Everyone talks about the fact there was no hardware. Should someone mention that with Bitcoins, there is no actual money either? Or would that collapse the bigger Ponzi scheme that is Bitcoins?
Bitcoin cloud miners a '$20m Ponzi scheme – there was no cloud at all'
The US Securities and Exchange Commission (SEC) has filed charges against two bitcoin mining businesses it says operated as illegal Ponzi schemes. According to a complaint [PDF] the watchdog filed with the US District Court in Delaware, GAW Miners and Zenminer, both controlled by Josh Garza, stand accused of taking money …
COMMENTS
-
-
Tuesday 1st December 2015 22:56 GMT Electron Shepherd
There's no "actual" money anywhere these days, and in practical terms there hasn't been since bartering ended.
A £10 note is only "worth" £10 because everyone agrees it is. In reality, it's a bit of paper with almost zero intrinsic value. You can't eat it or drink it, and if you burn it to keep warm, it won't last very long at all.
The new crypto-currencies aren't that different really. Their worth is in what everyone agrees they're worth.
-
Tuesday 1st December 2015 23:59 GMT Anonymous Coward
There's a difference
The difference with real money like pounds or dollars is that they are the ONLY money acceptable to pay taxes with. You can't pay your taxes with bitcoin, gold or Picassos, even though all three have some sort of value that would allow you to exchange them for some amount of pounds or dollars.
It is the government's taxing authority that gives a more important value to the currency they issue, and make it impractical for people to decide they want to abandon the the government and use an alternative currency. One could, with some difficulty, conduct their personal affairs using bitcoin or gold, but they'll always have to convert it to real currency to pay their taxes (though the type of person willing to 'arrange their affairs' in this way, at least in the US, is the type who generally has reasons why they think the government doesn't have the authority to levy an income tax)
-
-
-
Wednesday 2nd December 2015 10:57 GMT Tubs
Re: There's a difference
> Yeah its a real pain in the ass nobody will build roads for you for free.
It's not about getting everything for free. It's about all the money that's spent on shit nobody wants. And people getting paid to administer the shit nobody wants...
If enough people want a road, and it's commercially viable to them to build it, they will pay for it. If it isn't cost effective, why build it at all?
-
Wednesday 2nd December 2015 12:45 GMT Alien8n
Re: There's a difference
And then you get US welfare systems. Where no one wants to pay tax to have universal healthcare, so instead they have private healthcare that costs a hell of a lot more in insurance premiums. So those that can't afford the insurance premium must go without, but it's their own fault for not earning enough from their 3 jobs that they need to do just to pay the rent...
Tax is a necessary evil, without it nothing gets done. Otherwise you get the argument of "but why should I pay for the road that goes north from my house when I only ever drive south?"
-
Wednesday 2nd December 2015 13:12 GMT Tubs
Re: There's a difference
I think you have it the wrong way up.
The people with three jobs are struggling because they are paying tax in order to build the northbound road, even though they can't afford a car.
If the healthcare system and the insurance companies (and everything else) weren't taxed to the hilt, the insurance would be more affordable to start with. Once you add taxes (not all of which are bad, granted) you then get taxed on the taxes, and so on.
You then get people paid to administer the taxes, and those that get paid to enforce the administered taxes. A lot of the tax money taken is used just to maintain the tax system. It's a waste.
-
Wednesday 2nd December 2015 13:51 GMT TheOtherHobbes
Re: There's a difference
>If the healthcare system and the insurance companies (and everything else) weren't taxed to the hilt, the insurance would be more affordable to start with.
Nope. That's a fairy tale for simple folk. There is *no correlation whatsoever* between tax rates and affordability.
Insurance companies are hardly "taxed to the hilt" in the US. Nor are people working three jobs. US tax rates for the low paid are modestly progressive. The wheels come off further up the tree, when highly profitable corporations - including health care providers - aren't taxed sufficiently to pay for the federal benefits they receive.
-
Thursday 3rd December 2015 00:59 GMT DanceMan
Re: @ Tubs -- There's a difference
The USA spends 17.9% of its GDP on healthcare and does not cover everyone.
Canada, Germany, France, Japan, and the UK spend between 9.4% to 11.7% of GDP on healthcare and AFAIK cover everyone. I suspect the difference is your spending on accountants, bill collectors, advertising, and office staff and profit, vs. nurses and doctors.
I hear the US won't consider going to a single payer system, because "it would cost too much." As opposed to the efficient system you have now? Want to see figures? How about the CIA website:
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2225rank.html
-
-
-
-
-
-
Thursday 3rd December 2015 16:12 GMT Michael Wojcik
Re: There's a difference
The difference with real money like pounds or dollars is that they are the ONLY money acceptable to pay taxes with.
That attribute doesn't distinguish "real money" from its complement ("fake money"?) under any even vaguely rigorous theory of money. It's an interesting attribute, but it fails to described bottom-up currencies, such as the resurrected currency of Somalia. And for the people using those currencies, they are very real money indeed.
The simple fact of the matter is that theories of money that fit in a sentence or two are inadequate to describe the range of monetary systems that have been used throughout history and across cultures. Handwaving arguments about what constitutes "real money", while they might include some important insights, are ultimately just opinion pieces.
