you have something good in crypto, then enjoy it. If it's so good, you don't have to justify it to yourself or anyone else. It will sell itself (and conversely, if it sucks, it will crash itself).
    Maybe this is the part of the show where I should tout and explain the many merits of the new company stocks I bought today? Nah... the market prices will do that for me ;)
     
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  9. dozerz

    dozerz Well-Known Member Silver Stacker

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    seems like you are wrong on a few counts but im not going to bother to go into detail on a silver forum. bitcoin as about the closest we have to sound money with its price being only one aspect.

    yes it will continue to eat currency, as it has with the bolivar and zimbabwe dollar, regardless of what is said on internet forums.
     
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  10. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    That’s okay, if crypto and blockchain are so bad, you don’t have to justify it to yourself or anyone else.

    We understand.
     
  11. Ag

    Ag Well-Known Member Silver Stacker

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    IPv6 - seems whenever bitcoin moves, the Alt coins follows, (be it up or down). My thoughts on government crypto's is they wouldn't follow the same pattern. If they did then would be a nightmare for users when trying to pay for every day items (i.e unstable value/purchasing power). I'm guessing it would be more like USDC/Tether based on a unit of national currency and would need a 'stable' value (though might strengthen/weaken like AUD/US over a period of time). If it wasn't backed, then the crypto tokens are not much better than the fiat paper (other than having an accountable distributive ledger)

    Shiney - agree governments could use crypto tech for numerous reasons but likely wouldn't IMHO (as being one more step closer towards impacting the 'monopoly on the abuse of power' you mention)

    I still stand by my comment 'Blockchain, Hashgraph (and what ever else gets developed) are amazing concepts/technology which won't go away any time soon' but can't see it being useful without having it backed like a gold standard or equivalent.

    Looking at the charts for various crypto's, it looks pretty much a 'pump and dump', perhaps central banks/goverments are suppressing the price, and burning the fingers of investors to keep new interest away. For the few investors I do know in the crypto space, majority are down substantial from their initial investments and are 'holding' to break even
     
  12. willrocks

    willrocks Well-Known Member Silver Stacker

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    That won't happen any time soon. It's cumbersome, and requires trust in whoever holds the gold.
     
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  13. SlyGuy

    SlyGuy Active Member

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    This is very ill-advised (for any investment).

    Holding a loser is especially poor strategy with something that has high variance, does not pay dividends, has unknown fundamental value, and doesn't have much history of performance. If you are down a bit on a Dow stock yielding 5% dividends and with strong core business model and earnings, that is one thing, but this is totally different. Since BitCoin has no core fundamentals or earnings, the only way for BTC to move up is for substantial new money to come into the market... but most of the big sharks already swooped in, took their bites, and left everyone who didn't get out by now maimed. Those sharks aren't coming back. The best you could possibly hope for is that some of them do another smaller scale pump and dump, but that is very unlikely since it will be much, much more risky for them than the first go-round.

    As with any bubble, after awhile, people realize that with these speculative and risky investments, they just need to stop the bleeding and be done with it. Remember, "it has gone down so much that it can't possibly go down anymore" is always false. Until something is at $0, it can definitely go down. Learn the lesson and move on. Assuming you're not the last guy holding crypto shares to figure out that party's over, you might still have some decent funds to start in a more legit market. GL
     
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  14. dozerz

    dozerz Well-Known Member Silver Stacker

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    growing tired of the "unknown fundamental value, much history of performance, or fundamentals or earnings", all completely untrue statements.

    anyone who invested pre december 2017, so over 12 months ago is almost certainly up in their investment by a significant amount.

    please take no crypto advice from @SlyGuy tracking any investment over less than a 12 month period is just cherry picking and shows a complete lack of understanding of the market.
     
  15. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    @SlyGuy , you do realise that some crypto’s pay a dividend?

    Maybe you should do some better research before delving into a topic you clearly have only a limited amount of knowledge in.
     
  16. Ag

    Ag Well-Known Member Silver Stacker

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    SlyGuy - agree it is a poor strategy. Have certainly picked lemon stocks and sold at a loss to limit further declines but just mentioned an mentality of those 'few' crypto investors I do know. To be fair, most weren't 'sophisticated investors' (meaning they are not familiar in reading balance sheets, buying stocks or investing) so were really only having a punt. As a result, they see holding as the best strategy to not accept any dollar loss.

