blue origin or spacex is going to send a rocket up there and comeback with a pile of literal bitcoins, in a treasure chest. Then we will fly to Mars and live there with the money we make from collecting bitcoins from space.
Everything about this is hype. Everytime I hear someone talking about bitcoin, I squint my eyes and think, I don't think you know what you are saying. This is another case of that for sure.
"Blockstream Inc. plans to make the digital ledger underpinning the cryptocurrency accessible via satellite signal so people without Internet access, or in places where bandwidth is expensive, can trade and mine bitcoin."
Can somebody ELI5 how cryptocurrencies don't run afoul of Ponzi scheme laws? The only way the price can be going up is if new money is coming in constantly, right?
Gold and diamonds have industrial uses and so some inherent value (even if a seller's cartel in both cases overinflates them). Fiat currencies are backed by big militaries, which, again, is an inherent value.
Western Union can do this, too. Even into a lot of regions where nearly nobody has internet access. Depending on the state of the Bitcoin network, sometimes also cheaper than Bitcoin.
As someone who has used Western Union and ended up in money-trail hell, I can tell you with complete confidence that Western Union and their ilk are huge pains in the butt and charge too much for their overly complex "service".
Sure, you need to get money into bitcoin and then out in order to take advantage of that property, but the ability to do that is getting easier and cheaper all the time.
Hey now don't sell Ethereum so short. IMO it's the real transformative platform for blockchains. It isn't just the features of Ethereum, which can be easily cloned, it's the massive and growing community around it already building exciting new products/services.
Bitcoin already has proven valuable properties. The question now is whether or not the future flushed out value it brings is higher, or lower, than the current market price. There's a lot of unknowns which is why at this time it is a speculative investment.
Make no mistake though, bitcoin is already valuable as a value store, especially for wealthy individuals who live in countries not quite as stable as the US. It also has a place as a convenient high risk investment at the high risk end of any investors portfolio who is looking to increase their risk adjusted return.
Bitcoins inherent value is utility. It facilitates things that were difficult or impossible before it existed. It allows you to transact online without middleman businesses. It allows quick, easy, and cheap international transactions. It allows you to not need a bank. It allows you to transact anonymously (if you do it right). Plus many more applications that have yet to be revealed.
The stock trading value of gold is a pyramid scheme, of course. Gold, the metal, is not.
Since bitcoin is just the currency, it has no intrinsic value besides its pyramid scheme.
Fiat money isn't a pyramid scheme. You don't buy in on the assumption of future market growth that will drive up the value of what you have. You expect your fiat to become worth less, not more, over time.
And Bitcoin is more "pyramidy" than other things because of how its coin creation algorithm worked. It halves every four years, so 16.5m of 21m bitcoin total ever to be made already exist. Early adopters got huge sums of cheap coin, while later entrants find the coin creation rates are slower and the price is magnitudes higher.
Nothing precludes us having "breakout" means to increase the total market supply of things thought scarce right now. We could discover a way to synthesize gold cheaply that crashes the market, or we find space mining is a really lucrative source of gold. Suddenly the world gold supply gets a lot larger, and the price drops a lot in response.
Bitcoin would require a major breaking and forking change to the algorithm to change the coin payout algorithm. And that kind of change hurts the people who have the bitcoin now, whose voice is what determines the canonical blockchain. They would never accept it unless the pyramid behavior of the current algorithm crashes the bitcoin economy.
>Fiat money isn't a pyramid scheme. You don't buy in on the assumption of future market growth that will drive up the value of what you have. You expect your fiat to become worth less, not more, over time.
Wow, so if bitcoin is or isn't pyramid scheme depends on your assumption when you buy it? That's a new one. Than i guess I'm safe because i bought it to buy goods with it, never expected that price will soar so much.
You buy goods with bitcoin by converting it to usd. Nothing is priced (at least for extended lengths of time) in bitcoin, because of the price voltaility, because of the pyramid scheme.
And yes, your perception of the value of something does influence whether or not it is a pyramid scheme. If you buy 10,000 scented soaps because you want a ton of scented soap that isn't a pyramid scheme. If you buy 10,000 scented soaps thinking you can find 1,000 people to buy them off you at more than you paid for them, then you are dealing with a pyramid scheme.
