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Bitcoin = scam

From: Mike Robinson 
------------------------------------------------------
I'll call it what it -is-:  it's a scam directed at nerds.  "... and two =
to take him."

The con consists, first, of posing a computationally-difficult yet =
not-insurmountable crypto problem.  It can be solved; it just takes a =
long time.  So, nerds are instantly absorbed in the "challenge for a =
challenge's own sake," namely, to solve the problem.  They can be =
counted on not to examine the whole proposal too-seriously, because =
nerds generally consider themselves to be trustworthy and thus are =
too-trusting.

"Someone (but we don't actually know who ...) said" that the number of =
bitcoins would be limited .. which is a necessary premise if you're =
being conned into thinking that you're mining for gold.  "Tokens can =
only be used once."  And most importantly, "the verification software =
cannot be tricked into giving a false-positive."

Subtly, now, the nerds are suckered into giving-up REAL CURRENCY ... =
more than $100 USD at this point ... which they don't mind doing =
because, of course, they're sure that Nothing Comes Down (-and- that =
there is something holding it Up in the first place).

It's pointless, though, to argue these points with people who have =
caught "digital Gold Fever."  The only thing that can be done in that =
case is to sell them shovels and picks, which is precisely what Leland =
Stanford, among many others, did.  Well, I have nothing to sell you, but =
I'll rest my case at this point and disregard the inevitable rebuttal.  =
Presumably, you're not going to lose any money that you can't afford to =
lose.


On Aug 5, 2013, at 5:50 PM, chugalug-request@chugalug.org wrote:

> Call it what you will, but those who got into Bitcoin early have done
> extremely well.  Also, there is a pretty clear exponential trend =
relative
> to the dollar, which implies its value is still increasing.












=============================================================== From: Stephen Kraus ------------------------------------------------------ I've tried explaining this before, but unfortunately people are really bought into the idea, and its none of my business what they do with their time and processing power. Its pretty much a pyramid scam, insufficient as a dependable currency and fluctuates too quickly. Buy, people can do as they please, but its along the same lines as claiming vaccines cause autism.

=============================================================== From: James Nylen ------------------------------------------------------ Stephen, I think Bitcoin shows some truly interesting qualities. It is hard to counterfeit, transparent, and easy to spend. Digital currencies based on cryptography show great promise in terms of libertarian free-market ideals. I must disclose that I made a small investment in Bitcoin a couple years ago, so my conclusions are subject to the usual biases. Thus far, though, I'm glad to have been part of the experiment.

=============================================================== From: Randy Yates ------------------------------------------------------ You guys were saying the same thing when it was $9 per bitcoin. If you'd taken a $100 risk, you could have brought in around $2400 last month. I'm not saying that I'd start using bitcoin as my currency of choice at the moment. I'm just saying that there have been plenty of negativity toward it on here and I only wish I'd swept some of that aside and bought about 100 bitcoins last year when it was low. I could have paid a chunk of my house off this year.

=============================================================== From: James Nylen ------------------------------------------------------ Randy, I agree... I think much of the negativity towards Bitcoin is unwarranted. I understand unwillingness to spend money on something that has less real value than a tulip, but that shouldn't translate into anger when it turns out to actually have made some people a lot of money. Source: http://buttcoin.org/

=============================================================== From: Stephen Kraus ------------------------------------------------------ Its not anger. Its confusion. Also, its a fiat currency.

=============================================================== From: Stephen Kraus ------------------------------------------------------ Also, I'd point out that you are effectively doing with Bitcoins what many Libertarians claim the US Federal Reserve is doing: pulling money out of thin air.

=============================================================== From: Randy Yates ------------------------------------------------------ Except that there is a limited number of bitcoins, and the limit on dollars keeps going up.