    Dozer - your right, with any purchase pre December 2017, an investor would be well up, but think this is only for a smaller percentage of the crypto community. Many new crypto buyers came in during the run up, beliveing in a new pricing of $50k/$100k per coin. I would expect pre December 2017 crypto buyers would be disappointed to have not sold out and brought the dip since. Agreed, 12 months doesn't set a price or market for anything, but neither does cherry picking a few month move up to ~$20k as evidence of future highs. I do wish you well with whatever investment you choose and only sharing my perspective towards this market so members have a full story

    Shiney - no I didn't know some pay a dividend...please don't be referring to the 'iCenter' scam! LOL
     
    Last edited: Oct 25, 2018
  17. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Ag, I haven’t heard of iCenter lol. Should I?

    Just a couple of examples, NEO pays a dividend in the form of GAS tokens, NAV pays about 4% on total coins staked.
     
  18. dozerz

    dozerz Well-Known Member Silver Stacker

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    again huge assumption, go take a look at the forum posts pre november2017, there was a lot of activity before then. yes speculators piled in as price rose but thats not a refection of the crypto community. of course many missed selling the top and buying the bottom, but who does that in any market? again not crypto specific.

    i dont mind if you think its going to zero or has no future but lets get some facts correct before spreading more misinformation.
     
  19. SlyGuy

    SlyGuy Active Member

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    Ok. Please enlighten me...

    Fundamental value: What is the fundamental value of BitCoin based on?
    ...for WalMart or Nestle or Ford Motor, fundamental value is based on their assets (real estate, merchandise, patents, sales contracts, etc etc etc) and their cost of replacement of the physical assets at today's prices (for their factories, inventory, stores, trucks, ownership of smaller companies, etc). For the Chinese Yuan or the Swiss Franc, their value correlates to the issuing country's GDP, currency supply level, country's bank and bond market, and general world sentiment of that currency.

    History of performance: What is BitCoin's history of performance?
    ...for McDonalds or a US Treasury bond, I can easily track their historical dividend payments, their historical sale value per share. I can compare it against other similar stocks or bonds, and I can compare the graphs and historical yields to the entire market. For crypto, I don't see much.

    Fundamentals and earnings: What is BitCoin's earning ability?
    ...for Proctor & Gamble or Dell computers or Tesla, a diverse line of products are developed, and quarterly company earnings are readily available (published publicly and presented in tax forms). You can look at factors like their P/E ratio compared with peer competitor companies, view expert analysis of business operations and estimated future profitability, and compare recent performance to historical earnings.

    ...BitCoin and other crypto has no product or underlying assets. It makes no sales or profits. It isn't linked to any country or any entity's production or economy. It has no logical outlook since it is all based on hype and supply and demand. But again, feel free to explain and detail its fundamental value, history of performance, and earnings. Pretend that I am a potential investor :)
     
    Last edited: Oct 25, 2018
  20. SlyGuy

    SlyGuy Active Member

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    Lol. Better research on crypto? Well, maybe I can get enlightened in the post above. Honestly, I would avoid any crypto with dividend the most. That makes no sense and is a huge red flag of scamming to generate more investment monies. What is their history of cash dividend payments, if I may ask? Have they paid up every quarterly period for years and kept the rate steady or climbing? (oh, riiight... the whole longevity thing)

    If I were selling something new and trying to attract investors, it's fine to offer a dividend in order to make it look like a real investment piece. For anyone who understands investing, it would make no sense for a currency or a small startup tech (crypto are one or both of those) to have a cash dividend. Dividends are for mature companies that are stable with good profits yet little growth potential. But again, those logical points don't matter when I'm merely trying to sell something new by pulling smoke and mirrors to attract novice investors and speculator money.

    ...Google "dividend aristocrats" and view dozens of major company stocks who have paid same or better stock dividends for 25 years or more. Any stock can offer dividend, but to pay it regularly and faithfully despite good/bad economy and good/poor sales quarters and expansion/restructure is the real test. For the real quality companies which have capital reserves and quality products led by good management, they will be able to do it year after year. On the other hand, cutting a dividend is always a sign that a company is in rough shape or needs cash for some reason... never good.

    You will see any crypto with a dividend cut it smaller and smaller as the share price collapses. With no ability to generate earnings and lack of new money coming in, they have no other choice. Please show me any small startup tech company or any world currency that has a dividend. The currency doesn't have one since it doesn't generate earnings, and the small companies are re-investing any of their extra monies into growth. Again, dividends are typically for moderate to very mature companies (utilities, national brands, real estate trusts, bonds, etc) with steady profits yet little room for any more growth. The "dividend" for any crypto is a just a sales gimmick to begin with.

    Wait wait wait... they pay a "dividend" in the form of more crypto? Not a cash dividend???

    You have to be kidding me.

    [​IMG]
     
    Last edited: Oct 25, 2018

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