Cryptocurrency may be a scam after all

[supreme1alpha1]

they use reserves and assets. if you can recall LEO, the coin that the company that owns USDT. they were outed as not having the reserves etc. so they released their LEO coin and raised a few hundred million in a few days. i believe PAX is backed by gold. . space is still new but scam it is not. its the future my friends .
stay down and you all will come up.

 

[najo10]

That's why I never invested alt crypto. BTC is monopoly, what non-business don't understand.

It can't be a monopoly when it is decentralized. There is no top to the bitcoin pyramid. It is not a single entity. It is every user/owner of bitcoin and the demand they put on it by utilizing it.

 

[najo10]

If you've read my posts here you probably know I always rebuked threads claiming crypto was a scam.

Like I mentioned a couple days ago, I've been reading a few Twitter feeds and I'm beginning to convince myself crypto could turn out to be one of the greatest scams ever.

You people aware that almost all bitcoin traded every day isn't using dollars? You guys know that almost every exchange is creating their own version of "dollars"?

The stuff we see "x dollars" aren't dollars at all. I initially thought this was crazy, but it's true. It's made-up dollars. Unbelievable.

Bitcoin is not tied to anything other than its blockchain and the wallets of its users. What gives bitcoin value is people utilizing it as a representation of their money. Here is a simplified model:

1. the blockchain code has all the bitcoin mined bitcoin. Bitcoin that is being mined is being acquired by miners. There is an initial value of time, electricity and technology. This starts the value of bitcoin.

2. Bitcoin is sold by miners to other bitcoin users. This establishes a market price.

3. Because bitcoin is decentralized and it checks all wallet balances with at least three independent keys on the blockchain, there is no way to manipulate or directly hack the ledgers and balances across the entire blockchain. This is a security measure that allows bitcoin to be constantly checked by all its users, essentially.

4. So there is no overriding authority or banking entity, there is no independent bookkeeping or ledger, and all adjustments are being handled publicly between three or more separate users who are kept hidden from one another and are essentially picked at random. That ledger checking eventually makes its way through the entire blockchain and overwrites anything not verifiable - it does this constantly, which is why it sometimes takes a while for bitcoin purchases to go through.

Ironically, bitcoin is more secure than most countries' own currencies. It's also a genie that is impossible to put back in the bottle. You would have to wipe out all computers utilizing the bitcoin and the entire global network they share to get rid of bitcoin.

Its value then is basically supply and demand. Which since there is a limited amount of bitcoin that the blockchain can be mined up too, it inherently becomes more valuable over time as long as it is used. Since bitcoin can be sliced up into any decimal amount of shares, it can represent any amount of currency.

The power of math and the free market, there you go.

 

[JetBlack101]

Probably depends on your definition of scam. Life is not what I thought I was buying when I became an adult. Is life a scam? In my book -- hells to the yes.
So, yah, agreed. Crypto probs is a scam to some and a jackpot to some and a whatever to others.

 

[bartosimpsonio]

Bitcoin is not tied to anything other than its blockchain and the wallets of its users. What gives bitcoin value is people utilizing it as a representation of their money. Here is a simplified model:

1. the blockchain code has all the bitcoin mined bitcoin. Bitcoin that is being mined is being acquired by miners. There is an initial value of time, electricity and technology. This starts the value of bitcoin.

2. Bitcoin is sold by miners to other bitcoin users. This establishes a market price.

3. Because bitcoin is decentralized and it checks all wallet balances with at least three independent keys on the blockchain, there is no way to manipulate or directly hack the ledgers and balances across the entire blockchain. This is a security measure that allows bitcoin to be constantly checked by all its users, essentially.

4. So there is no overriding authority or banking entity, there is no independent bookkeeping or ledger, and all adjustments are being handled publicly between three or more separate users who are kept hidden from one another and are essentially picked at random. That ledger checking eventually makes its way through the entire blockchain and overwrites anything not verifiable - it does this constantly, which is why it sometimes takes a while for bitcoin purchases to go through.

Ironically, bitcoin is more secure than most countries' own currencies. It's also a genie that is impossible to put back in the bottle. You would have to wipe out all computers utilizing the bitcoin and the entire global network they share to get rid of bitcoin.

