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Bitcoin is a Ponzi scheme and mining is a threat to the environment ?

1
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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?

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Hitesh Mathpal
20 months ago

9 answers

2

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.

Lorraine

Lorraine Teel, MBA, CPA
20 months ago
Agreed - Dr. David E. 8 months ago
1

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.

Paolo Beffagnotti
20 months ago
Good points Paolo. - Hitesh 20 months ago
Agree - Dr. David E. 8 months ago
Another big down at the beginning of January then it was rather stable - Paolo 8 months ago
But, the security process of BC is rising - Dr. David E. 8 months ago
Yes but still more to fix such as cyber attacks and wallets vulnerabilities - Paolo 8 months ago
Of course. - Dr. David E. 8 months ago
Good points. - Maya 7 months ago
Thanks - Dr. David E. 7 months ago
and then up again during the last week, the volatility is still crazy - Paolo 7 months ago
A slow demise - Dr. David E. 7 months ago
1

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 Bujold
20 months ago
Agreed Eric. I think the question is not on the technology here. The blockchain is a great piece of math and consensus algorithm is the key. I am trying to understand the product of Blockchain - Bitcoin. The way it is flipping in the market creates doubts about its future. Technological trust is fine - no doubt, but how can we bring trust in the economy for bitcoins? - Hitesh 20 months ago
Just wanted you to see this video. This might shed some light onto that question. Probably my favourite piece related to Bitcoin of all-time... and it's extremely recent. - Eric 20 months ago
This economic shift and wealth transfer will happen gradually over 15 years... but no doubt all products and services will have a cryptocurrency/token/coin/WHATEVER that helps promote network effects and the best product experiences known to mankind. This is a whole new business model, where aligning interests of everyone involved through a trusted platform is finally possible. - Eric 20 months ago
Interesting, thanks for sharing. - Hitesh 20 months ago
Agree to all above - Dr. David E. 8 months ago
1

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.

Irwin Stein
20 months ago
Irwin - I currently work for one of the top 25 largest banks in the world... so I would argue that I understand what functions banks currently play in our economic and social constructs... Banks will have a new function in the decentralized economy. The great bulk of the world are actually NOT content with fiat... with more than 2 Billion humans having no stable currency or government to regulate. - Eric 20 months ago
Eric Bujold How do you think a Bank should accept decentralized currency in addition of your Banking experience ? Where do you see Central Banks, Currency Management, FedEx, and Bonds kind of operations (under compliance scan) with Bitcoins ? - Hitesh 20 months ago
Hitesh Mathpal Banks and Governments must get together and build their tech stacks to a level of incredible intelligence. We need to review how to program the very rules and regulations that we want to uphold into the software that we build in this ecosystem. The reality is Bitcoin (and cryptos) will help form an ecosystem in which these digital footprints can undergo scrutiny of regulatory algorithms. - Eric 20 months ago
Watching the SEC and CFTC yesterday in front of Congress highlighted the need for regulators to build their blockchain intelligence at a rapid rate - Eric 20 months ago
Government bonds can be sold directly to people who wish to hold them (institutions and retail investors). The reality is institutions hold a large portion of government bonds as well as banks. Decentralization brings financial sovereignty back into the hands of the people who create value. - Eric 20 months ago
It's very hard for me to comment on what role banks will play in this space... but they have the assets to be a leading player. I'm a firm believer in order to understand what's happening we need a paradigm shift - a drastic reevaluation of the underlying assumptions that govern society today. Reevaluate economic, government, and social systems and how to unify values. Cryptos do just that. - Eric 20 months ago
Thanks Eric Bujold - Hitesh 20 months ago
due to the energy consumption required for mining bitcoin, it is "an environmental disaster" = silly - Dr. David E. 7 months ago
1

I don't think it is a Ponzi scheme but yes this is the time when some serious steps should be taken for regulation.

Charu Gulati
20 months ago
If BitC represents BlockC; then all is lost - Dr. David E. 8 months ago
1

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.

Irwin Stein
20 months ago
Thanks - Stern but needed - Dr. David E. 8 months ago
1

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.

Any thoughts?

.

Dr. David E. M
8 months ago
0

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.

Irwin Stein
20 months ago
I'd like you to try to make an argument that fiat currencies have utility value. Money only has value if everyone agrees that it is trusted. Now, instead of needing a government and central bank to regulate it's supply and trust, you use a network of computers with NO bias to do so. Oh, and I forgot to mention... you can't use quantitative easing to slow/speed up the economy. - Eric 20 months ago
Agreed - Dr. David E. 8 months ago
0

Panel, thanks for your participation. However most of us focused on "Bitcoin and its credibility" , can you please share your views on "Mining and Environment" aspects as well ?

Hitesh Mathpal
20 months ago
Yes - mining uses a considerable amount of energy... however, what takes more energy and more time are the hundreds of billions of dollars needed to verify ledgers in fiat ecosystems. Not to mention - there are cryptos looking to help plug in a global ecosystem of energy tokens that help us make money from being more sustainable humans in day to day life. Take KWH coin, for example. - Eric 20 months ago
Still a problem that cannot be ignored. Some tokens use Proof algorithms that are less energy intensive at the expense of security (in theory). - Eric 20 months ago
Majority of bitcoin mining today is based on renewable energy sources. Miners have the opportunity to look for the most effective cost and greenest energy source. Impact of bitcoin is limited as compared with other industries. - Paolo 8 months ago
Bitcoin mining increase Co2 emissons, as well. - Dr. David E. 8 months ago
Agree Dr. David E. Marcinko MBA - Maya 7 months ago
OK - Dr. David E. 7 months ago

Have some input?