Cryptocurrency Is a Giant Ponzi Scheme
- Thread starter canada-man
- Start date
You're using El Salvador as your pro-crypto argument?
Bold.
Why would fiat go away?
Which crypto would take over?
Where are these magical places?
Do they denominate all goods and services in crypto?
What taxes can be paid in crypto without converting and measuring it in fiat equivalent>
Which crypto?
True.
Pro-crypto people have said repeatedly that if crypto is regulated it will destroy crypto.
*chef's kiss*
I was getting worried when you went this long before mentioning Elon.
It's all good now.
Why would a country "fiat in their own crypto"?
Do you think "crypto" is just any digital currency?
Crypto is "the next evolution of our species"?
I have to admit, sometimes I am just awestruck at the pure commitment you have to your ideology.
At some point in the future we are going to have CBDCs , Central Bank Digital Currency. Basically, digital fiat.
so I'm assuming that cryptos will not replace fiat and that fiat will be replaced by CBDCs which will be controlled by Banks and enforced by government or a combination of the two.
Traditional stock markets will wane in use and popularity and crypto markets will replace the stock markets along with stocks.
Just a hunch, but that's my gut instinct in all this.
Interesting times ahead no doubt.
Please explain what you mean. I'm not sure.
Stock markets seem like paper casinos to the many naive. In reality if you invest in solid, real businesses, the paper is ownership is physical companies that make things, provide services and produce profits.
Sure, what I meant was and this is 100% speculation, that cryptocurrency will be the new stock market. The stock market itself will go into some kind of obscurity. Again, all speculation.
The only similarity I see is some of the people drawn to both the stock market and crypto. I know plenty of people who trade hyped up stocks as well as crypto. Any asset that has big ups and downs will attract a lot of interest. Similar logic (or should I say illogic) enters into the play. The stock (or crypto) always bounces back after a sell-off and goes up even higher.
"The stock market itself will go into some kind of obscurity" is a crazy statement.
People are a danger to themselves in the stock market if the don't understand they are buying a portion of current and future cash flow. I don't know what one is buying in the crypto market other than the hope someone will pay more for it than they paid.
You can’t pay for goods and services with a speculation or “hope”. You can’t be paid for goods and services with a speculation or hope. With crypto you can. You can’t have a speculation exist on the blockchain and resist all attacks to undermine it over its history of existence. With crypto you can. I would question the individual who ever is disseminating this misinformation and where and why this is being said. It’s okay be brave and follow the thoughts and see who is trying to program you with these ideas and why.
Regardless what people say or think about it is irrelevant. It exists on the blockchain, is enabled and supported through technology, and will existing as long as digital technology exists.
ever ask yourself why people keep saying this drivel while the division between the rich and poor keeps increasing?The main reason why they don’t like it is because it’s undermining their dominance over the common and lower class people. It’s levelling the field and giving everyone an equal opportunity. Obviously they will try to stop this with any means they have. One method is through their media sources which they heavily invest in, own, or pay their bills.I was surprised Kevin O’Leary turned and now he sees how much it will help him, his investments, the world and he can see the future. Because he used to sound exactly like those washed up old white guys above who believe they control you. Regardless what you think of him he is a smart investor. I like him because he is not fake and will tell you exactly what he thinks even if it will hurt. I also agree with him, countries need to regulate it and will become an important source for income, and investments.
It is the future. It’s is technology. It’s part of a fundamental financial revolution happening ATM. Obviously people don’t like this, are scared and will try to stop it with everything they have.
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Which is different from crypto.
The crypto people are adamant that this shouldn't happen.
Why?
Do you think people will not want to invest in companies anymore?
Kevin O’Leary sees crypto as the 12th sector of the s&p 500.
Ark investment sees crypto hitting$1,000,000 by 2030 and have on their webpage metrics exactly how they calculated this.
In the video below they are comparing it to the early adoption of internet and I agree with them. Lucky I am old enough to remember the dial up forums or BBS I think were called I used to visit and when the internet first came on board and the sentiment from people and all the drivel they used to say about it phones , fax machines, and old paper way of doing business and snail mail. I still remember the first time I typed in a www webpage on my dial up modem and how I felt and quickly shut off because I was scared someone was watching me as a 15 yo on the other side lol I also remember waiting like minutes for each line to load up on a porn pic using that dial up. Same I observed during apples first iPhone then during Netflix and block buster. This is the next big financial revolution. Same people, same words, same fear, same uncertainty, same doubt. Then the same people ohh I wish I got it early.