=============================================================== From: Aaron Welch ------------------------------------------------------ I would love to have a discussion about this at a CHUGALUG event sometime. -AW s keeps going up. te: y Libertarians claim the US Federal Reserve is doing: pulling money out of t= hin air. arranted. I understand unwillingness to spend money on something that has l= ess real value than a tulip, but that shouldn't translate into anger when it= turns out to actually have made some people a lot of money. : 'd taken a $100 risk, you could have brought in around $2400 last month. I'm= not saying that I'd start using bitcoin as my currency of choice at the mom= ent. I'm just saying that there have been plenty of negativity toward it on h= ere and I only wish I'd swept some of that aside and bought about 100 bitcoi= ns last year when it was low. I could have paid a chunk of my house off this= year. o counterfeit, transparent, and easy to spend. Digital currencies based on c= ryptography show great promise in terms of libertarian free-market ideals. ars ago, so my conclusions are subject to the usual biases. Thus far, thoug= h, I'm glad to have been part of the experiment. ly bought into the idea, and its none of my business what they do with their= time and processing power. y and fluctuates too quickly. laiming vaccines cause autism. wrote: d two to take him." ot-insurmountable crypto problem. It can be solved; it just takes a long ti= me. So, nerds are instantly absorbed in the "challenge for a challenge's ow= n sake," namely, to solve the problem. They can be counted on not to examin= e the whole proposal too-seriously, because nerds generally consider themsel= ves to be trustworthy and thus are too-trusting. of bitcoins would be limited .. which is a necessary premise if you're bein= g conned into thinking that you're mining for gold. "Tokens can only be use= d once." And most importantly, "the verification software cannot be tricked= into giving a false-positive." . more than $100 USD at this point ... which they don't mind doing because, o= f course, they're sure that Nothing Comes Down (-and- that there is somethin= g holding it Up in the first place). aught "digital Gold Fever." The only thing that can be done in that case is= to sell them shovels and picks, which is precisely what Leland Stanford, am= ong many others, did. Well, I have nothing to sell you, but I'll rest my ca= se at this point and disregard the inevitable rebuttal. Presumably, you're n= ot going to lose any money that you can't afford to lose. one elative

=============================================================== From: Stephen Kraus ------------------------------------------------------ And that means....what? It doesn't matter, because effectively it means that a limited number of miners with the best equipment can control the entire trade. And in the end, the currencies value is limited to its value in USD, independent of its USD value, it has no value. The expectation from anyone accepting bitcoins is that they can exchange it for USD and come away with a more widely accepted currency. So inherently its a fiat currency, and this has been done when corporations in the early 1900s paid you in company money that only had value at stores and retailers the company owns. And then, there comes the real question:would what inherent value does the bitcoin generated by an algorithm have? All it represents are CPU cycles and a power bill invested into a calculation. Nothing more.

=============================================================== From: Aaron Welch ------------------------------------------------------ This is the same as the US dollar. I am not sure why people hate on BTC, wh= en the USD is way worse. The only thing protecting the viability of USD is y= our and my faith that it will hold enough value to pay for your food, gas, a= nd rent tomorrow. -AW at a limited number of miners with the best equipment can control the entire= trade. endent of its USD value, it has no value. The expectation from anyone accept= ing bitcoins is that they can exchange it for USD and come away with a more w= idely accepted currency. s in the early 1900s paid you in company money that only had value at stores= and retailers the company owns. bitcoin generated by an algorithm have? All it represents are CPU cycles an= d a power bill invested into a calculation. Nothing more. rs keeps going up. ote: ny Libertarians claim the US Federal Reserve is doing: pulling money out of t= hin air. warranted. I understand unwillingness to spend money on something that has l= ess real value than a tulip, but that shouldn't translate into anger when it= turns out to actually have made some people a lot of money. e: u'd taken a $100 risk, you could have brought in around $2400 last month. I'= m not saying that I'd start using bitcoin as my currency of choice at the mo= ment. I'm just saying that there have been plenty of negativity toward it on= here and I only wish I'd swept some of that aside and bought about 100 bitc= oins last year when it was low. I could have paid a chunk of my house off th= is year. o counterfeit, transparent, and easy to spend. Digital currencies based on c= ryptography show great promise in terms of libertarian free-market ideals. ears ago, so my conclusions are subject to the usual biases. Thus far, thou= gh, I'm glad to have been part of the experiment. lly bought into the idea, and its none of my business what they do with thei= r time and processing power. cy and fluctuates too quickly. laiming vaccines cause autism. nd two to take him." not-insurmountable crypto problem. It can be solved; it just takes a long t= ime. So, nerds are instantly absorbed in the "challenge for a challenge's o= wn sake," namely, to solve the problem. They can be counted on not to exami= ne the whole proposal too-seriously, because nerds generally consider themse= lves to be trustworthy and thus are too-trusting. r of bitcoins would be limited .. which is a necessary premise if you're bei= ng conned into thinking that you're mining for gold. "Tokens can only be us= ed once." And most importantly, "the verification software cannot be tricke= d into giving a false-positive." .. more than $100 USD at this point ... which they don't mind doing because,= of course, they're sure that Nothing Comes Down (-and- that there is someth= ing holding it Up in the first place). caught "digital Gold Fever." The only thing that can be done in that case i= s to sell them shovels and picks, which is precisely what Leland Stanford, a= mong many others, did. Well, I have nothing to sell you, but I'll rest my c= ase at this point and disregard the inevitable rebuttal. Presumably, you're= not going to lose any money that you can't afford to lose. one elative

