> I do not understand how every time cryptocurrency comes up armchair HN users come along and comment when they, very apparently, have almost no understanding of the topic
This in itself is a meme - "All criticism is ignorance!"
Bitcoin is not a ponzi or a pyramid scheme, that's true, but it has aspects of both, with its declining emission and stacked rewards for early adopters.
And Bitcoin is for settlement now is it?
That's interesting, and a massive deviation from its original intent (see the white paper) as well as all the other purposes it's been ascribed over the years.
The truth is that bitcoin is an instrument of speculation. Little else.
> The Nakamoto Scheme is an automated hybrid of a Ponzi scheme and a pyramid scheme which has, from the perspective of operating a criminal enterprise, the strengths of both and (currently) the weaknesses of neither.
I think poker or another form of gambling is a good analogy. In my opinion, the article tries to construct a pretty strained analogy by listing all the myriad ways Bitcoin isn't like a Ponzi scheme or a pyramid scheme - which is what makes it so ingenious as a Ponzi-pyramid-scheme!, apparently.
It clearly does share aspects of Ponzis and pyramids, but, unfortunately, so do plenty of other things, like many companies' stocks. That doesn't necessarily make those companies fraud-schemers, though. That's just what speculation is. You can try to frame all speculation as a pyramid scheme, but I think it's a stretch. I personally dislike gambling and speculation (and finance in general), but there's still a distinction between speculation and scamming.
That said, of course in addition to this, lots of other cryptocurrencies/tokens are full-on fraud schemes. If you count all tokens (which anyone can make and sell in like an hour - many are being created daily), then > 99% of it probably is. In my opinion, all these scam tokens are very similar to malware. (And often are also literal malware, because many scam tokens are implemented as malicious/backdoored smart contracts.)
There are absurd amounts of malware variants created daily. It's easy for a single person to create dozens of malware variants or dozens of scam tokens in a day. If you're going by number of distinct software hashes, it could very well be that > 99% of all software is malware.
I certainly get why people are a tiny bit wary of an ecosystem that's > 99% fraudulent in terms of percentage of distinct assets. > 99% of activity on Tor is also likely illegal or malicious in some way. (There are some studies indicating this.) That doesn't mean I want a government to ban cryptocurrencies or ban Tor, and have police "raid Bitcoin meetups", as this author suggests in the article. Tor, Bitcoin, and especially some other cryptocurrencies have interesting technology to offer. I'd rather there be an attempt to address the externalities in a less crude way than just a blanket ban that makes the technology illegal.
> The truth is that bitcoin is an instrument of speculation. Little else.
I actually agree. Bitcoin has failed. It's useless as a coin. New coins have been created to address its shortcomings. Monero seems to be the closest one to the original cryptocurrency dream of decentralized and private currency. Despite this, bitcoin is still king and there seems to be no way to dethrone it.
Bitcoin “dies” like bubbles do, after a peak it can’t recover from people stop thinking of it as an investment.
Tulip mania didn’t kill off Tulip farming, and even a 99.9% crash won’t kill Bitcoin. It simply returned things to the fundamental value proposition amid significant competition. In theory Bitcoin could win in a direct head to head competition, though it seems unlikely that the first coin got everything correct and was never improved upon.
> This in itself is a meme - "All criticism is ignorance!"
No, as I pointed out to the OP I was appreciative of his reasoned criticism because for years the top comments say things like, "Bitcoin is a ponzi; bitcoin is used only for illegal activity; Bitcoin failed." All wrong, and the only way I learned those were wrong was by understanding it and learning from smart people who are involved in the industry.
> The truth is that bitcoin is an instrument of speculation.
Public companies have no business speculating except for R&D. By claiming it is an "instrument of speculation" you are claiming they are not living up to their fiduciary duties? And what sort of speculation has gone on for 11 years?
> And Bitcoin is for settlement now is it?
Yep. That's where it is currently headed. Could change, never know (edit: what I mean here is Bitcoin devs/miners could change/adopt the software so it works more like a currency). Brian Chesky, CEO of AirBnB, insisted breakfast be served at all AirBnBs. He was wrong. Didn't matter. Some original Bitcoin adopters, particularly Hal Finney, noted early on that Bitcoin could end up being more of a store of value than currency. Even if buying a coffee with Bitcoin directly doesn't make sense, the spirit of the original paper in wake of the 2008 crisis is still alive and well.
There are serious, devastating critiques of Bitcoin. There are no serious rebuttals to those critiques, but plenty of people "involved in the industry" are making a lot of money from BTC, so it's no surprise they've convinced themselves it's fine. I guess they suckered you in too.
This in itself is a meme - "All criticism is ignorance!"
Bitcoin is not a ponzi or a pyramid scheme, that's true, but it has aspects of both, with its declining emission and stacked rewards for early adopters.
And Bitcoin is for settlement now is it?
That's interesting, and a massive deviation from its original intent (see the white paper) as well as all the other purposes it's been ascribed over the years.
The truth is that bitcoin is an instrument of speculation. Little else.