Fundamentally, the price growth most bitcoin users (you would be in the minority) want depends on a definitional pyramid scheme of attracting new money to drive up the price of bitcoin. It isn't even debatable - the coin minting model of btc that declines over time directly maps to how to run a pyramid scheme on it, where early adopters get the most return.
Most IPOs are pyramid schemes. The stock traded price of gold is a pyramid scheme. Any system where you participate on the assumption of scarcity going up, and thus your piece becoming more valuable on the backs of new entrants to the market is a pyramid scheme.
> If you buy 10,000 scented soaps thinking you can find 1,000 people to buy them off you at more than you paid for them, then you are dealing with a pyramid scheme.
I'd argue that is run-of-the-mill wholesale / retail sales.
Expecting to make a profit doesn't cause a thing to be a pyramid scheme.
There is a distinction between pyramid schemes and ponzie / multi-level marketing schemes. Pyramid schemes aren't implicitly bad - they just mean the last "ladder rung" of the pyramid will lose on the promise of the scheme while anyone who got in before the last profit.
You expect to make a profit on the foundational principles of pyramid schemes. Someone will eventually, inevitably, have to not make a profit because the market of bitcoin will be fully saturated. At which point the value of bitcoin has to be reconsidered - it no longer would be poised to grow through increasing scarcity, so it would need to derive value through other measures.
Whether that happens in a year or a century is the gamble.
Well, in a nutshell, it's not a Ponzi scheme, which is not just a random slur you can fire at anything that vaguely seems like fraud, but a specific scheme that works in a specific way.
In particular, it isn't clear to me how you can have a "decentralized" Ponzi scheme without making it something fundamentally different from a Ponzi scheme.
To the extent that BitCoin may be fraudulent or people may be engaging in illegal behavior, it's going to be other things. Perhaps somewhere someone's even running an actual Ponzi scheme using BitCoin. But BitCoin itself is not a Ponzi scheme.
Current bitcoin holders can only see gain if new "investment" (I find that term funny since it's a "security" with no fundamentals) comes in. That's pretty much the definition of a Ponzi scheme.
Perhaps somewhere someone's even running an actual Ponzi scheme using BitCoin.
Sure, but that's a different question. I'm talking about new investment in a security being the only source of increased value in that security. Which is what a Ponzi scheme is.
But what makes something a currency? If in an alternate universe Bernie Madoff printed MadoffBucks and made agreements that you could use these as currency in some online stores and Pizza Hut, does that make it a real currency? Unfortunately I think the only way something becomes a currency is when a government calls it one.
It may not be a currency, depending how you choose to define that word, but it is certainly a fungible asset and a means of exchange. It acts both as a store of value and as method of transferring value from one party to another.
>Current bitcoin holders can only see gain if new "investment" (I find that term funny since it's a "security" with no fundamentals) comes in. That's pretty much the definition of a Ponzi scheme.
Equally true of most other commodities and currencies, right?
If you have a gold bar, or a stack of 10 Euro notes, the only way you make money off of it is if enough more people want to buy gold/Euros that the price goes up. Neither asset does anything on its own.
Equally true of most other commodities and currencies, right?
No; if I hold a stock I receive a dividend from the company and a vote in their governance; if I hold a bond I receive interest payments; if I hold bauxite I can use it to make whatever you make with bauxite.
The price of a traded item can go up, even with no investment: people do not have to trade for the price to increase or decrease. Sometimes price movements coincide with lots of actual trades occurring, and sometimes they coincide with very few/no trades occurring. The latter happens once in awhile.
Taken to the extreme to illustrate: if everyone together today instantly decided each bitcoin was worth $1b, then in that first instant, nobody would sell and no trades would occur, but the price would be very different.
1. There is more than one way to measure 'price,' and
2. 'willing to buy' and trades executed are two different things.
If you are measuring the price of bitcoin by looking at the price of the last trade that occurred, then you are right: trades need to happen for you to get price information.
But there is also the order book. In [1], thousands of 'intents to trade'/outstanding orders are displayed but no trades are listed.
When I looked at the page, the highest anyone was willing to buy (in this specific order book at this time) was $4076, and the lowest anyone would sell was $4086.
This is a good indicator of the current consensus on Bitcoin price but isn't actually trade data.