=============================================================== From: Stephen Kraus ------------------------------------------------------ Lets put the whole 'limited amount' im perspective: Lets say you are a panhandler, you find a cache of gold. Awesome! So you mine as fast as you can, but eventually a large and fairly well to do company finds out. You can mine as fast as you can, but that large company has equipment, manpower, and time on their side.

=============================================================== From: Stephen Kraus ------------------------------------------------------ Aaron, the US dollar holds buying power because banks, companies, and the US government says it does. Thats a lot of weight, not to mention, no matter how bad it gets foreign traders still recognize the USD as having buying power.

=============================================================== From: Stephen Kraus ------------------------------------------------------ Okay, another scenario: Lets say that tomorrow, the USD us declared to have no value. Explain how bitcoins will then have a value, and how you intend to set its worth

=============================================================== From: Tyler Mittan ------------------------------------------------------ Don't treat it like it's something that's away from the law of supply and demand. Nothing has its value =93set" unless there is some kind of price control. The value is set by the law of supply and demand. If there truly is finite amount of bitcoins that are being created than the worth of a bitcoin will not be able to one day be worthless unless everybody decides to stop taking bitcoins. Right now it is almost a currency, but it won't be such as long as the us government decides it doesn't want a competing currency. There are some good economists that talk about bitcoins and it might be worth reading what they have to say before knocking it.

=============================================================== From: Stephen Kraus ------------------------------------------------------ Post your links. Also, before quoting 'law of supply and demand' which is one of the most often misquoted economic terms, please provide me with a list of banks that accept bitcoins as a trade medium, and major retailers that accept them. Also, let me be clear in my intentions with this: it is not to call anyone out or plaster anyone as a fool, but merely to play devils advocate and provide skepticism On Aug 7, 2013 9:16 AM, "Tyler Mittan" wrote:

