# I am new to bitcoin and need some advice.

Discussion in 'Intelligence & Machines' started by aaqucnaona, Sep 28, 2013.

1. ### Billy TUse Sugar Cane Alcohol car FuelValued Senior Member

Messages:
23,198
I agree both are "greater fool" schemes. The only real difference is some of them are started by one (or a few) people to make money. I. e. Ponzi, and the invertors of bitcoin, and originators of chain letters,* (many of them) etc. are in the same group as they do have your "nefarious conspirator(s)." I refer to ALL this group with founders hoping to get rich as "Ponzi Plans."

Teulipmania, Florida land bubbles, (there have been at least 4), vinyl disk music, (or baseball card) collectors, etc. which have no "founder(s)" are in in a different group.

Bitcoin's founders not only are getting rich but literally are "making money" too. Ponzi only got rich, until the collapse. Both these types of greater fool plains ultimately collapse, either when no greater fool can be found or the government makes them illegal (as Chain letters are already and bitcoin will be when it cuts significantly into the government's revenue - "senoriage profit" of >95 cents on each dollar it prints.

Vinyl disk music collectors are now no more than two generations from collapse as by then there will be no functional machines that can play the music. Baseball card collectors probably will be finding greater fools (some die each year, but are replaced) until soccer (or another team sport) has replaced baseball and no one even remember the rules of baseball, but it will collapse someday too, as there is very little intrinsic worth in small pieces of thin cardboard.

* I think only chain letters that ask you to send money are illegal, but perhaps all are as Post Office loses more money, the more mail there is.
The one I like best asks for a service, not money. It goes like this:

Add your address to bottom of the list and remove the top one so list remains 4 long. Then send letter, with your name at the bottom, to four of your closest (live near you) friends. After that, you go after dark on 4 consecutive days, to the four address sent to you and shit on the lawn there. (Don't be embarrassed - many will doing the same.) Then after a few days, for couple of weeks, if no one breaks the chain, your lawn will be fertilized for free by 256 people!

PS - Unlike many chain letters this one can continue forever - a few months from now, you may get the same opportunity to help others ecologically again.

Last edited by a moderator: Nov 21, 2013

3. ### Captain KremmenAll aboard, me Hearties!Valued Senior Member

Messages:
12,738
If the holders of bitcoin wallets are regulated, as is Coinbase, then bitcoin purchases are no more anonymous than google searches.
Even when the trail is more difficult, large transfers can still be followed by someone with the knowledge and will to do so.
Laws will arise to prevent money laundering, but it is such rich pickings for the Feds,
all these dumb people thinking that bitcoins are "safe" for illegal purposes,
that they will not be rushing to enact legislation just yet.
The reason for the current rise is not just empty mania, but a response to positive indications that the Bitcoin will not be banned in the US.
The total value of the currency at its highest over the last few days was about $10 Billion. If it can become acceptable to vendors, that is peanuts. Volatility is the biggest problem for Bitcoins. 4. ### Google AdSenseGuest Advertisement to hide all adverts. 5. ### Billy TUse Sugar Cane Alcohol car FuelValued Senior Member Messages: 23,198 I asserted in post 39 that NSA, could make new BTCs, but many "geeks" can steal them. Here is sad story told by a victim who lost 25,000 BTCs and people who know* much about computers than I do discussing the theft: https://bitcointalk.org/index.php?topic=16457.0 His loss at that time was ~$50,000 and depressed him so much that he briefly became suicidal. Now or when 1 BTC = $800, loss of 25,000 of them is a 20 million dollar loss ($20,000,000 gone) ! I bet he is suicidal again (or dead?).
That link is 15 June 11 update to this article: http://www.economist.com/blogs/babbage/2011/06/virtual-currency which has good discussion of "bitcoin basics."