Its value then is basically supply and demand. Which since there is a limited amount of bitcoin that the blockchain can be mined up too, it inherently becomes more valuable over time as long as it is used. Since bitcoin can be sliced up into any decimal amount of shares, it can represent any amount of currency.

The power of math and the free market, there you go.

Nice post. I won't try to counter most your points. Just a couple of scenarios though:

What if countries turn off the electricity for miners or forbid Bitcoin, making it illegal to trade for cash?

 

[iggyTheDog]

Bitcoin is not tied to anything other than its blockchain and the wallets of its users. What gives bitcoin value is people utilizing it as a representation of their money. Here is a simplified model[...]

Great simplified explanation mate!

Nice post. I won't try to counter most your points. Just a couple of scenarios though:

What if countries turn off the electricity for miners or forbid Bitcoin, making it illegal to trade for cash?

These scenarios would make really dumb movies.

If cutting off electricity for miners would be a solution, or even possible, why don't the goverments turn off electricty for black hat hackers? I think you don't understand very well how electricity, the internet and goverments work.

As for making something illegal to trade with cash, that's even dumber, it would only raise the price of bitcoin more. Trading cash for drugs is illegal, that's why morphine costs pennies if you have a prescription but it costs a lot of $ in the streets

 

[bartosimpsonio]

Great simplified explanation mate!


These scenarios would make really dumb movies.

If cutting off electricity for miners would be a solution, or even possible, why don't the goverments turn off electricty for black hat hackers? I think you don't understand very well how electricity, the internet and goverments work.

As for making something illegal to trade with cash, that's even dumber, it would only raise the price of bitcoin more. Trading cash for drugs is illegal, that's why morphine costs pennies if you have a prescription but it costs a lot of $ in the streets

Because black hatters don't threaten the country's currency. If they did, government would turn their power off.

As for making something illegal to trade with cash there are so many examples of that I'll leave it to you to think it over.

 

[iggyTheDog]

Because black hatters don't threaten the country's currency. If they did, government would turn their power off.

As for making something illegal to trade with cash there are so many examples of that I'll leave it to you to think it over.

You are talking nonesense man. Logical fallacy after logical fallacy.

There is no practical way for a goverment of turning the power off to a selected group of people. Let alone all goverments together. If there is please share it with us. When you make a claim you need to provide the evidence for it, it doesn't work the other way around. Look up "teapot in space" ffs.

BESIDES as i said before, noone mines in their home. Just like no black hat hacker hacks from their home connection.

As I said there are examples, yes. Like drugs. And their prices have skyrocketed more. That's how economy works you know. Bitcoin's value is inherent into it, its not just a trading asset. So even if a goverment said it's illegal to trade bitcoins to $ for example Bitcoins would STILL have value because they serve a purpose of their own. Unlike regular money and just like burgers, computers, screwdrivers, drugs, toothpicks, cars, hadguns, barbie dolls, buttplugs, oil and books to name a few diverse examples.Their value would only be bigger, since they would be illegal. Of course there is no global goverment so that's one more nonesense arguments, all goverments should come together and ban bitcoin. That has never happened in history ever with any single thing. Proove me wrong. (PROTIP: you can't)

 

[najo10]

Nice post. I won't try to counter most your points. Just a couple of scenarios though:

What if countries turn off the electricity for miners or forbid Bitcoin, making it illegal to trade for cash?

If a country were able to target miners directly, the miners are going to be able to find work arounds. Electricity cut off, use alternative source of energy or find a way to mask your mining. Black Hat Hackers already do this by mining through other people's pcs through bots and viruses that are scattered across any number of websites, files or other executables that people trigger without even realizing it. Even a grey hat hacker could run a generator for power, then mask and reroute through proxies, VPNs and virtual OS on flash. Miners who know what they are doing can hide easily.

This goes for trading and using bitcoin too. Sanctions, tariffs and other taxes only work if you can monitor and contain the transactions across the entire network. Bitcoin would have to be banned or penalized in every single marketplace across the modern world. Even then, it returns to being used by the tech-savvy people in black markets and waits to resurface. But since everyday people are using it and it has appreciative value the more it is used, bitcoin will put external pressure on countries to utilize it. They will find it easier to get a small fee off of transactions and transfers of currency in and out of bitcoin than to come down hard on it and get nothing. That external pressure means its a win/win for countries to integrate it into their financial systems. Easier to go with the flow than fight it.