I actually disagree with ark investment and see it hitting $3-5 million by early 2030s. I will only sell if I need it or when I notice dumb money piling on although I would rather just use it directly to buy the stuff I need when my investment multiplies. By that time we should have way more options to use it directly when needed and just pay the tax through crypto to the countries digital currency.
Here is Michael Saylor talking about the dumb money aspect. Even though I don’t like how he talks about it, he does bring up some good points.
Ark investment sees crypto hitting$1,000,000 by 2030 and have on their webpage metrics exactly how they calculated this.
In the video below they are comparing it to the early adoption of internet and I agree with them. Lucky I am old enough to remember the dial up forums or BBS I think were called I used to visit and when the internet first came on board and the sentiment from people and all the drivel they used to say about it phones , fax machines, and old paper way of doing business and snail mail. I still remember the first time I typed in a www webpage on my dial up modem and how I felt and quickly shut off because I was scared someone was watching me as a 15 yo on the other side lol I also remember waiting like minutes for each line to load up on a porn pic using that dial up. Same I observed during apples first iPhone then during Netflix and block buster. This is the next big financial revolution. Same people, same words, same fear, same uncertainty, same doubt. Then the same people ohh I wish I got it early.
I actually disagree with ark investment and see it hitting $3-5 million by early 2030s. I will only sell if I need it or when I notice dumb money piling on although I would rather just use it directly to buy the stuff I need when my investment multiplies. By that time we should have way more options to use it directly when needed and just pay the tax through crypto to the countries digital currency.
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The guy that invented Bitcoin is anonymous because................
- He is digitally manufacturing Bitcoin to spend for himself.
- Plan to disappear with a lot of hard earned money people pay for Bitcoin one day.
- Do not want to be beaten to death when people discover this is all a sham.
- He is digitally manufacturing Bitcoin to spend for himself.
- Plan to disappear with a lot of hard earned money people pay for Bitcoin one day.
- Do not want to be beaten to death when people discover this is all a sham.
Companies set up data centres and fill them with graphics cards to "mine" crytptocurrencies (do complex maths calculations to create Bitcoin/Ethereum etc.). They then just keep and hold the crypto that they mined. Some of them allow other people to "mine" on their equipment and take a cut of whatever they mine.
Bitfarms, Argo, Core Scientific, Marathon, Riot, Hut 8 (has a CEO that's easy on the eyes) are all listed crypto miners. Please do your own homework before looking to invest in anything. (I have "pocket money" holdings in Hut 8 and Galaxy Digital (a crypto finance firm) and have lost money on them).
God told Cathie Wood to set up ARK Investments (she was with Alliance Bernstein before ) and her ETF fees for her tech fund are pretty high, so I hear.
Every time Bitcoin rallies $ 5,000, the manipulators take it down $ 10,000 . Believe it or not, last year at this time it was trading around $ 56,000 ( vs 41,000) . If you were holding cash, you would have been better off just storing it under your mattress. My gut tells me 2 or 3 years from now, it will be at ATH's, but some people don't have the stomach to watch 10% crashes every other month. I decided to cash out 1/3 of my crypto and I was using Coinbase. Proceeds were in my PayPal account within 24 hours. Anyone deciding to invest in Bitcoin, play the buy and hold game, don't try and be a day trader, you'll get REKT. Play the spot market, don't sign up for that 100x leverage account. Don't forget, the players controlling this Ponzi scheme are playing the long game, but they want to liquidate anyone trying to play in their short game.
Dear SEC,
Please DO NOT authorize the Grayscale bitcoin ETF. The reasons why you rejected previous ETF proposals are still valid and should be sufficient to deny this one (and any future ones) as well.
But if you need any other reasons:
Bitcoin Is a Tool of Crime
Bitcoin's only significant use as money and payment system is as a money laundering tool for criminals. It alone created the epidemic of ransomware, a virtually unknown form of attack that has now become the major form of cybercrime, globally and in the US:
From this article:
"A 2017 report from Cybersecurity Ventures predicted ransomware damages would cost the world $5 billion (USD) in 2017, up from $325 million in 2015 — a 15X increase in just two years. The damages for 2018 were predicted to reach $8 billion, for 2019 the figure was $11.5 billion, and in 2021 it’s $20 billion — which is 57x more than it was in 2015."
