[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Sign-in]  [Mail]  [Setup]  [Help] 

Status: Not Logged In; Sign In

Tucker Carlson: This current White House is being run by Satan, not human beings U.S. Submarines Are Getting a Nuclear Cruise Missile Strike Capability: Destroyers Likely to Follow Anti-Gun Cat Lady ATTACKS Congress Over Mexico & The UN! Trump's new border czar will prioritize finding 300,000 missing migrant children who could be trafficking victims Morgan Stanley: "If Musk Is Successful In Streamlining Government, It Would Broaden Earnings Growth And Stock Performance" Bombshell Fauci Documentary Nails The Whole COVID Charade TRUTH About John McCain's Service - Forgotten History Bombshell Fauci Documentary Nails The Whole COVID Charade Joe Rogan expressed deep concern that Joe Biden and Ukrainian President Zelensky will start World War III Fury in Memphis after attempted murder suspect who ambushed FedEx employee walks free without bail Tehran preparing for attack against Israel: Ayatollah Khamenei's aide Huge shortage plagues Israeli army as losses mount in Lebanon, Gaza Researchers Find Unknown Chemical In Drinking Water Posing "Potential Human Health Concern" Putin visibly ‘shocked’ by US green-light for long-range missiles to strike inside Russia The Problem of the Bitcoin Billionaires Biden: “We’re leaving America in a better place today than when we came into office four years ago … " Candace Owens: Gaetz out, Bondi in. There's more to this than you think. OMG!!! Could Jill Biden Be Any MORE Embarrassing??? - Anyone NOTICE This??? Sudden death COVID vaccine paper published, then censored, by The Lancet now republished with peer review Russian children returned from Syria Donald Trump Indirectly Exposes the Jewish Neocons Behind Joe Biden's Nuclear War Key European NATO Bases in Reach of Russia's Oreshnik Hypersonic Missile Supervolcano Alert in Europe: Phlegraean Fields Activity Sparks Scientists Attention (Mass Starvation) France reacted to the words of a US senator on sanctions against allies Trump nominates former Soros executive for Treasury chief SCOTUS asked to review if Illinois can keep counting mail-in ballots 2 weeks after election day The Real Reason Government Workers Are Panicking About ElonÂ’s New Tracking System THEY DON'T CARE ANYMORE! Young Americans Are Turning Off The TV Taxpayer Funded Censorship: How Government Is Using Your Tax Dollars To Silence Your Voice

Business/Finance
See other Business/Finance Articles

Title: Bitcoin is a ‘pyramid scheme,’ says an economist
Source: [The Block]
URL Source: https://finance.yahoo.com/news/bitc ... -says-economist-070015526.html
Published: Jan 2, 2020
Author: Yogita Khatri
Post Date: 2020-01-02 11:38:36 by Ada
Keywords: None
Views: 2394
Comments: 22

Bitcoin is a ‘pyramid scheme,’ says an economist

Tendayi Kapfidze, chief economist at Nasdaq-listed online lending marketplace Lending Tree, has said that bitcoin is a “pyramid scheme.”

“You only make money based on people who enter after you,” Kapfidze told Yahoo Finance in an interview published Thursday. He added that bitcoin has “no real utility.”

“They’ve been trying to create a utility for it for ten years now. It’s a solution in search of a problem and it still hasn’t found a problem to solve,” said Kapfidze.

Bitcoin has earned many monikers in its 11 years of existence - a "scam" (by Bill Harris, founding CEO of PayPal); "rat poison" (by Berkshire Hathaway vice chairman Charlie Munger) and "rat poison squared" (by billionaire investor Warren Buffett), among others.

Yet, a recent report from Bank of America names bitcoin the single best investment of the last decade. The report said if you invested $1 in bitcoin at the start of 2010, it would now be worth more than $90,000. Last year alone, the value of one bitcoin rose more than 85%, making it one of the top-performing financial assets in the world.

Post Comment   Private Reply   Ignore Thread  

#1. To: Ada (#0)

It's funny because the only finance experts news media can find to comment on bitcoin are those "deep state" people who've established their success in the world of fiat currency. They can't interview a 25 year vet from any crypto firm's board of directors because crypto was only created some 10 years ago and any businesses based on crypto are only 2-3 years old at most. So there are no pro-cypto voices in the media world to counter biased opinions like these.

To say it's a pyramid scheme is laughable, as the qualification of that:

“You only make money based on people who enter after you,” Kapfidze told Yahoo Finance in an interview published Thursday. ”

That's true of gold too, and pretty much any commodity. Stocks at least pay dividends which doesn't rely on downline buyers but with the P/E ratios these days, that doesn't count for much.

He added that bitcoin has “no real utility.