Now, let's say the market gets just a little more bullish on Bitcoin and someone places an order to buy at $4080. Has the price of Bitcoin changed? One could argue yes if you judge price from the order book: from ~$4081 to ~$4083 or so. But no trades have occurred.
So back to the original question: in the absence of trade data, the price of bitcoin can be seen from what everyone decides it is, via an order book.
The definition of ponzi scheme is a scheme where dividends to early investors are paid using the investments of later investors. That's a significant difference from simply an appreciation in value. By your logic, precious metals could also be ponzi schemes.
Are you saying the silver market behaved as a Ponzi scheme?
No. A person was using the silver market as a ponzi scheme vehicle, it doesn't mean the silver market itself was a ponzi scheme.
Same as Bitcoin here. A devious actor could use Bitcoin as the product for a ponzi scheme, that doesn't mean bitcoin is a ponzi scheme as much as the tulip bulb market itself is a ponzi scheme.
> Current bitcoin holders can only see gain if new "investment" (I find that term funny since it's a "security" with no fundamentals) comes in. That's pretty much the definition of a Ponzi scheme.
That's 1/2 a Ponzi scheme, the other 1/2 is an entity promising you a return. I think you'd need to commit some fraud along the way too. If someone said "For every 5 dollars given to me, I will provide a share, and dispense 1/(2*N) dollars to all other shareholders, where N is the number of other shareholders (N=0 for the first donation, 1 for the second, etc)." Would that be a Ponzi scheme? There's no fraud, so I don't think it would be, despite having identical mechanics.
"I'm talking about new investment in a security being the only source of increased value in that security. Which is what a Ponzi scheme is."
That is not a Ponzi scheme. A Ponzi scheme is giving someone payouts on their investment funded solely from people putting the money in, while fraudulently telling them that the money is coming from real investment. You can't have a Ponzi scheme when on average both sides of the transaction are (generally) aware of the situation and aware of how the value is flowing, because you lack the fraudulent aspect. Also, for any given transaction, value is flowing instantaneously; when someone sells their bitcoin, they aren't getting paid in funds being fraudulently kept aside from somebody else's previous purchases. It's an instant commodity exchange.
Again, in a nutshell, the reason why this doesn't fall afoul of laws against Ponzi schemes is that it simply isn't one.
> Well, in a nutshell, it's not a Ponzi scheme, which is not just a random slur you can fire at anything that vaguely seems like fraud, but a specific scheme that works in a specific way.
Please explain. How is Bitcoin not a Ponzi scheme? It checks all boxes:
- No immediate value, nothing in Bitcoin has worth outside of it. No IP, no machines, no added value to society
- Old investors get paid exclusively by new investors (buy at $500, sell at $3,000)
- Heavy marketing by old investors through promises of extreme gains ("if you bought in 2011, you'd have made 10,000% gains right now!")
People often get confused between Ponzi schemes and pyramid schemes. Bitcoin could be described as a pyramid scheme in that it relies on new money constantly coming in so that people who previously committed money can cash out.
They "may," Bitcoin doesn't. From the source of that quote:
>They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public
By contrast Bitcoin profits are based on the real investment in Bitcoins, which are really sold to the public. They go on:
>Pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public. Some schemes may purport to sell a product, but they often simply use the product to hide their pyramid structure. There are two tell-tale signs that a product is simply being used to disguise a pyramid scheme: inventory loading and a lack of retail sales. Inventory loading occurs when a company's incentive program forces recruits to buy more products than they could ever sell, often at inflated prices. If this occurs throughout the company's distribution system, the people at the top of the pyramid reap substantial profits, even though little or no product moves to market. The people at the bottom make excessive payments for inventory that simply accumulates in their basements. A lack of retail sales is also a red flag that a pyramid exists. Many pyramid schemes will claim that their product is selling like hot cakes. However, on closer examination, the sales occur only between people inside the pyramid structure or to new recruits joining the structure, not to consumers out in the general public.
It notes "lack of retail sales is also a red flag that a pyramid exist". What percentage of Bitcoin sales involve actual transactions of goods or services and not just a speculative investment? The price of Bitcoin has gone up some 2000% in the last two years when it simultaneously seems harder to spend when companies like Dell have stopped accepting it. It certainly seems like Bitcoin shows a lack of retail transactions.
