Bitcoin is a Ponzi scheme and mining is a threat to the environment ?
Today, Bank for International Settlements (BIS) chief said about bitcoin that it is "a combination of a bubble, a Ponzi scheme".Also due to the energy consumption required for mining bitcoin, it is "an environmental disaster". What are your views on the same?
Eric, that video was great! I only got through 1/2 of it tonight, but it really is amazing what this could do to the world Monetary policy. Imagine each person having monetary sovereignty, via a node. We would not be vulnerable as we are now to data being wiped out, things being shredded, 80,000 of us having our ssn stolen because of a credit company "lost our data", Trust is very low for everyone regarding our personal information and certainly our money. Bitcoin seemed like a new reality of transparency, of trust. I would have the banking ledger of all people on the currency (bitcoin or whoever it becomes). I thought the Geopolitical comments were very interesting with China and Russia pushing gold, and steering clear of this new monetary source (bit coin). I think it puts the power and wealth back into the hands of the normal joe and jane and makes me very interested in learning more about this. I didn't have enough time to deal with the cost of mining for this currency, which will be either in the US or Canada according to the video. I read some materials before, Eric, but this was fabulous-complicated, but very, very good.
To me bitcoin could be a bubble (as it was recently) but is not a Ponzi scheme. Main issues are that is not regulated, several external factors (both positive as some digital sales days and negative as the statements of the Chinese Central Bank Officer) could impact on it and people started to "play" with this without being aware about what they were doing. The first rule of investments says when everyone buys, you sell. When everyone is selling, it is now time to buy. But people failed with this right now. Bitcoin is a currency but it is mainly considered as an investment. I read something about the environmental risks connected to bitcoin but I am not really into these to provide with my point of view.
There is absolutely utility value in Bitcoin. You cannot argue with Math. If someone tells you that 2+2=5, we can all agree that's false and correct it to 4. The algorithms and proofs that the network itself follows is a work of art, philosophy, and modern cryptography. This is why this phenomenon is attracting the brightest minds in mathematics from around the world.
In order to see the utility value in Bitcoin, you must understand that the underlying value is a platform of trust. It is designed so that we no longer need a human being to validate whether or not a transaction of value is deemed to be "true". This is the first time EVER where we can send any unit/token of value around the world with no middle man.
Everyone who is going to quote today's SEC hearing should be focused on the fact that the overwhelming consensus was "this is here to stay, so how can we make it safe?"
Eric: A decentralized network denies the basic function of banks; to aggregate and intermediate capital. Banks purchase the bonds by which we fund roads, hospitals, universities, etc. That function does not exist in a decentralized system. Central banks evolved because we need regulation of the money supply to and quantitative easing was a realistic approach when moire money was needed to stimulate economic growth. The great bulk of the people in the world are content to use fiat currency and will continue to be content. Most serious economists agree.
Eric- Working at a bank for 4 months does not give you any idea of how banking works. The 2 billion unbanked people you refer to would be much happier and content if I gave them a US $20 bill than an equivalent amount of Bitcoin. And yes blockchain has utility, but that does not give utility to Bitcoin and it is not necessary.You are parroting things that serious people don't take seriously. A decentralized world is a fantasy. Government is a necessity.
BITCOIN is SLOW
Bitcoin transactions have always been slow, but now they are expensive too, which means that small transactions are no longer worth it.
For example, the average cost has gone from less than a dollar at the beginning of 2017 to more than $40 per transaction last month, as the growing demand for new transactions has exceeded the network’s capacity to confirm them. Arguments over what to do about the bottleneck have grown into a full-fledged Bitcoin civil war.
14 months ago
The statement is essentially correct. Bitcoins have no real utility. The main argument is that goverments and banks are evil and will be upended by crypto currency which is a foolish statement. Block chain on the other hand may have utility but it is no here yet. The energy consumption is indeed a problem. The people mining these coins want to have a machine in their closet that spits out money. SO do I but this isn't real.