Yes it does. It facilitates transactions worldwide with no intermediaries, is oblivious to sanctions, and at a fraction of cost. It's also a method of storing wealth that is very difficult for governments to seize.

>“They’ve been trying to create a utility for it for ten years now. It’s a solution in search of a problem and it still hasn’t found a problem to solve,” said Kapfidze.

That's hogwash. Bitcoin was devised in response to the 2008 financial crisis, which was a problem just short of being the "Mother of all Problems", that problem being fiscal irresponsibility and theft by Congress.

Now Bitcoin does have its problems. Namely, transaction speeds, while far faster than bank wires, is woefully inadequate for retail, point of sale use. Transactions can take 30 mins to an hour which is far too long for paying for groceries at the checkout counter. There's also the number of transactions per second. Visa/mastercard services, being centralized, can handle 10's of thousands per second while bitcoin is maybe less than a dozen. For crypto to truly compete with CC's and cash, it needs to bridge those gaps. But it should, with time. How long, I don't know, but tech is always getting better.

Pinguinite  posted on  2020-01-02   13:55:14 ET  Reply   Trace   Private Reply  

How are bitcoins mined?

Ada  posted on  2020-01-02   14:31:10 ET  Reply   Trace   Private Reply  

How are bitcoins mined?

Bitcoin, and all free market crypto, is mined by solving puzzles. It's a race. You might picture a warehouse full of unsolved Rubik's cubes. They are available for anyone to solve, in sequence. So it's a race to solve each one. Everyone competes to solve it and whomever solves it first is, generally, winner of the 6.25 bitcoins that come with it, after which the next puzzle becomes available to solve. Lather, rinse repeat.

I say "generally" because 2 parties could solve it at about the exact same time, which occasionally happens. In that case, the tie-breaking race is to essentially spread the news to other nodes on the blockchain/internet, and the one who spreads the news fastest wins.

Each time a puzzle is solved, a new link in the blockchain is created and in that link, pending bitcoin transactions are permanently recorded for all time. So mining is directly tied to the ability to transact bitcoin. Puzzles are solved about every 15-30 minutes, on average.

So "mining" bitcoin means having a computer competing to solve the bitcoin puzzles. An independent homeowner system could try this, but the competition is so big it could mean working this for a few years with nothing to show for it except for higher electricity bills. 6.25 bitcoin is about $45,000 at current market prices, but even so, some people give up as for some, it may be like trying to win the lottery.

Pinguinite  posted on  2020-01-02   15:33:50 ET  Reply   Trace   Private Reply  

If you are interested, here is a video by Mike Maloney that is very well presented, illustrated and entertaining. It gives a good foundation of crypto. It's about an hour and 15 mins.

I think he is off a little bit when he discusses Hashgraph tech as a perfect replacement for blockchain, as he's a finance guy and not a computer guy, but it's still a good watch.

Pinguinite  posted on  2020-01-02   17:07:31 ET  Reply   Trace   Private Reply  

Bitcoin, and all free market crypto, is mined by solving puzzles.

So anybody can mine bitcoins, but to mine dollars you have to be in the club?

StraitGate  posted on  2020-01-02   17:16:12 ET  Reply   Trace   Private Reply  

So anybody can mine bitcoins,

Yes.

but to mine dollars you have to be in the club?

No, there's no club to join. If you want to you can put your computer to work mining bitcoin, or go on ebay and find specialized equipment to do it much faster. It's free market. Decentralized. Anyone can do it.

Edit: I note after responding you said mining "dollars" requires club membership. Yes, of course, the Fed can print dollars at will, and only releases those dollars to the fed gov. It is quite centralized, and with no mining required.

It's the digital equivalent of mining gold. If you go into the wilderness, you can look for it like anyone else.

There are (still?) a few android apps that you can run where you essentially rent out your device to the app maker to help mine. They'll pay you a tiny amount of bitcoin as rent. You pay the electricity used by your device, of course, but in that case, you should be guaranteed to make bitcoin, and you don't have to worry about actual mining success.

Pinguinite  posted on  2020-01-02   17:44:54 ET  Reply   Trace   Private Reply  

Everyone competes to solve it and whomever solves it first is, generally, winner of the 6.25 bitcoins that come with it, after which the next puzzle becomes available to solve. Lather, rinse repeat.

I thought the supply of bitcoins was frozen, i.e., there could never be any more of them created.

Ada  posted on  2020-01-02   18:25:54 ET  Reply   Trace   Private Reply  

I thought the supply of bitcoins was frozen, i.e., there could never be any more of them created.