I can't say why they don't run afoul of the laws, but my realization of value of a system was due to Bitcoin. For Bitcoin to have 'monetary (dollar) value' people have to exchange 'real money' for them, putting monetary value into the system. This money becomes the pool of money or value that the system has; Ponzi schemes require that new users are providing the cash to pay the old users, but a ponzi seems for early users to be about constant guaranteed return. There is no guarantee that a whale won't take their holding out of BTC, but that's their choice, not a requirement of BTC, even though the new users (investors) are providing that cash.
The more people who find bitcoin useful for settling transactions, the higher the short-term value there is in bitcoin. Sustain this long enough with enough people, and you have long-term high-value. It's useful as a currency, nothing Ponzi about it.
That's not how it works. The price is set on an exchange by supply and demand like any market.
If bitcoin owners hold their supply, and buying interest mounts, the price will go up until an equilibrium between buyers/sellers is met (the "market price").
It's really no different from the stock market, except the asset is different. For the stock market the asset is company ownership, in the crypto market the asset is the cryptocurrency. Cryptocurrency has value, frankly, because it has valuable properties. Currently as a convenient value store (think of Chinese investors storing wealth digitally instead of in NYC/Vancouver real estate), but the technology is developing so there's a lot of speculation that it could have further values we haven't discovered yet. The fact that investors are speculating on unknown future valuable properties of the tech instead of known cash flows is what makes crypto investing high risk - if the tech ends up truly being transformative then early investors will win big, if not then expect a bloodbath.
A price is set when a buyer and seller agree on a price. If all sellers want a high price, then the price will be high.
The bitcoin price is rising as much because current holders would rather hold as because buyers are willing to pay more than they were in the past.
A Ponzi scheme promises a return, and uses new money to fund returns to existing investors. Cryptocurrencies themselves make no such promise -- those buying with intent to sell in the future are buying with the belief that the future price will be higher, but such a reality is hardly certain.
bitcoin was created to be a deflationary currency that couldn't be regulated, the market deciding the price is a feature not a bug, not everyone agrees with their local monetary inflationary policy and bitcoin provides an alternative store of value, cypherpunks think cryptography and math should run things and the the us stock market is the real bubble
No, if they were launching a rocket full of Hard Drives with bitcoin wallets on them it would be literal. They aren't adding anything that my partents aren't gettin out in rural USA with their current satalite internet. (remindes me, need to pay my dial up bill before I go out there next week)
As long as a copy of the Blockchain is on the satellite (which seems likely given the mission) then the headline is accurate.
It could just be a bent pipe comm satellite, which would make the headline mostly inaccurate, but it seems like having a copy of the blockchain on the bird would be a big win. A lot of the queries could be completed without having to bounce back to the ground if a copy of the blockchain was available on the satellite.
There is no copy of the blockchain on the satellite. These things are just repeaters for the signal sent up from a teleport station, presumably owned by Blockstream.
Aren't there better ways to broadcast the data? Say using SMS services which seem already quite used by farmers in remote places [1].
Also it's unclear how people in these remote places will acquire their first bitcoins.
What I like about Bitcoin is the way that the tokens are distributed (via PoW currently).
If there was a way to distribute a new cryptocurrency, somewhat fairly, within these remote places that have no internet, and let them bootstrap their own economy, now that would be cool.
For these places what is needed is a sort of an "offline cryptocurrency". They don't care about sending 5 btc to the person across town instantly... they care about sending 5 btc to the person in front of them at the market.
Bitcoin is only so valuable because its a pyramid scheme. All the participation and engagement by miners and anyone looking to get rich off it is predicated on how most bitcoins were already made so any market growth translates into increased prices and scarcity for the bitcoin that exists.
This is the fundamental problem with making a cryptocurrency that can actually serve its users well. To get popular, you need to be a get rich quick scheme, but to actually be useful, you need to not deflate out of control forever.
But bitcoin is doing what it was meant to do. It wasn't meant to promote a healthy monetary policy or be a pervasive useful currency to replace the fiats we have now - it would have had a much different coin issuance algorithm / monetary growth policy otherwise. It demonstrated the capabilities of proof of work distributed consensus and made its early adopters ludicrously rich.
not much considering $300 million usd worth of bitcoin was traded with South Korean Won in the past 24 hours compared to wannacry ransom that raised around $50k, exchanges have more influence than ransoms https://coinmarketcap.com/exchanges/bithumb/
The news is so behind actual crypto performance. Shocking, as it's all readily available.
