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Bitcoin Fraud

Arthur Hanson

Well-known member
Sometimes the tech sector is great at pushing a fraudulent argument and Bitcoin has the worst. The proponents of this computer generated number is that there is a limited number of Bitcoin unlike money that is just printer. This argument leaves out the fact that Bitcoin can be split infinite times which is the same as printing more money. I have not heard a single time on the financial channel or financial publications bringing up this point and I pay attention to many. Reminds me of the Dutch Tulip Bulb Craze, it works until it doesn't, but the larger it gets, the worst the ramifications will be. Comments and thoughts appreciated. This is a world semis and memory created.
 
Yes, crypto currencies like Bitcoin are pure fiat, having no intrinsic value and backed by no government treasury. It was just reported on BBC that crypto currencies are bad for the environment, consuming 121.36 terawatt-hours (TWh) per year, more than the entire electricity consumed in Argentina. Crypto currencies are simply not sustainable, both economically and from an energy viewpoint.
 
Respectfully disagree. Bitcoin is the new gold but it will be a small part of the crypto economy going forward. New applications like decentralized finance are emerging and once scaling issues are addressed we will start seeing more tokenized apps. I think blockchain is the most important technology trend since the internet.
 
Respectfully disagree. Bitcoin is the new gold but it will be a small part of the crypto economy going forward. New applications like decentralized finance are emerging and once scaling issues are addressed we will start seeing more tokenized apps. I think blockchain is the most important technology trend since the internet.

Government treasury backing does not mean what it used to:

 
Government treasury backing does not mean what it used to:

Value fraud in almost everything will always be with us. As a fraud degenerates, it hurts the people on the bottom of the stack first, then the lower end of those involved and then everyone involved or not as the damage explodes like an economic bomb hurting everyone and everything. In this covid crisses, many, many are taking advantage of the situation from politicians, to companies to every day people. In this crisis, I have seen few guiding lights, but a few are there. I feel the tech sector will be one, on the whole that helps people the most.
 
This is technically false. You cannot transfer infinitely small units, the smallest amount transferable is 1/100,000,000.

I mean no offense, but if you haven't found this information in the channels you monitor, they are extremely uninformed/misinformed. You would be better off looking for informed sources, and admittedly there is much ignorant evangelism to wade through. I would be happy to point you to sources of information I find to be the least biased if you wish.

The only way to make Bitcoin subdivide further is to change software, which only works through consensus, which is the purpose and innovation of Bitcoin. If you think that you can simply do this yourself, you should read the Bitcoin white paper. You cannot.
 
I read above :

"Bitcoin is the new gold"

No ! If I may.

And that is the whole problem : There is no intrinsic value in a "coin of Bit".
While a coin of gold conveys its own intrinsic value (albeit fluctuant).

The value of the tremendous amount of energy required to "mine" this coin of Bit does not get incorporated subsequently into the coin. The value is simply burnt and gone.

The analogy with gold simply does not apply, except romantically, as an allegory.
 
The problem with blockchain is that if there is no trust it doesn't scale (hence the amount of time to confirm a Bitcoin transaction, and electricity used), and if there is trust there are more efficient ways of implementing a distributed ledger.
 
Bitcoin has persistence, it has value, & it is not gold, so we are way past the 'tulips' analogy at this stage.

That said bitcoin & the blockchain are not the sole foundation to the world of disintermediation & decentralised finance (and other things) we are heading into, as there are many other technologies and people who will play their part in that.

We are living thru the time of covid, our world is changing in ways we cannot comprehend & will not be fully understood until you can look backwards at it. In that context it is wise to look closer at things that make you uncomfortable & not to dismiss them through the prism of the past.
 
I'm not sure I understand the gold analogy. The currency we all use is entirely fiat as well, and it's debatable if gold has been relevant to currency at any point during the last century. Trying to discern whether or not it IS relevant seems to lead one down a lot of murky dead ends.

The purpose of the gold standard was to provide a fixed exchange rate, and as the major nations began to abandon it during the 20th century its significance waned dramatically in the global economy.

It was just reported on BBC that crypto currencies are bad for the environment, consuming 121.36 terawatt-hours (TWh) per year, more than the entire electricity consumed in Argentina. Crypto currencies are simply not sustainable, both economically and from an energy viewpoint.

This is rather simplistic IMO. The energy consumption of Bitcoin by itself is meaningless. Using energy is not 'bad for the environment'.

Are we comparing it to the energy used to operate the current monetary system? It's probably worth doing, and extremely difficult as it's unclear what constitutes supporting the current system. Banks, vaults, armored vehicles, however many buildings, servers, and employees (let's just round this down to assets of purely financial institutions), and then we have to figure out how much of the US dollar value (leaving out others) is attributable to oil and war.

Stopping there, it needs to be pointed out that in spite of all of that, Bitcoin could be powered entirely on renewable energy (and a lot of it currently is) tomorrow. The fact that it is not is a discussion of game theory which opens us up, once again, to the true innovation of the Nakamoto Consensus algorithm. It exposes incentives better than traditional currencies, as it is much more nakedly a function of energy production and consumption, and much more flexible in terms of selecting an energy source, similar to a battery powered vehicle.

The traditional systems of currency (gold included) are fundamentally secured by guns, germs, and steel, whereas Bitcoin is fundamentally secured by Mathematics.

I'm not proposing Bitcoin maximalism, but my suspicion echoes that of someone who noted that cryptocurrencies are currently still a nascent technology in a similar place to where the internet was in 1992.
 
Gold is functionally nearly useless, aside from very few niche industrial applications that consume just a tiny fraction of supply. The reason it has value is because we've collectively agreed as a society that it has value. Fiat is the same, it has value by government decree, not because it's intrinsically worth anything. That's the analogy. Bitcoin, while functionally useless, has value because the ecosystem assigns it value. Beyond that it has all the properties of hard money.

I look at Bitcoin as playing the function of gold within the nascent crypto economy. For those not paying attention, there is a whole other parallel economy emerging in blockchain. We are starting to see the emergence of blockchain powered applications which are tokenized, and there is a decentralized finance system that allows these blockchain applications to interact with each other.

There is real value that is starting to be created through these applications. As an example one can look at Chainlink, which has been recently adopted by Google to provide pricing information to smart contracts.


My belief is that in the future, the majority of economic activity will be conducted over the blockchain via interaction with smart contracts. Bitcoin will be a form of collateral backing these smart contracts, just like gold is a form of collateral that governments historically used to back their fiat. While this might seem pretty out there as an idea right now, I think the idea that the majority of economic activity would be conducted over the internet would have been a pretty out there idea 30 years ago.
 
I get the "cryptic" technology. But one logic I am struggling with is why do central banks allow decentralized finance going around with risks unknown, isnt the bitcoin asset controlled by a small amount of people which could imply financial risks?
 
I get the "cryptic" technology. But one logic I am struggling with is why do central banks allow decentralized finance going around with risks unknown, isnt the bitcoin asset controlled by a small amount of people which could imply financial risks?

You can't regulate math. There is no real way to stop people from participating in decentralized finance short of banning all cryptocurrency, which itself isn't feasible.
 
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