There is a cap currently in place in the mining software for a limited number of bitcoin. Some 80% have already been mined, but there is also in place a "halving" that occurs at various benchmarks where the reward for mining is cut in half. It's already happened a few times as it used to be 25 coins per puzzle, then 12.5. There is also auto provisions in place that make mining harder or easier depending on the collective amount of mining power in play. If miners give up mining and the "hash power" drops, then the puzzles automatically get easier to solve, and vice versa. So bitcoin has a self-governing supply and demand regulation built in to ensure mining will always be profitable to someone, somewhere, but also guarantees there won't be a runaway situation where added computer power won't suck all the future bitcoin supply dry in a short amount of time.

The final coin is expected to be mined some 30 years or more from now. Even so, yes that is a problem because after the last coins are mined, no further transactions in bitcoin will be possible. My expectation is that when that day inevitably approaches, the cap will be lifted. It has to be. There's no other choice. It can be lifted when the software is upgraded, and it is upgraded periodically.

Pinguinite  posted on  2020-01-02   19:03:51 ET  Reply   Trace   Private Reply  

If you want to you can put your computer to work mining bitcoin

Or the really smart investors can buy into DakCoin. A buck two ninety-eight a pop. Signed certificates of authenticity.

“I am not one of those weak-spirited, sappy Americans who want to be liked by all the people around them. I don’t care if people hate my guts; I assume most of them do. The important question is whether they are in a position to do anything about it. My affections, being concentrated over a few people, are not spread all over Hell in a vile attempt to placate sulky, worthless shits.” - William S Burroughs

Dakmar  posted on  2020-01-02   19:47:11 ET  Reply   Trace   Private Reply  

Or the really smart investors can buy into DakCoin. A buck two ninety-eight a pop. Signed certificates of authenticity.

Never heard of it. If it comes with a cert, it seems it must be a physical coin.

But... the certs are signed by whom?

I only recommend getting into Bitcoin and the major alt coins that have proven themselves to a reasonable degree: Bitcoin Cash, Litecoin, Ethereum pretty much being it. Other coins may rise to the top in which case they've proven themselves also. But there are hundreds of cryptos out there which can be had for a fraction of a penny each whole coin. For the most part, they are just pump and dump schemes of near complete speculation where marketers exploit speculators into seeing a quick double or quadruple or more of an investment. But if a coin has no prospective value in the wider market, I recommend staying away from it.

Pinguinite  posted on  2020-01-02   21:05:21 ET  Reply   Trace   Private Reply  

But... the certs are signed by whom?

DakmpTroller-in-chief, who else :)

“I am not one of those weak-spirited, sappy Americans who want to be liked by all the people around them. I don’t care if people hate my guts; I assume most of them do. The important question is whether they are in a position to do anything about it. My affections, being concentrated over a few people, are not spread all over Hell in a vile attempt to placate sulky, worthless shits.” - William S Burroughs

Dakmar  posted on  2020-01-02   21:21:26 ET  Reply   Trace   Private Reply  

Or the really smart investors can buy into DakCoin.

DakCoin isn't bad, but have you considered StraitCoin? The last time I checked, StraitCoin was headed to the moon. (If it doesn't get fried in the Van Allen radiation belt.)

StraitGate  posted on  2020-01-02   21:31:41 ET  Reply   Trace   Private Reply  

Once the price falls that market might really heat up.

“I am not one of those weak-spirited, sappy Americans who want to be liked by all the people around them. I don’t care if people hate my guts; I assume most of them do. The important question is whether they are in a position to do anything about it. My affections, being concentrated over a few people, are not spread all over Hell in a vile attempt to placate sulky, worthless shits.” - William S Burroughs

Dakmar  posted on  2020-01-02   21:34:24 ET  Reply   Trace   Private Reply  

Aaaaaaaaah....... okay... Yeah Good stuff there.

Pinguinite  posted on  2020-01-02   22:15:50 ET  Reply   Trace   Private Reply  

Is it past your bedtime?

“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken

Lod  posted on  2020-01-02   23:16:12 ET  Reply   Trace   Private Reply  

It's always past my bedtime.

Pinguinite  posted on  2020-01-02   23:25:49 ET  Reply   Trace   Private Reply  

The final coin is expected to be mined some 30 years or more from now. Even so, yes that is a problem because after the last coins are mined, no further transactions in bitcoin will be possible. My expectation is that when that day inevitably approaches, the cap will be lifted. It has to be. There's no other choice. It can be lifted when the software is upgraded, and it is upgraded periodically.