-
-
-
Wednesday 2nd December 2015 01:19 GMT Anonymous Coward
Central bank to stabilize its value
Bitcoin is no different than gold in that regard, and gold has managed to work as a currency for most of history. Lacking a central bank to (try to) help via controlling money supply or interest rates leads to a lot of inflation/deflation/depression episodes, of course, but as 2008 showed even with a central bank at best you can only limit their severity.
Theoretically a world central bank could do some of that if gold was a worldwide currency, but Europe has shown what happens if you try to have a central economic authority that controls monetary policy while having no control over fiscal policy (and anyway good luck getting the US to cede authority to a 'world' anything...)
One thing gold gets right is that it has a constantly increasing money supply - it isn't a controlled increase so there are economic shocks caused by major new discoveries, but that's way better than Bitcoin's hard ceiling on the money supply, which would guarantee eternal deflation and endless depression if it was the one world currency.
-
-
Wednesday 2nd December 2015 15:29 GMT waldo kitty
Re: Central bank to stabilize its value
It's important to note that we don't use gold these days because there came a point at which, whether or not it really did work properly in the past, it definitely didn't work properly any more.
actually, we got off the gold standard because there's not enough gold in the world to cover the money that is available... i can't say that that is "not working properly any more", though... gold still "works properly" for what it is used for...
-
-
-
-
-
-
-
-
-
-
Wednesday 2nd December 2015 15:16 GMT asdf
Re: re: Ad-Blocker is going back ON
> I installed PiHole on it so all ads on my wifi are imploded to a single transparent pixel.
Hmm haven't heard of PiHole before so will have to look at while bored at work today. Still making ads one pixel big is actually a trick they do so you don't know they are there yet they can still track you around the internet which is why blocking them and even blocking the domain they come from ala privacy badger or ghostery (not sure if works on FF on iphone as I don't use) as well is often the way to go.
-
Wednesday 2nd December 2015 21:14 GMT asdf
Re: re: Ad-Blocker is going back ON
Ah ok finally got bored. I see basically PiHole simply reroutes requests for ads (urls and domains kept in masterlist refreshed from inet) to a localhost web server that serves up the one pixel image you are talking about so the request is effectively blocked. Neat and gives you an excuse why you need a Pi2 lol.
-
-
-
-
-
This post has been deleted by its author
-
-
-
Tuesday 1st December 2015 22:38 GMT Mark 85
Re: Weird
Well... if you were one of the "early" investors, you would have your money back and then some. It's everyone else after the first two layers that normally get screwed. The trick would be knowing when a Ponzi is starting and jumping on board to be the first level although that is usually taken by the head con-artist and friends.
Reality... enjoy the smug. There's so little of late to feel smug about.
-
Wednesday 2nd December 2015 12:41 GMT EyePeaSea
Re: Weird
>> Well... if you were one of the "early" investors, you would have your money back and then some.
No, not at all. As an early investor, you would be getting a good rate of return on your investment (paid for by the 'later' investors), but your initial 'stake' is still going to be lost when the bubble bursts.
You invest £100k, on the promise of a 20% return/annum. You're an early investor and get 5 years of return before the scheme collapses. Hey! You just made £100k!!!!
Oh, but wait, you've lost your initial investment so actually, if you're a really, really, really, lucky person, you've come out even. So best case scenario - you've taken a huge gamble and got the financial return equivalent of stuffing £50 notes into your mattress.
An alternative? £100k over 5 years on a 2 bed terrace in Bradford - You'd be up £20k in equity + the rental income (nett about £350/month, so that's another £21k).
So, the only way to make money out of a Ponzi scheme is to be the person setting it up. And no, I'm not suggesting that. Personally, I prefer hard work and not taking holidays. But I'm a boring old fart.
Ponzi schemes flourish because of 1 basic human trait; greed. Greed of the person setting it up and greed of the investor hoping to jump on something that looks too good to be true. <sigh>
-
Thursday 3rd December 2015 16:20 GMT Michael Wojcik
Re: Weird
As an early investor, you would be getting a good rate of return on your investment (paid for by the 'later' investors), but your initial 'stake' is still going to be lost when the bubble bursts.
Depends on the scheme and investor. People have been known to cash out of Ponzi schemes and get their initial stake back, as well as returns, and thus make a net profit. A number of the investors in a Ponzi scheme run by a fellow named Charles Ponzi did so, for example.
A historical aside: Ponzi's scheme was far from the first Ponzi scheme. It was the first big one to implode in the US, though, which helped make it famous. And another: There's good reason to suspect that Ponzi himself never intended to defraud anyone. He apparently was largely innumerate and had terrible bookkeeping - basically it was along the lines of "a big pile of cash in a room" - and thought his investment scheme in international postal coupons was actually working. His advisers almost certainly knew it was a sham, though.
Joseph Bulgatz's Ponzi Schemes, Invaders from Mars, and More Extraordinary Popular Delusions and the Madness of Crowds (a sort of sequel to Makay's classic) is a nice treatment of the subject.
-
-
-
-