Bitcoin has also allowed the existence and flourishing of the the so-called "dark markets", notably the drugs-by-mail sector, which has caused thousands of excess deaths by fentanyl and fentanyl-laced heroin overdoses among teenagers.
From this recent article:
"Two-thirds of the approximately 70,000 overdose deaths in the U.S. in 2017 involved an opioid, according to the U.S. Centers for Disease Control and Prevention. Overdose deaths involving the drugs have increased almost sixfold during the past two decades. ... The DEA official said estimates of illicit transactions, including for drugs, conducted in bitcoin reach $76 billion annually ... 'Now, it’s more prevalent than before. [said police Sgt. Joshua Lee of the Mesa, Arizona] Bad guys are realizing they’re less likely to get caught if they move stuff to the dark web.'"
In these roles, bitcoin has taken the place of the defunct rogue a replacement for the defunct internet "criminal bank" Liberty Reserve, for the same reason: it is the only available internet payment system that totally ignores KYC/AML laws. For this same reason, thousands of other commercial and investment frauds have chosen to use bitcoin as the payment method. While some law enforcement agencies may have grown fond of Bitcoin, because they got tracing tools that let them catch small criminals with little effort, the vast majority of the perpetrators of Bitcoin-enabled crimes go unsolved and unpunished.
In contrast, Bitcoin has failed to gain any acceptance as a currency or payment system for legal commerce or other legal economic activity, in spite of 10 years of intense promotion towards that goal. That is not surprising once one learns that it is absolutely awful at those roles, in all aspects. Its value is way too volatile to use as money, often varying by more than 10% in a matter of minutes. Its network is *inherently* expensive to operate, currently consuming more than 50 USD of electricity per transaction processed. The time for the network to confirm validity and execution of a payment ranges from 10 *minutes* to several weeks, depending on load (whereas credit cards confirm in about 10 *seconds*). And any more.
Would the SEC authorize an ETF whose portfolio is to consist exclusively of shares of a taxi company whose services are restricted to getaway rides for bank robberies? Or of a construction company that specializes in secret tunnels under the Rio Grande? Or of a shipping company whose fleet is a dozen pocket submarines plying the Colombia-Florida route?
Bitcoin Is a Huge Ponzi Scheme
Bitcoin is widely and loudly promoted (even by GBTC and its founding investors) as an investment instrument, a better alternative to stocks, bonds, and gold. However, Bitcoins are quite unlike gold, because they have no consuming demand: uses that would take them out of the market in an essentially permanent basis (like jewelry and industry do with gold). Thus they don't have the intrinsic value that gold, like any commodity, has. Bitcoins are also quite unlike stocks, because there is no source of revenue (like the clients of a company) that will return to the holders of Bitcoins a single penny of their investment, in any form or by any means. And they are unlike bonds, because there is no entity that has any obligation to redeem those coins, at any future time and for any predefined price.
The only way for a Bitcoin investor to recover his investment, let alone make a profit from it, is by selling the coins to another investor. Thus Bitcoin perfectly fits the definition of Ponzi scheme, as given in dictionaries and by the SEC itself:
"A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors."
In fact, Bitcoin is not just a zero-sum con game, as the definition implies. The operators of the network (the so-called "miners") are still issuing new coins, about 900 per day, which they sell to investors. Thus Bitcoin investors, as a whole, are losing money -- about 40 million USD every day. From 2009 to the present, it is easily calculated that all the people who ever bought any Bitcoins have spent at least 20 billion USD more buying than they received selling. Since there is no other source of money in the game than the investors themselves, that net loss (half of which accumulated in the past two years) cannot ever decrease. As long as Bitcoin will have a positive market price, that loss is mathematically guaranteed to increase.
The main losers of the Bitcoin Ponzi are estimated to be several million believers, mostly with low or no income, who keep "investing" their savings and spare money into this "revolutionary asset", believing that they are getting richer -- when actually, as in any Ponzi, they lost their money the moment they "invested" it. But there are a few winners, who, having bought hundreds of thousands of coins many years ago, have now became *really* rich --billionaires even -- by taking the money of those victims.