I appreciate your expertise in this, Ping. Why will people no longer be able to trade in BC at that time? And who will life the cap? ;-)

_____________________________________________________________

USA! USA! USA! Bringing you democracy, or else! there were strains of VD that were incurable, and they were first found in the Philippines and then transmitted to the Korean working girls via US military. The 'incurables' we were told were first taken back to a military hospital in the Philippines to quietly die. – 4um

NeoconsNailed  posted on  2020-01-08   22:16:50 ET  Reply   Trace   Private Reply  

The last time I checked, StraitCoin was headed to the moon. (If it doesn't get fried in the Van Allen radiation belt.)

I would say that is the killer. LOL

"When bad men combine, the good must associate; else they will fall, one by one." Edmund Burke

BTP Holdings  posted on  2020-01-08   22:36:19 ET  Reply   Trace   Private Reply  

I appreciate your expertise in this, Ping. Why will people no longer be able to trade in BC at that time? And who will life the cap? ;-)

The best explanation is provided in the youtube I posted in my previous comment. It's an excellent presentation, not boring at all.

But the short answer is that the mining of new coins is directly linked to the operation of recording transactions. When new coins are mined, a new block is added to the blockchain, which simultaneously awards new bitcoins to the successful miner AND records pending bitcoin transactions. If mining discontinues for any reason, such as when all miners stop mining or after all coins are mined, no more blocks can be added to the blockchain, and without that, no more bitcoin transactions can be effected.

Watch the video for an illustrated example of how things work.

The cap can be lifted by modifying the software that is the bitcoin framework. The decision is made by general consensus. Once the bitcoin mining software is modified to raise the limit, miners are free to start using it or not. If all miners accept the new software, then the change is uncontested. If there is a substantial number of miners that reject the new software, such that some miners use one version and others use a different version, then it's a situation known as a "hard fork" where both the old and new versions are valid and start competing in the market against each other. Anyone having bitcoin before that event will have coins in both versions.

In the case of running out of bitcoin, however, any not accepting the new software lifting the cap on bitcoin generation cannot mine anything. Though in reality, the cap will be lifted long before the final coin is mined.

Pinguinite  posted on  2020-01-08   23:41:08 ET  Reply   Trace   Private Reply  

The cap can be lifted by modifying the software that is the bitcoin framework. The decision is made by general consensus.

So the person who hatched all this is mere history, like a pill you take. His ownership, leadership or whatever was purely temporary -- nobody knows who he is, when he left it, how he feels about anything at all?

Did we hear that he was found and arrested a few years ago? Hope not. This pure democracy you describe -- hope it works!!!

_____________________________________________________________

USA! USA! USA! Bringing you democracy, or else! there were strains of VD that were incurable, and they were first found in the Philippines and then transmitted to the Korean working girls via US military. The 'incurables' we were told were first taken back to a military hospital in the Philippines to quietly die. – 4um

NeoconsNailed  posted on  2020-01-09   3:04:42 ET  Reply   Trace   Private Reply  

So the person who hatched all this is mere history, like a pill you take. His ownership, leadership or whatever was purely temporary -- nobody knows who he is, when he left it, how he feels about anything at all?

The person who wrote the original paper back around 2008 that describe the theory of a crypto currency goes by the name Satoshi Nakamoto. It's widely believe to be an alias and not a real name. One person claims to be Satoshi, a Dr. Craig Wright. He was involved with the bitcoin project and disagreed with how it was going, so he and a number of followers did their own fork of the bitcoin software nd the name of the new crypto was "BitCoin Cash". Later he had a falling out on further changes Bitcoin Cash was making and another fork occurred and he went with his preferred version which acquired the name Bitcoin SV ("Satoshi's Vision"). To this day it is not known if Wright is Satoshi. The claim is neither proven but neither is it contested by anyone else claiming to be Satoshi. His claim could be proven outright, I believe, but that's not been done.

Wright is also in litigation regarding a past partnership related to bitcoin.

Did we hear that he was found and arrested a few years ago? Hope not. This pure democracy you describe -- hope it works!!!

Yes, bitcoin, and all free market cryptos, are completely decentralized. In place of central control is market consensus. Everyone involves votes with their feet and hands, and those that correctly second guesses what the public wants make money.

But no, Satoshi committed no crime whatsoever in conceptualizing crypto and inventing bitcoin. His ID has never been confirmed and to my knowledge there is no arrest warrant or criminal investigation whatsoever related to the creation of bitcoin.

Pinguinite  posted on  2020-01-09   21:23:16 ET  Reply   Trace   Private Reply  

I know this chick who keeps trying to get me to open a digital currency account in my name. The first one they kept sending links which would expire too fast. Now the next one I am not even going to deal with. Screw it. ;)

"When bad men combine, the good must associate; else they will fall, one by one." Edmund Burke

BTP Holdings  posted on  2020-01-09   22:16:12 ET  Reply   Trace   Private Reply  

[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Sign-in]  [Mail]  [Setup]  [Help]