This is like the 10th time the news catches up to a surge only after there's actually been a quick drop (like today. BTC, ETH, LTC all down 5-6% over 24h).
The volatility itself (in crypto) creates amazing short turn-around opportunity for those willing to take some risks and set up basic limit buy/sells (gdax makes this very easy).
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[ 0.71 ms ] story [ 137 ms ] threadEverything about this is hype. Everytime I hear someone talking about bitcoin, I squint my eyes and think, I don't think you know what you are saying. This is another case of that for sure.
https://github.com/Blockstream/satellite
From the article:
"Blockstream Inc. plans to make the digital ledger underpinning the cryptocurrency accessible via satellite signal so people without Internet access, or in places where bandwidth is expensive, can trade and mine bitcoin."
And the website: https://blockstream.com/satellite/
Sure, you need to get money into bitcoin and then out in order to take advantage of that property, but the ability to do that is getting easier and cheaper all the time.
Bitcoin, Litecoin - money transfer
IOTA - micro transactions without fee ( Internet of Things )
Ethereum - contracts
Monero - private, non-traceable transactions
the list is long. 99% percent of these projects will fail, but 1% will create added value to the world.
Make no mistake though, bitcoin is already valuable as a value store, especially for wealthy individuals who live in countries not quite as stable as the US. It also has a place as a convenient high risk investment at the high risk end of any investors portfolio who is looking to increase their risk adjusted return.
Since bitcoin is just the currency, it has no intrinsic value besides its pyramid scheme.
Fiat money isn't a pyramid scheme. You don't buy in on the assumption of future market growth that will drive up the value of what you have. You expect your fiat to become worth less, not more, over time.
And Bitcoin is more "pyramidy" than other things because of how its coin creation algorithm worked. It halves every four years, so 16.5m of 21m bitcoin total ever to be made already exist. Early adopters got huge sums of cheap coin, while later entrants find the coin creation rates are slower and the price is magnitudes higher.
Nothing precludes us having "breakout" means to increase the total market supply of things thought scarce right now. We could discover a way to synthesize gold cheaply that crashes the market, or we find space mining is a really lucrative source of gold. Suddenly the world gold supply gets a lot larger, and the price drops a lot in response.
Bitcoin would require a major breaking and forking change to the algorithm to change the coin payout algorithm. And that kind of change hurts the people who have the bitcoin now, whose voice is what determines the canonical blockchain. They would never accept it unless the pyramid behavior of the current algorithm crashes the bitcoin economy.
Wow, so if bitcoin is or isn't pyramid scheme depends on your assumption when you buy it? That's a new one. Than i guess I'm safe because i bought it to buy goods with it, never expected that price will soar so much.
And yes, your perception of the value of something does influence whether or not it is a pyramid scheme. If you buy 10,000 scented soaps because you want a ton of scented soap that isn't a pyramid scheme. If you buy 10,000 scented soaps thinking you can find 1,000 people to buy them off you at more than you paid for them, then you are dealing with a pyramid scheme.
Fundamentally, the price growth most bitcoin users (you would be in the minority) want depends on a definitional pyramid scheme of attracting new money to drive up the price of bitcoin. It isn't even debatable - the coin minting model of btc that declines over time directly maps to how to run a pyramid scheme on it, where early adopters get the most return.
Most IPOs are pyramid schemes. The stock traded price of gold is a pyramid scheme. Any system where you participate on the assumption of scarcity going up, and thus your piece becoming more valuable on the backs of new entrants to the market is a pyramid scheme.
I'd argue that is run-of-the-mill wholesale / retail sales.
Expecting to make a profit doesn't cause a thing to be a pyramid scheme.
You expect to make a profit on the foundational principles of pyramid schemes. Someone will eventually, inevitably, have to not make a profit because the market of bitcoin will be fully saturated. At which point the value of bitcoin has to be reconsidered - it no longer would be poised to grow through increasing scarcity, so it would need to derive value through other measures.
Whether that happens in a year or a century is the gamble.
In particular, it isn't clear to me how you can have a "decentralized" Ponzi scheme without making it something fundamentally different from a Ponzi scheme.