=============================================================== From: Aaron Welch ------------------------------------------------------ Convert to Pesos, Yen, Euros... As I can so today. -AW worth US government says it does. Thats a lot of weight, not to mention, no matte= r how bad it gets foreign traders still recognize the USD as having buying p= ower. ly well to do company finds out. anpower, and time on their side. me. llars keeps going up. wrote: many Libertarians claim the US Federal Reserve is doing: pulling money out o= f thin air. e: unwarranted. I understand unwillingness to spend money on something that h= as less real value than a tulip, but that shouldn't translate into anger whe= n it turns out to actually have made some people a lot of money. rote: you'd taken a $100 risk, you could have brought in around $2400 last month.= I'm not saying that I'd start using bitcoin as my currency of choice at the= moment. I'm just saying that there have been plenty of negativity toward it= on here and I only wish I'd swept some of that aside and bought about 100 b= itcoins last year when it was low. I could have paid a chunk of my house off= this year. te: rd to counterfeit, transparent, and easy to spend. Digital currencies based= on cryptography show great promise in terms of libertarian free-market idea= ls. e years ago, so my conclusions are subject to the usual biases. Thus far, t= hough, I'm glad to have been part of the experiment. eally bought into the idea, and its none of my business what they do with th= eir time and processing power. rency and fluctuates too quickly. s claiming vaccines cause autism. . and two to take him." et not-insurmountable crypto problem. It can be solved; it just takes a lon= g time. So, nerds are instantly absorbed in the "challenge for a challenge'= s own sake," namely, to solve the problem. They can be counted on not to ex= amine the whole proposal too-seriously, because nerds generally consider the= mselves to be trustworthy and thus are too-trusting. mber of bitcoins would be limited .. which is a necessary premise if you're b= eing conned into thinking that you're mining for gold. "Tokens can only be u= sed once." And most importantly, "the verification software cannot be trick= ed into giving a false-positive." Y ... more than $100 USD at this point ... which they don't mind doing becau= se, of course, they're sure that Nothing Comes Down (-and- that there is som= ething holding it Up in the first place). ave caught "digital Gold Fever." The only thing that can be done in that ca= se is to sell them shovels and picks, which is precisely what Leland Stanfor= d, among many others, did. Well, I have nothing to sell you, but I'll rest m= y case at this point and disregard the inevitable rebuttal. Presumably, you= 're not going to lose any money that you can't afford to lose. : ve done nd relative

=============================================================== From: Tyler Mittan ------------------------------------------------------ http://mises.org/daily/6401/ http://www.freebanking.org/2013/04/22/bitcoin/ Here are two specifically about bitcoin. The law of supply and demand dictates the worth of just about anything we consider valuable. Money is no different. It doesn't matter if it is bitcoin or the dollar. That's why there is such thing as inflation because it causes an influx in money being spent which then creates higher prices because more money being spent creates the incentive to raise prices. This also explains why we might not be experiencing the inflation many economists expected us to because while the new credit expansion is definitely there, banks are holding onto it because of uncertainty. So I was not directly saying that bitcoin's worth is dictated by the law of supply and demand, I am saying that all money is. Bitcoin included. I agree that many people don't accept it, but I think they would in the absence of a monopoly on currency via the government. at e d

=============================================================== From: Stephen Kraus ------------------------------------------------------ http://rationalwiki.org/wiki/Ludwig

=============================================================== From: Ed King ------------------------------------------------------ lets put this to rest... =C2=A0 the only true measure of bitcoin value is w= hether or not a prostitute would accept them as payment. =0A=0A=0A=0A=0A

=============================================================== From: Tyler Mittan ------------------------------------------------------ Have you ever read Mises or Hayek? What's ironic is that wiki's are essentially Hayek's insight so I love reading the Rational Wiki full knowing that they truly believe in the ideas that the Mises Institute advocates. So the Rational Wiki is more of just a joke. Besides, I posted George Selgin, too.

=============================================================== From: Tyler Mittan ------------------------------------------------------ What's also stupid about the Rational Wiki is that they advocate pure empiricism. Anything they write should be taken as satire with small insights of actual information. It's virtually the Daily Show of the internet.