* If you don't think NSA & DFA (Drug & Fire Arms) etc. agencies of US already know who has more than $10,000 worth of BTCs, I have a good deal for you (I'm selling cheap) on a Bridge in Brooklyn. 6. ### Google AdSenseGuest Advertisement to hide all adverts. 7. ### joepistoleDeacon BluesValued Senior Member Messages: 22,880 You are absolutely correct on this one Billy T. Theft and security is a problem. Just go to the Bitcoin website and read their warnings. 8. ### SyzygysAs a mother, I am telling youValued Senior Member Messages: 12,671 A thing can be both. If you think about it, the tulipmania was a Ponzi, essentially a pyramid scheme (what ponzis are). Just because the thing to be exchanged actual had value (nice to look at or smells good) doesn't change the underlying character of the business model, namely it needs an exponential growth of the user base to sustain it.... Stocks of companies without revenues are ponzis too, technically speaking, because without stockholders, there is absolutely no value of the company... 9. ### Billy TUse Sugar Cane Alcohol car FuelValued Senior Member Messages: 23,198 I agree tht is true, but think it is always useful, if possible, to subdivide any group for more clear discussion of it as I did. I. e. I only call your business models "Ponzi schemes" if they were founded - i.e. had one or more "Ponzi" founding them, almost always with idea that they would gain money for their "founding efforts." Also the "business model" is normally a valid one, for some time. Ponzi's was. Most Ponzi schemes start well, and the founder sells first to his friends and many, most usually, if they get out in time make money. Bitcoin's founder(s?) are not only clever, but wise - no one knows who they are, so probably he/she/or they/ will not end up in jail as Ponzi and Maddoff did. This, IMHO, is strong evidence that they understood from the start it would collapse some day. They planed to get rich from the start at the expense of others, so are more evil and exceptions to the typical Ponzi where the founder initially wants to help his friends as well as himself as Ponzi and Maddoff did. Ponzi bought (and sold at higher price) international postage stamps - was profiting like many providing arbitrage service do but then the arbitrage turned against him and the flow of ever more funds to him was too tempting to just go out of business as he should have so he paid off old promises, as Madoff did, with the influx of new funds for as long as he could. Other unsound business plans just arise up under the "greater fool" idea, without any "founder." Some, I admit, are hard to put in either group. For example the housing bubble, had many who were pushing / granting / mortgages to buyers they knew could not pay the mortgage. They knew they could dump the bad paper on Freddy & Fanny May in a day or two. Are these many 1000s of people "founders" of the "great fool will buy the house you just bought" unsound business plan "Ponzi founders", or not? Most people believed home prices only could go up, as did the buyers of tulips, long ago. In most cases, however, it is easy to say if there were "founder(s)" or not. I'm having trouble getting my head round the idea that there can be stock with no owner of it. Some valuable companies exist without any stock. For example the hugely valuable Cargill corporation is more valuable than 99% of all corporations and privately owned by the fifth generation descendants of the creator, a wealth ship captain and owner of other ships too, when he became a bored "land-lubber" looking around for something to occupy his time (as I recall). while usually true, not always is. For example the chain letter I like best, described in green text at end of post 41, can continue forever - as long as there are people on earth with lawns. Last edited by a moderator: Nov 22, 2013 10. ### joepistoleDeacon BluesValued Senior Member Messages: 22,880 No using your definition of Ponzi scheme everything is a Ponzi scheme. Paying too much for something is not a Ponzi scheme. It happens all the time. 11. ### Billy TUse Sugar Cane Alcohol car FuelValued Senior Member Messages: 23,198 I did not see him defining a Ponzi scheme that way: As paying too much when buying, so I suspect you are putting words in his mouth too. If not, tell what post he gave the definition you refer to with: "Paying too much for something is not a Ponzi scheme. " as if Syzgys had said that that is what Ponzi schemes are. 12. ### joepistoleDeacon BluesValued Senior Member Messages: 22,880 LOL, you have "words in your mouth" on the brain. Bitcoins are not a Ponzi scheme. A key element of a Ponzi scheme is deception. People are not being deceived with Bitcoins; they are being stupid. They are paying too much for them. As I said before, paying too much for something does not make it a Ponzi scheme. Ponzi schemes are illegal. And contrary to your claims there is no evidence of a Ponzi scheme here with Bitcoins. There is no indication of fraud here. There is massive evidence of what Greenspan called irrational exuberance. But irrational exuberance does not a fraud/Ponzi scheme make. And similarly, tulipomania was not a Ponzi scheme as claimed. There was no evidence of fraud in the tulip bulb fiasco of 1637. There was, as there is with Bitcoins, massive evidence of irrational exuberance, of people overpaying for something. As I said before paying too much for something does not a fraud/Ponzi scheme make. You guys, as usual, are playing fast and loose with the facts and with Webster's Dictionary. http://en.wikipedia.org/wiki/Ponzi_scheme PS Showing the error in your posts is likewise not “putting words in your mouth”. Your accusations are just a way to obfuscate. 