Would the SEC authorize an ETF whose portfolio is defined to consist only of lottery tickets, or slots in an investment pyramid, or franchises of an MLM fraud, or shares of a penny stock that is being pumped up and sold to pensioners through email spam?
Conclusion
Bitcoin does not provide any benefits for society; on the contrary, it has caused enormous damage; and this balance cannot ever improve, because the technology is inherently wasteful, impractical, illegal, and insecure.
By logic, the SEC should assert its regulatory authority over ALL cryptocurrencies (since they do tick all the boxes of the Howey Test), then ban the sale and promotion of Bitcoin and any derivative financial instruments, and criminally prosecute its operators, sellers, promoters, brokers, exchange operators, and all those who have profited from it -- just as they have historically done with the participants of other Ponzi schemes. The US is indeed losing its lead on "blockchain technology", "decentralized finance", and "Web 3.0" to China -- because China already banned all that toxic financial scam-fest, while the US still did not.
I understand the operational and political obstacles that currently prevent the SEC from taking this very necessary course of action. But, at the very least, the SEC should clearly warn the public about the inherent Ponzi and money laundering nature of Bitcoin; and state clearly that any proposals for securities that are in any way based on Bitcoin will be henceforth rejected ipso facto, without further analysis or discussion.
Sincerely,
Jorge Stolfi
Ph. D. in Computer Science, Stanford University, 1988
Full Professor, Computer Science Institute of the
State University of Campinas (UNICAMP), Brazil
PS. I should note that, while I am not a citizen or resident of the US, the decisions of the SEC will strongly affect my country, because our financial regulators generally follow the examples and policies of their US counterparts. In particular, they are unlikely to take any action against the cryptocurrency plague as long as the SEC continues to ignore it. That is why I feel compelled to contribute this response to your request for comments.
Here's another essay on why bitcoin is such a joke https://www.stephendiehl.com/blog/complete.html
Please DO NOT authorize the Grayscale bitcoin ETF. The reasons why you rejected previous ETF proposals are still valid and should be sufficient to deny this one (and any future ones) as well.
But if you need any other reasons:
Bitcoin Is a Tool of Crime
Bitcoin's only significant use as money and payment system is as a money laundering tool for criminals. It alone created the epidemic of ransomware, a virtually unknown form of attack that has now become the major form of cybercrime, globally and in the US:
From this article:
"A 2017 report from Cybersecurity Ventures predicted ransomware damages would cost the world $5 billion (USD) in 2017, up from $325 million in 2015 — a 15X increase in just two years. The damages for 2018 were predicted to reach $8 billion, for 2019 the figure was $11.5 billion, and in 2021 it’s $20 billion — which is 57x more than it was in 2015."
Bitcoin has also allowed the existence and flourishing of the the so-called "dark markets", notably the drugs-by-mail sector, which has caused thousands of excess deaths by fentanyl and fentanyl-laced heroin overdoses among teenagers.
From this recent article:
"Two-thirds of the approximately 70,000 overdose deaths in the U.S. in 2017 involved an opioid, according to the U.S. Centers for Disease Control and Prevention. Overdose deaths involving the drugs have increased almost sixfold during the past two decades. ... The DEA official said estimates of illicit transactions, including for drugs, conducted in bitcoin reach $76 billion annually ... 'Now, it’s more prevalent than before. [said police Sgt. Joshua Lee of the Mesa, Arizona] Bad guys are realizing they’re less likely to get caught if they move stuff to the dark web.'"
In these roles, bitcoin has taken the place of the defunct rogue a replacement for the defunct internet "criminal bank" Liberty Reserve, for the same reason: it is the only available internet payment system that totally ignores KYC/AML laws. For this same reason, thousands of other commercial and investment frauds have chosen to use bitcoin as the payment method. While some law enforcement agencies may have grown fond of Bitcoin, because they got tracing tools that let them catch small criminals with little effort, the vast majority of the perpetrators of Bitcoin-enabled crimes go unsolved and unpunished.
In contrast, Bitcoin has failed to gain any acceptance as a currency or payment system for legal commerce or other legal economic activity, in spite of 10 years of intense promotion towards that goal. That is not surprising once one learns that it is absolutely awful at those roles, in all aspects. Its value is way too volatile to use as money, often varying by more than 10% in a matter of minutes. Its network is *inherently* expensive to operate, currently consuming more than 50 USD of electricity per transaction processed. The time for the network to confirm validity and execution of a payment ranges from 10 *minutes* to several weeks, depending on load (whereas credit cards confirm in about 10 *seconds*). And any more.