So, let's say even 30% of the western world's countries allow it and start asking for it, how long until more of their trading partners join them? Then once a large power mainstreams it to get a boost in marketplace positioning? Bitcoin is very unlikely to be going away or be banned.

 

[Rosca]

I really like the concept of cryptocurrency and blockchain technology, as it is very revolutionary and might be able to shape the future of how we process payments. But, I do believe like ya said there's some issues behind it.

I see so much news about crypto exchanges like Mt.Gox, etc getting fucked over due to a hack. It's a great financial direction to the future, but I feel like cryptocurrency is going to have to go through a lot more changes and such before it can be actually safe to use for the average person.

 

[arlind-]

I really like the concept of cryptocurrency and blockchain technology, as it is very revolutionary and might be able to shape the future of how we process payments. But, I do believe like ya said there's some issues behind it.

I see so much news about crypto exchanges like Mt.Gox, etc getting fucked over due to a hack. It's a great financial direction to the future, but I feel like cryptocurrency is going to have to go through a lot more changes and such before it can be actually safe to use for the average person.

You still stuck in 2014?

 

[redjebo]

You are talking nonesense man. Logical fallacy after logical fallacy.

There is no practical way for a goverment of turning the power off to a selected group of people. Let alone all goverments together. If there is please share it with us. When you make a claim you need to provide the evidence for it, it doesn't work the other way around. Look up "teapot in space" ffs.

BESIDES as i said before, noone mines in their home. Just like no black hat hacker hacks from their home connection.

As I said there are examples, yes. Like drugs. And their prices have skyrocketed more. That's how economy works you know. Bitcoin's value is inherent into it, its not just a trading asset. So even if a goverment said it's illegal to trade bitcoins to $ for example Bitcoins would STILL have value because they serve a purpose of their own. Unlike regular money and just like burgers, computers, screwdrivers, drugs, toothpicks, cars, hadguns, barbie dolls, buttplugs, oil and books to name a few diverse examples.Their value would only be bigger, since they would be illegal. Of course there is no global goverment so that's one more nonesense arguments, all goverments should come together and ban bitcoin. That has never happened in history ever with any single thing. Proove me wrong. (PROTIP: you can't)

Many things are banned internationally without the need of international government, just common sense. Nuclear weapons and resources are not allowed to be owned or operated by common citizens worldwide for one example. Nor even lesser rated but still military class weapons such as bazookas etc.
Possession, stocking and distribution of hard drugs is another world wide banned activities. Etc.

If a government decides bitcoin is a threat to their national currency and thus national security and imposes a ban on it it's all over for btc users in that country. The penalty that the crime of owning or operating it will naturally be severe enough to match the severity of the crime against the state.

And if you think btc enthusiasts and lambo wannabies are even remotely comparable in terms of determination and risk tolerance to hardened drug dealers or international terrorists you are being beyond delusional. A ban by law will mean the end of it, especially after several lambo wannabies go in jail for 20.

 

[najo10]

Many things are banned internationally without the need of international government, just common sense. Nuclear weapons and resources are not allowed to be owned or operated by common citizens worldwide for one example. Nor even lesser rated but still military class weapons such as bazookas etc.
Possession, stocking and distribution of hard drugs is another world wide banned activities. Etc.

If a government decides bitcoin is a threat to their national currency and thus national security and imposes a ban on it it's all over for btc users in that country. The penalty that the crime of owning or operating it will naturally be severe enough to match the severity of the crime against the state.

And if you think btc enthusiasts and lambo wannabies are even remotely comparable in terms of determination and risk tolerance to hardened drug dealers or international terrorists you are being beyond delusional. A ban by law will mean the end of it, especially after several lambo wannabies go in jail for 20.

First, there isn't really an international government. There are various peace treaties, alliances and then the UN. The UN is really more of a diplomatic organization with some watchdog elements than having any enforcement capability. The UN cannot violate a nation's sovereignty and it has no real military force. It's more of a peacekeeper.

A government could ban or tax the buying and selling or even owning of bitcoin. But that is literally like wrangling a herd of cats, or whatever. Tracking bitcoin would be much harder to do than tracking digital piracy, and look at what digital piracy did... it created streaming services. The same is likely to happen here, especially since most businesses either want to have their own crypto or crypto-like currency or they want to accept crypto. Instead of trying to go after and prosecute each and every bitcoin owner in every place it was illegal, which technically is no different than any other sale of good or service other than the blockchain encoded in it.