13. ### Captain KremmenAll aboard, me Hearties!Valued Senior Member Messages: 12,738 Not really a fair point. Bitcoin is providing a service. It isn't any kind of illegal scheme. Look at what ebay does. They make Billions of dollars each year just for providing software and a selling platform. If you've ever used Turbolister, you'll realise that some of the software isn't even very good. Perhaps Bitcoin's service isn't good enough, and maybe as a result they will be overtaken by someone else, but you can't criticise them just because they earn money by doing very little. 14. ### Captain KremmenAll aboard, me Hearties!Valued Senior Member Messages: 12,738 Here's a nasty surprise for some bitcoin users. Malware that locks their coins until they pay a ransom. By using bitcoins, the perpetrators cannot be traced. Ironic eh? Please Register or Log in to view the hidden image! http://www.zdnet.com/rising-bitcoin...are-scammers-to-drop-asking-price-7000023519/ This type of malware can be a bitch to get rid of, but in this case there is a twist. You can get rid of it easily enough, but your bitcoins are still scrambled. The only way to get them back is to pay up. Someone will now be writing software for a bitcoin "safe" to keep them secure from attack. Last edited: Nov 23, 2013 15. ### Billy TUse Sugar Cane Alcohol car FuelValued Senior Member Messages: 23,198 Fair or not is subjective, I'd be more concerned it you said one of my facts was wrong. Ponzi and Madoff provided services (financial investment service) too. Only a tiny fraction of the bitcoins that exist are being used to buy any thing as I understand it - more than 90% are just being horded with the hope they will be worth more later (and not be made illegal, stolen, or confiscated as all that silkroad's have been.) BTW just to day the judge deny bail to the silkroad founder so he remains in jail. 16. ### Captain KremmenAll aboard, me Hearties!Valued Senior Member Messages: 12,738 Silkroad's crime was not their use of bitcoins. 17. ### Billy TUse Sugar Cane Alcohol car FuelValued Senior Member Messages: 23,198 True. They were selling illegal drugs. Both they and the buyer under the delusion that the government would not know who they were as deal transaction was in bitcoin. I speculated in a prior post that NSA and several other government agencies already have names and addresses of all owners of N or more bitcoins, where N is not a very big number, say 16 as storage of digital data is cheap and growing cheaper per bit ever week. For those with N = 64 or more I bet the IRS has them on their "check carefully" list. 18. ### joepistoleDeacon BluesValued Senior Member Messages: 22,880 Well you see that is the problem. You are not concerned when your facts are wrong as they frequently are and as they were in this case. This isn't subjective. Ponzi and Madoff committed a verifiable fraud. You cannot say as you have done Bitcoin has done the same thing. They have created a product, the Bitcoin, a bar code. There are people hoarding gold too. Does that make gold a Ponzi scheme? Of course not, you are being unreasoned and illogical, not to mention not factual. And it doesn't seem to bother you at all. 19. ### sunshakerRegistered Member Messages: 84 Bitcoin, The banks have always wanted a virtual currency, Bitcoin was brought into existance by the banking cartels, They set it in motion once again creating "wealth from nothing, If bitcoin does take hold, your "wealth" can be deleted by a touch of a button, This is the next step of this so called "new world order", do not be fooled. 20. ### Captain KremmenAll aboard, me Hearties!Valued Senior Member Messages: 12,738 Please provide your evidence for the statements I have numbered. 21. ### SyzygysAs a mother, I am telling youValued Senior Member Messages: 12,671 Not the overpaying but the need for the exponential growth makes it a ponzi... For Billy: Ponzi never bought the stamp. His business model was legit, there was a price difference between the locations and he would have been arbing the difference, had he actually bought the stamps... 22. ### sunshakerRegistered Member Messages: 84 The evidence is everywhere,(cashless electronic currency) http://www.financialsurvivalcenter.com/cashless-society-the-invisible-prison/, http://www.paristechreview.com/2012/08/21/going-cashless/ The banks could never of made us except bitcoin, so they set it in motion and let the people think they have found this "new currency", they will already own most bitcoins, so they can control how much 1 bitcoin is worth by adding more bitcoins or selling blocks to each other at lower prices to drop deflate bitcoins to suit their requirements. No more paper cash bigger profits, no cost of moving cash bigger profits, all one currency bigger profits, If the banks did not want this currency they would of destroyed it before it even got started. Once established, and a few have lost their currency into the ether, We the people will call for bitcoin to be CONTROLLED/POLICED. Richard branson excepts first bitcoin, bitcoin jumps$200, "well done lieutenant Branson".
oh granmother what big teeth you have.

23. ### Captain KremmenAll aboard, me Hearties!Valued Senior Member

Messages:
12,738
Live price of Bitcoin here:
http://preev.com/

"They will already own most bitcoins,"
That could be true. They could be in very few hands. No-one knows.
But it could also be untrue.
How come you are so certain about it?

Last edited: Nov 25, 2013