To the extent that BitCoin may be fraudulent or people may be engaging in illegal behavior, it's going to be other things. Perhaps somewhere someone's even running an actual Ponzi scheme using BitCoin. But BitCoin itself is not a Ponzi scheme.
Perhaps somewhere someone's even running an actual Ponzi scheme using BitCoin.
Sure, but that's a different question. I'm talking about new investment in a security being the only source of increased value in that security. Which is what a Ponzi scheme is.
Exchange rate, also known as 'cost,' is a form of value.
Equally true of most other commodities and currencies, right?
If you have a gold bar, or a stack of 10 Euro notes, the only way you make money off of it is if enough more people want to buy gold/Euros that the price goes up. Neither asset does anything on its own.
A critical ingredient of a Ponzi scheme is fraud.
No; if I hold a stock I receive a dividend from the company and a vote in their governance; if I hold a bond I receive interest payments; if I hold bauxite I can use it to make whatever you make with bauxite.
Taken to the extreme to illustrate: if everyone together today instantly decided each bitcoin was worth $1b, then in that first instant, nobody would sell and no trades would occur, but the price would be very different.
How does simply deciding 1 bitcoin is worth $1b effect the value of bitcoin if no one is willing to buy at that price?
2. 'willing to buy' and trades executed are two different things.
If you are measuring the price of bitcoin by looking at the price of the last trade that occurred, then you are right: trades need to happen for you to get price information.
But there is also the order book. In [1], thousands of 'intents to trade'/outstanding orders are displayed but no trades are listed.
When I looked at the page, the highest anyone was willing to buy (in this specific order book at this time) was $4076, and the lowest anyone would sell was $4086.
This is a good indicator of the current consensus on Bitcoin price but isn't actually trade data.
Now, let's say the market gets just a little more bullish on Bitcoin and someone places an order to buy at $4080. Has the price of Bitcoin changed? One could argue yes if you judge price from the order book: from ~$4081 to ~$4083 or so. But no trades have occurred.
So back to the original question: in the absence of trade data, the price of bitcoin can be seen from what everyone decides it is, via an order book.
[1] https://www.bitstamp.net/market/order_book/
No. A person was using the silver market as a ponzi scheme vehicle, it doesn't mean the silver market itself was a ponzi scheme.
Same as Bitcoin here. A devious actor could use Bitcoin as the product for a ponzi scheme, that doesn't mean bitcoin is a ponzi scheme as much as the tulip bulb market itself is a ponzi scheme.
That's 1/2 a Ponzi scheme, the other 1/2 is an entity promising you a return. I think you'd need to commit some fraud along the way too. If someone said "For every 5 dollars given to me, I will provide a share, and dispense 1/(2*N) dollars to all other shareholders, where N is the number of other shareholders (N=0 for the first donation, 1 for the second, etc)." Would that be a Ponzi scheme? There's no fraud, so I don't think it would be, despite having identical mechanics.
That is not a Ponzi scheme. A Ponzi scheme is giving someone payouts on their investment funded solely from people putting the money in, while fraudulently telling them that the money is coming from real investment. You can't have a Ponzi scheme when on average both sides of the transaction are (generally) aware of the situation and aware of how the value is flowing, because you lack the fraudulent aspect. Also, for any given transaction, value is flowing instantaneously; when someone sells their bitcoin, they aren't getting paid in funds being fraudulently kept aside from somebody else's previous purchases. It's an instant commodity exchange.
Again, in a nutshell, the reason why this doesn't fall afoul of laws against Ponzi schemes is that it simply isn't one.
Please explain. How is Bitcoin not a Ponzi scheme? It checks all boxes:
- No immediate value, nothing in Bitcoin has worth outside of it. No IP, no machines, no added value to society
- Old investors get paid exclusively by new investors (buy at $500, sell at $3,000)
- Heavy marketing by old investors through promises of extreme gains ("if you bought in 2011, you'd have made 10,000% gains right now!")
They absolutely do not, no dividends are paid in Bitcoin by any entity.
Bitcoin's value may rise based on many factors, of which new buyers are only one (not the "exclusive" factor as you claim).
https://news.ycombinator.com/item?id=15020232 , up or down thread a bit.
https://en.wikipedia.org/wiki/Pyramid_scheme
>Pyramid schemes however "may purport to sell a product, but they often simply use the product to hide their pyramid structure".