=============================================================== From: Stephen Kraus ------------------------------------------------------ Yeah...no its not. Rationalwiki was founded to fight Conservapedia, while some of their articles are written in a humorous tone, they are dead serious and usually cited I mean, have you even watched the Daily Show or Colbert? Sure, its comedy, but the points raised are legitimate none the less. Mises is a joke in the actual economic joke, on the same level as the Creationism Museum and the Family Research Council. On Aug 7, 2013 10:01 AM, "Tyler Mittan" wrote:

=============================================================== From: Tyler Mittan ------------------------------------------------------ Rational Wiki is built on the Hayekian idea that knowledge and information is dispersed so it's pretty much just a joke (although they don't mean to be). Austrian economists are not conservatives. Unless you mean 2 Nobel prize winning economists are jokes. Not to mention the Austrian economist that shattered the idea of Marx, Ricardo, and yes, even Adam Smith that things are only as valuable as what it costs to make them. Why not try reading Mises and especially Hayek before quoting ironic, I'll informed websites? You also haven't really addressed my points. You attacked one of my sources, but never my actual information nor addressed the non-Austrian George Selgin. y ,

=============================================================== From: Stephen Kraus ------------------------------------------------------ Stalin shattered the Idea of Marx, that is going a long way to say that it was shattered by a paper. Mises is a libertarian think-tank, its no different from others of its groups like The Heartland Institute. I have read a couple of Mises articles, they read like propaganda, approach their subjects with zero skepticism and often no control, assuming that long before their study that the result will fit the expectation. It is the epitome of a biased source. End of story. Not to mention I honestly cannot take a group that says Somalia is some sort of free enterprise paradise seriously. Next question:would If Austrian economics works, why does nobody reputable use it? And finally: How many of you purchased your mining rigs with bitcoins? On Aug 7, 2013 10:13 AM, "Tyler Mittan" wrote: n l ly :

=============================================================== From: Tyler Mittan ------------------------------------------------------ A) Carl Menger, a well known Austrian economist, is the one who came out with the notion that value is free from the labor theory of value. So much for that. B) Hayek and Mises predicted the fall of the communism because there is no price system. Read the socialist calculation debate. Mises and Hayek won that debate. C) Mises is a skeptic, read an actual book by him. If you don't like him you can read Hayek or Kirzner, =93a couple of articles" just won't do it. I read Krugman and Sitglitz, I think you can handle reading Mises and Hayek. D) No libertarian says Somalia is a free market paradise even if studies show that the people are more prosperous without government. Read David Friedman the son of Milton Friedman. E) First, thank you for accidentally implying that no Austrian theory of economics caused this most recent crash (although many did predict it). Secondly, there is no political incentive to try things out like the Austrians want. If you want to know why just read about any public choice economist like Gordon Tullock or Nobel Prize winning economist James Buchanan (he graduates from MTSU fun fact). F) I don't even own any bitcoins. If I could have when it first started, but like the Mises article admits, it is definitely a bubble right now. And as the Selgin article admits it's not widely accepted enough to be considered money. I never said it was, but it absolutely could be if we ended the government's monopoly over currency. t ng e en m. lly

=============================================================== From: Stephen Kraus ------------------------------------------------------ Tyler, I'll give you this: their theories are sound. But in practice, nearly every theory they've proposed doesn't hold up. And I'll say it again, Misis is taken seriously by only one group: Libertarians. Everyone else, including major economists outside of the classroom, won't even give Misis the time of day. On Aug 7, 2013 11:01 AM, "Tyler Mittan" wrote: h o I . nd ing u ven em. : ally

=============================================================== From: Mike Harrison ------------------------------------------------------ It is as valid of currency as anything else when any two parties agree on tha value of the medium of exchange and the object or service they are exchanging for. A "dollar" is worth a dollar because both parties agree on the perceived value of that piece of paper, based on the perceived value of everyone else. It is only a farce when a government or other authoritarian entity enforces price controls that are outside of mutually agreed society ranges. If no-one perceived a bitcoin as valuable, they would be value-less.