You would have to literally rewrite the rules for capitalism and free markets. Yes, regulation of some sort could happen, but only if bitcoin were a real threat in and of itself.

The irony to all of this is the only reason bitcoin is a threat in some countries is that their currency is no longer being backed by gold or silver. For a country to argue that bitcoin could destabilize the value of its currency, it is only because bitcoin has scarcity and can be broken down into any number of shares.

So, a worldwide ban is highly unlikely. It is laws, peace treaties and alliances that keep the list of contraband items off the international markets. Everything goes through a port of entry and is checked through security, whether physically (borders, docks, and airports) or digitally (digital accounts - i.e. PayPal, banks, etc).

 

[iggyTheDog]

Many things are banned internationally without the need of international government, just common sense. Nuclear weapons and resources are not allowed to be owned or operated by common citizens worldwide for one example. Nor even lesser rated but still military class weapons such as bazookas etc.
Possession, stocking and distribution of hard drugs is another world wide banned activities. Etc.

I love this forum, I have learned so much from it but I feel there are a lot of people that just say their thing without reading what the other person is saying.


Nuclear weapons are not a tradeable asset in the first place. Military class weapons, such as bazookas are indeed banned in most countrys, but in a lot of country, such as in the US, a private company can buy them. So they are not banned, they are just regulated. As for drugs, there is no single drug banned in all countries everywhere.

Still, my point is, using the bazooka for example:


1. Someone invents bazookas
2. My goverment doesn't allow people to buy bazookas.
3. People who want bazookas go in the black market and buy bazookas at insane prices
4. Bazooka prices skyrocket.

If a government decides bitcoin is a threat to their national currency and thus national security and imposes a ban on it it's all over for btc users in that country. The penalty that the crime of owning or operating it will naturally be severe enough to match the severity of the crime against the state.

As I said before all you people claiming that must explain how a goverment can do this practically. PROTIP: it can't. @najo10 explains why far better than I could in his last post.

And if you think btc enthusiasts and lambo wannabies are even remotely comparable in terms of determination and risk tolerance to hardened drug dealers or international terrorists you are being beyond delusional. A ban by law will mean the end of it, especially after several lambo wannabies go in jail for 20.

Again, as I said before, btc enthusiasts are not the driving force of bitcoin, nor are they the ones that give value to it. The value of bitcoin is inherent to it because of they way it is made and the benefits of its use. NOT its trading in markets. Its use. That's why drug dealers, terrorists and other types of criminals ARE using bitcoin, for the safety it provides, not because they are lambo wannabes.

To make an anlogy, its like saying that football exists as a multibillion dollar industry because some people bet on football matches. I believe any sane person would agree that this is prepostorous.

 

[redjebo]

You people are aware of the ban the US had imposed on online poker and the events unfolding on the infamous Black Friday, and the sudden death poker income oriented online casinos suffered as a consequence, right?
What makes you even think if btc does indeed expand enough to represent a threat for the national currency of the US or any other country, said country/alliance will hesitate to and find the correct methods to eliminate such no doubt essential threat?

The practicality of the ban is even boring. Vote a law against it, set severe enough punishment for breaking the law, appoint a government institution to watch for the ban to be efficiently enforced and be done with it. Let's see how many investors or miners will dare put money or mine in an asset knowing that in doing so if caught will face 20 in prison.
In addition, a law for all ISP's to be obliged to filter all crypto coin and blockchain related services and websites might be useful too. Like how some European countries force their ISP's to filter certain online casino websites addresses to limit access to non-licensed casinos for their citizens. You can use vpn but then you come to other obstacles from casinos side etc.

The only way something as ambitious as a global new currency or a digital asset that substitutes gold to become widely adopted and gain traction is if it's approved, regulated and taxed on state level. If not it's dead sooner than later.
And in order to be regulated and taxed bitcoin will have to let go of couple of its core "features" trumpet around - anonymity and independence from institutions.

On a small scale like what we have at current state no one gives much a damn about bitcoin ( the number of wallets is not even implying fractions of the percent of adults in the world have one and the overall marketcap is obviously manipulated to artificially high levels), but if one day powerful people find it starts messing with the state budget in any way or form it's done, simple as that.