>They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public
By contrast Bitcoin profits are based on the real investment in Bitcoins, which are really sold to the public. They go on:
>little or no product moves to market
Obviously very different than Bitcoin
https://www.ftc.gov/public-statements/1998/05/pyramid-scheme...
>Pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public. Some schemes may purport to sell a product, but they often simply use the product to hide their pyramid structure. There are two tell-tale signs that a product is simply being used to disguise a pyramid scheme: inventory loading and a lack of retail sales. Inventory loading occurs when a company's incentive program forces recruits to buy more products than they could ever sell, often at inflated prices. If this occurs throughout the company's distribution system, the people at the top of the pyramid reap substantial profits, even though little or no product moves to market. The people at the bottom make excessive payments for inventory that simply accumulates in their basements. A lack of retail sales is also a red flag that a pyramid exists. Many pyramid schemes will claim that their product is selling like hot cakes. However, on closer examination, the sales occur only between people inside the pyramid structure or to new recruits joining the structure, not to consumers out in the general public.
It notes "lack of retail sales is also a red flag that a pyramid exist". What percentage of Bitcoin sales involve actual transactions of goods or services and not just a speculative investment? The price of Bitcoin has gone up some 2000% in the last two years when it simultaneously seems harder to spend when companies like Dell have stopped accepting it. It certainly seems like Bitcoin shows a lack of retail transactions.
If you've ever heard of Coinbase you know there are plenty of sales of Bitcoin.
>What percentage of Bitcoin sales involve actual transactions of goods or services
100% of the sales of Bitcoins involve actual transacting of Bitcoins.
If bitcoin owners hold their supply, and buying interest mounts, the price will go up until an equilibrium between buyers/sellers is met (the "market price").
It's really no different from the stock market, except the asset is different. For the stock market the asset is company ownership, in the crypto market the asset is the cryptocurrency. Cryptocurrency has value, frankly, because it has valuable properties. Currently as a convenient value store (think of Chinese investors storing wealth digitally instead of in NYC/Vancouver real estate), but the technology is developing so there's a lot of speculation that it could have further values we haven't discovered yet. The fact that investors are speculating on unknown future valuable properties of the tech instead of known cash flows is what makes crypto investing high risk - if the tech ends up truly being transformative then early investors will win big, if not then expect a bloodbath.
The bitcoin price is rising as much because current holders would rather hold as because buyers are willing to pay more than they were in the past.
A Ponzi scheme promises a return, and uses new money to fund returns to existing investors. Cryptocurrencies themselves make no such promise -- those buying with intent to sell in the future are buying with the belief that the future price will be higher, but such a reality is hardly certain.
It could just be a bent pipe comm satellite, which would make the headline mostly inaccurate, but it seems like having a copy of the blockchain on the bird would be a big win. A lot of the queries could be completed without having to bounce back to the ground if a copy of the blockchain was available on the satellite.
Also it's unclear how people in these remote places will acquire their first bitcoins.
What I like about Bitcoin is the way that the tokens are distributed (via PoW currently).
If there was a way to distribute a new cryptocurrency, somewhat fairly, within these remote places that have no internet, and let them bootstrap their own economy, now that would be cool.
For these places what is needed is a sort of an "offline cryptocurrency". They don't care about sending 5 btc to the person across town instantly... they care about sending 5 btc to the person in front of them at the market.
1. https://www.theguardian.com/global-development-professionals...
This is the fundamental problem with making a cryptocurrency that can actually serve its users well. To get popular, you need to be a get rich quick scheme, but to actually be useful, you need to not deflate out of control forever.
But bitcoin is doing what it was meant to do. It wasn't meant to promote a healthy monetary policy or be a pervasive useful currency to replace the fiats we have now - it would have had a much different coin issuance algorithm / monetary growth policy otherwise. It demonstrated the capabilities of proof of work distributed consensus and made its early adopters ludicrously rich.
This is like the 10th time the news catches up to a surge only after there's actually been a quick drop (like today. BTC, ETH, LTC all down 5-6% over 24h).
The volatility itself (in crypto) creates amazing short turn-around opportunity for those willing to take some risks and set up basic limit buy/sells (gdax makes this very easy).
So you need to buy a SDR transceiver in order to operate...
https://blockstream.com/satellite/blockstream-satellite/