=============================================================== From: Stephen Haywood ------------------------------------------------------ Whether it's a scam or not will be decided by time not by arguing on a = LUG list. In the meantime if people are able to make money then why not = let them. -- Stephen Haywood Owner, ASG Consulting CISSP, GSEC, OSCP 423.305.3700 stephen@averagesecurityguy.info On Aug 7, 2013, at 1:08 PM, Stephen Kraus = wrote: Libertarians. Everyone else, including major economists outside of the = classroom, won't even give Misis the time of day. wrote: out with the notion that value is free from the labor theory of value. = So much for that. is no price system. Read the socialist calculation debate. Mises and = Hayek won that debate. him you can read Hayek or Kirzner, =93a couple of articles" just won't = do it. I read Krugman and Sitglitz, I think you can handle reading Mises = and Hayek. studies show that the people are more prosperous without government. = Read David Friedman the son of Milton Friedman. of economics caused this most recent crash (although many did predict = it). Secondly, there is no political incentive to try things out like = the Austrians want. If you want to know why just read about any public = choice economist like Gordon Tullock or Nobel Prize winning economist = James Buchanan (he graduates from MTSU fun fact). started, but like the Mises article admits, it is definitely a bubble = right now. And as the Selgin article admits it's not widely accepted = enough to be considered money. I never said it was, but it absolutely = could be if we ended the government's monopoly over currency. wrote: that it was shattered by a paper. groups like The Heartland Institute. approach their subjects with zero skepticism and often no control, = assuming that long before their study that the result will fit the = expectation. honestly cannot take a group that says Somalia is some sort of free = enterprise paradise seriously. reputable use it? wrote: information is dispersed so it's pretty much just a joke (although they = don't mean to be). Austrian economists are not conservatives. Unless you = mean 2 Nobel prize winning economists are jokes. Not to mention the = Austrian economist that shattered the idea of Marx, Ricardo, and yes, = even Adam Smith that things are only as valuable as what it costs to = make them. I'll informed websites? sources, but never my actual information nor addressed the non-Austrian = George Selgin. wrote: articles are written in a humorous tone, they are dead serious and = usually cited comedy, but the points raised are legitimate none the less. Creationism Museum and the Family Research Council. wrote: empiricism. Anything they write should be taken as satire with small = insights of actual information. It's virtually the Daily Show of the = internet. wrote:

=============================================================== From: John Aldrich ------------------------------------------------------ Quoting Aaron Welch : Dang. Beat me to it. Unlike in the past, the US Dollar is only backed by the government saying "Trust us. It's all good." OTOH, BTC doesn't even have that going for it. All it has is people who are, for now, willing to exchange BTC for $US.

=============================================================== From: John Aldrich ------------------------------------------------------ Quoting Tyler Mittan : Exactly. Now I don't have a dog in this fight because I don't mine bitcoins or own any. However, the argument that the US dollar has value because people accept it as payment also holds true for Bitcoins. As long as people are willing to accept it, it has value.

=============================================================== From: Aaron Welch ------------------------------------------------------ I did. Several times over in fact. -AW

=============================================================== From: Aaron Welch ------------------------------------------------------ Agreed. It's like telling investors to stop buying oil futures because you a= re investing against the market. Good luck with that. -AW list. In the meantime if people are able to make money then why not let the= m.

=============================================================== From: Stephen Kraus ------------------------------------------------------ Ok Tyler, now that I'm no longer flying: A. The price of labour follows a close correlation with the price of all other commodities. It makes sense when you think about it, because you have to use labour to create anything of value, including capital goods that are used to reduce labour costs in the future. B.The USSR collapsed for mostly political reasons, such as giving Russia its own parliament (it voted to secede to get away from its poor peripheries), rather than economic ones. Examples of efficient resource allocation without a market are endemic in modern life: no large corporation has an internal market, they are all internally run as miniature command economies. In fact, most large organisations use some kind of management information system to allocate resources without a market. President Allende of Chile created Project CyberSyn to run his nation's economy under a similar principle. C.Everything I need to know about Mises I read here: http://socialdemocracy21stcentury.b...arrassment.html D. http://mises.org/daily/2066 E. http://www.youtube.com/watch?v=QIHLezCyzCI

=============================================================== From: Nick Smith ------------------------------------------------------ And then there's this: http://www.theverge.com/2013/8/7/4598644/bitcoin-is-real-money-rules-us-texas-district-court And for some reason this thread reminds me of this: http://xkcd.com/386/