Would the SEC authorize an ETF whose portfolio is to consist exclusively of shares of a taxi company whose services are restricted to getaway rides for bank robberies? Or of a construction company that specializes in secret tunnels under the Rio Grande? Or of a shipping company whose fleet is a dozen pocket submarines plying the Colombia-Florida route?
Bitcoin Is a Huge Ponzi Scheme
Bitcoin is widely and loudly promoted (even by GBTC and its founding investors) as an investment instrument, a better alternative to stocks, bonds, and gold. However, Bitcoins are quite unlike gold, because they have no consuming demand: uses that would take them out of the market in an essentially permanent basis (like jewelry and industry do with gold). Thus they don't have the intrinsic value that gold, like any commodity, has. Bitcoins are also quite unlike stocks, because there is no source of revenue (like the clients of a company) that will return to the holders of Bitcoins a single penny of their investment, in any form or by any means. And they are unlike bonds, because there is no entity that has any obligation to redeem those coins, at any future time and for any predefined price.
The only way for a Bitcoin investor to recover his investment, let alone make a profit from it, is by selling the coins to another investor. Thus Bitcoin perfectly fits the definition of Ponzi scheme, as given in dictionaries and by the SEC itself:
"A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors."
In fact, Bitcoin is not just a zero-sum con game, as the definition implies. The operators of the network (the so-called "miners") are still issuing new coins, about 900 per day, which they sell to investors. Thus Bitcoin investors, as a whole, are losing money -- about 40 million USD every day. From 2009 to the present, it is easily calculated that all the people who ever bought any Bitcoins have spent at least 20 billion USD more buying than they received selling. Since there is no other source of money in the game than the investors themselves, that net loss (half of which accumulated in the past two years) cannot ever decrease. As long as Bitcoin will have a positive market price, that loss is mathematically guaranteed to increase.
The main losers of the Bitcoin Ponzi are estimated to be several million believers, mostly with low or no income, who keep "investing" their savings and spare money into this "revolutionary asset", believing that they are getting richer -- when actually, as in any Ponzi, they lost their money the moment they "invested" it. But there are a few winners, who, having bought hundreds of thousands of coins many years ago, have now became *really* rich --billionaires even -- by taking the money of those victims.
Would the SEC authorize an ETF whose portfolio is defined to consist only of lottery tickets, or slots in an investment pyramid, or franchises of an MLM fraud, or shares of a penny stock that is being pumped up and sold to pensioners through email spam?
Conclusion
Bitcoin does not provide any benefits for society; on the contrary, it has caused enormous damage; and this balance cannot ever improve, because the technology is inherently wasteful, impractical, illegal, and insecure.
By logic, the SEC should assert its regulatory authority over ALL cryptocurrencies (since they do tick all the boxes of the Howey Test), then ban the sale and promotion of Bitcoin and any derivative financial instruments, and criminally prosecute its operators, sellers, promoters, brokers, exchange operators, and all those who have profited from it -- just as they have historically done with the participants of other Ponzi schemes. The US is indeed losing its lead on "blockchain technology", "decentralized finance", and "Web 3.0" to China -- because China already banned all that toxic financial scam-fest, while the US still did not.
I understand the operational and political obstacles that currently prevent the SEC from taking this very necessary course of action. But, at the very least, the SEC should clearly warn the public about the inherent Ponzi and money laundering nature of Bitcoin; and state clearly that any proposals for securities that are in any way based on Bitcoin will be henceforth rejected ipso facto, without further analysis or discussion.
Sincerely,
Jorge Stolfi
Ph. D. in Computer Science, Stanford University, 1988
Full Professor, Computer Science Institute of the
State University of Campinas (UNICAMP), Brazil
PS. I should note that, while I am not a citizen or resident of the US, the decisions of the SEC will strongly affect my country, because our financial regulators generally follow the examples and policies of their US counterparts. In particular, they are unlikely to take any action against the cryptocurrency plague as long as the SEC continues to ignore it. That is why I feel compelled to contribute this response to your request for comments.
Here's another essay on why bitcoin is such a joke https://www.stephendiehl.com/blog/complete.html
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