 

[GreenAm]

Here to unsettle a few plumes. Dollar itself is a trick. All cash depends on an aggregate hallucination (read fancy) that it has esteem. In that manner bitcoin or whatever else is the equivalent. Peruse Sapiens to comprehend what different dreams your life depends on.

 

[TacticalTechZone]

Tether certainly has some scammy aspects to it, as it's not 100% backed by Fiat, only .74 worth of cash or cash equivalents and then the rest is in "other assets" or loans from third parties..

However, TrueUSD just went through an audit and they are 100% backed by Fiat.

Although there's a much higher circulating supply of Tether in the markets..

I would say simply don't leave your money on any exchange or in tether for too long...but you can still hedge into tether before the market tanks and then buy back at a cheaper price.

 

[iggyTheDog]

You people are aware of the ban the US had imposed on online poker and the events unfolding on the infamous Black Friday, and the sudden death poker income oriented online casinos suffered as a consequence, right?
What makes you even think if btc does indeed expand enough to represent a threat for the national currency of the US or any other country, said country/alliance will hesitate to and find the correct methods to eliminate such no doubt essential threat?

The practicality of the ban is even boring. Vote a law against it, set severe enough punishment for breaking the law, appoint a government institution to watch for the ban to be efficiently enforced and be done with it. Let's see how many investors or miners will dare put money or mine in an asset knowing that in doing so if caught will face 20 in prison.
In addition, a law for all ISP's to be obliged to filter all crypto coin and blockchain related services and websites might be useful too. Like how some European countries force their ISP's to filter certain online casino websites addresses to limit access to non-licensed casinos for their citizens. You can use vpn but then you come to other obstacles from casinos side etc.

The only way something as ambitious as a global new currency or a digital asset that substitutes gold to become widely adopted and gain traction is if it's approved, regulated and taxed on state level. If not it's dead sooner than later.
And in order to be regulated and taxed bitcoin will have to let go of couple of its core "features" trumpet around - anonymity and independence from institutions.

On a small scale like what we have at current state no one gives much a damn about bitcoin ( the number of wallets is not even implying fractions of the percent of adults in the world have one and the overall marketcap is obviously manipulated to artificially high levels), but if one day powerful people find it starts messing with the state budget in any way or form it's done, simple as that.

still not reading or not understanding what you read.

I am not aware of what the US goverment did with poker. Are YOU aware that there are other countries in the world where its perfectly legal to play online poker? Are YOU aware that NOONE mines with their home connection or that you can piss on ISP filters without a vps/vpn, just by changing your DNS servers? Are YOU aware that people can trade bitcoins without the need of a service?

Obviously you are not. You are just comparing apples with oranges and have no clue of what youre talking about.

 

[lunbmaunal]

Why you give it a second thought? There are a LOT of cash to be made. I felt that is the reason we are for the most part here for?!

 

[redjebo]

still not reading or not understanding what you read.

I am not aware of what the US goverment did with poker. Are YOU aware that there are other countries in the world where its perfectly legal to play online poker? Are YOU aware that NOONE mines with their home connection or that you can piss on ISP filters without a vps/vpn, just by changing your DNS servers? Are YOU aware that people can trade bitcoins without the need of a service?

Obviously you are not. You are just comparing apples with oranges and have no clue of what youre talking about.

I am aware that there are other countries in the world where its perfectly legal to play online poker. As long as those countries see no harm to their economic and are allowing only licensed operators in their web space it's all good with them, how's this relating to the fact that US citizens are restricted in playing online? How will it be of any benefit to ANY American wannabe crypto user for an instance if US bans crypto owning and operating in any form but other countries have it legal? Will you keep operating/trading crypto assets while facing serious time in prison if caught? This ain't no digital piracy which is a crime against private property, this will be crime against the STATE, there is your apples and oranges.

And if it comes a time for crypto assets to be declared threat to economics and forbidden, it's pretty damn sure it wont be a single country which will come to that conclusion and crypto will definitely say bye bye to mass adoption plans. No adobtion, no growth, no use case, no future.
Sad I have to explain basics like this here but some people obviously don't have a clue how a state operates and its mechanisms of keeping clear from national security threats like tax evading or trashing national currency. Young guys have no clue how basic stuff works in real life because they've never gotten to do anything on their own and research how institutions control and prevent their life from crumbling is my guess.