mersenneforum.org  

Go Back   mersenneforum.org > Extra Stuff > Soap Box

Reply
 
Thread Tools
Old 2021-03-30, 20:16   #1
Blackadder
 
Blackadder's Avatar
 
"Angelino Desmet"
Mar 2018
Belgium

4910 Posts
Default Cryptocurrency pyramid scheme

I don't understand why people can't see it's all one big pyramid scheme. The early 'adopters' pay small amounts of money for a big percentage of the total amount of 'coins', and the late 'adopters' pay large amounts of money for a small percentage of the total amount of 'coins'. And once people have it, they have every incentive to get as many people to buy it as well, because only then they profit.
Blackadder is offline   Reply With Quote
Old 2021-03-30, 20:28   #2
retina
Undefined
 
retina's Avatar
 
"The unspeakable one"
Jun 2006
My evil lair

6,143 Posts
Default

Quote:
Originally Posted by Blackadder View Post
I don't understand why people can't see it's all one big pyramid scheme. The early 'adopters' pay small amounts of money for a big percentage of the total amount of 'coins', and the late 'adopters' pay large amounts of money for a small percentage of the total amount of 'coins'. And once people have it, they have every incentive to get as many people to buy it as well, because only then they profit.
People can see it.

The currency only has value when it can be spent on things. As of now the main purpose appears to be to speculative, and try to make money from the new idiots buying into the hype.

If you are into illegal stuff then perhaps it has some spending value? Otherwise there isn't anything to buy.

Anyhow, I imagine the large coin holders are happily manipulating the prices to their own ends. Without any government regulations or oversight there is no one to stop them changing the price in any way they please. So if you do buy in then you had better hope the manipulators are being favourable to you today. And even better if you can get inside knowledge about what are their future plans for the price.
retina is offline   Reply With Quote
Old 2021-04-02, 17:52   #3
storm5510
Random Account
 
storm5510's Avatar
 
Aug 2009

2·971 Posts
Default

Quote:
Originally Posted by retina View Post
People can see it.

The currency only has value when it can be spent on things. As of now the main purpose appears to be to speculative, and try to make money from the new idiots buying into the hype.

If you are into illegal stuff then perhaps it has some spending value? Otherwise there isn't anything to buy.

Anyhow, I imagine the large coin holders are happily manipulating the prices to their own ends. Without any government regulations or oversight there is no one to stop them changing the price in any way they please. So if you do buy in then you had better hope the manipulators are being favourable to you today. And even better if you can get inside knowledge about what are their future plans for the price.
I used to dabble in this and there is one thing I noticed right away. The entire system is geared toward the wealthy. I still occasionally look at the latest propaganda.

Recently, there are more avenues which make coins spendable. Certain sites, like Coinbase, allow linking to a person's bank account to deposit coins converted into U.S. currency. PayPal is introducing linkage to coin accounts, again to be spent as dollars. I imagine this process will expand as time passes.

There is a major downside. It is the load on the nation's electrical infrastructure. I read a few weeks ago that the average load for crypto mining is 21 Terra-watts. This is just in the U.S. No global figure was available. As this continues to grow, I can see a time not far away when rolling blackouts will be common in large metro areas, especially in hot weather. I really do not see how this can continue unabated.
storm5510 is offline   Reply With Quote
Old 2021-04-02, 23:34   #4
ATH
Einyen
 
ATH's Avatar
 
Dec 2003
Denmark

2×1,567 Posts
Default

I do not understand it either. Every time someone starts a new crypto currency that is at least moderately successful the inventors and early adopters literally get rich from nothing, just from the idea and from the gullible people buying in later.

I know all currencies only have value because we say/trust/believe they have, but at least most "normal" currencies are backed by countries, banks, gold reserves etc.
I know many people like crypto currencies exactly because they are not controlled by governments or banks, but the alternative is also scary in my opinion. The lack of control means the values fluctuate easily 500%-1000% within a short time.

I think you can actually buy real things for bitcoins for example. But imagine you buy, lets say, a new computer for bitcoins. But 1-2 months later you realize you can now buy the same computer 5x cheaper, I feel like you cannot use such a volatile currency in your daily life.

Also as far as I understand bitcoins cannot handle if millions or billions of people started using it instead of credit cards, the system cannot handle that high number of transactions, it is very slow. It takes up to 30-60 min until you can be 100% sure your transaction is actually valid, and that the part of the block chain your transaction is on actually was validated instead of other possible branches, that can happen before validation.
ATH is offline   Reply With Quote
Old 2021-04-04, 00:47   #5
storm5510
Random Account
 
storm5510's Avatar
 
Aug 2009

2·971 Posts
Default

I read earlier today that Bitcoin is increasing its mining difficulty by 6%, I believe it was. Who does this benefit, I wondered? Utility companies, for one. Those using ASIC's for Bitcoin burn more electricity for no return. Bitmain, the manufacturer of most ASIC's, see their product demands rise because more want to get a piece of the action, so to speak.

GPU makers benefit greatly as well. Take a look at the attached image I plucked from Reddit. This is a single person's attempt to participate. I do not know what this individual paid for all this, but I would guess well into five digits. I would say there is a very good possibility most of this will end up on eBay sometime down the road.
Attached Thumbnails
Click image for larger version

Name:	Capture.JPG
Views:	47
Size:	57.4 KB
ID:	24618  
storm5510 is offline   Reply With Quote
Old 2021-04-04, 01:04   #6
chalsall
If I May
 
chalsall's Avatar
 
"Chris Halsall"
Sep 2002
Barbados

23·32·7·19 Posts
Default

Quote:
Originally Posted by storm5510 View Post
This is a single person's attempt to participate. I do not know what this individual paid for all this, but I would guess well into five digits.
My personal opinion on this is if anyone actually wants to participate in the "game", buy (or short) some Bitcoin or some other currency. Actually trying to mine is a fool's endeavor.
chalsall is online now   Reply With Quote
Old 2021-04-04, 16:17   #7
storm5510
Random Account
 
storm5510's Avatar
 
Aug 2009

36268 Posts
Default

Quote:
Originally Posted by chalsall View Post
My personal opinion on this is if anyone actually wants to participate in the "game", buy (or short) some Bitcoin or some other currency. Actually trying to mine is a fool's endeavor.
I agree.

To date, mining has been called "proof-of work." There is one coin, called Ethereum, which is in the process of switching to "proof-of-stake." In their case, mining will become obsolete. No heavy-duty hardware will be required to participate. As I understand it, current coin holders will invest in the process. The larger the investment, the more profitable it becomes for the individual. It will use something called "validators" to generate new coins. These people are chosen randomly based on the size of their investment. Each is given one transaction to complete, then another person is chosen for the next. There is a limited window-of-opportunity to complete the process. If a person fails to complete their assignment, they are penalized, and the same transaction is sent on to another to validate. I think something like validation groups are in process. If one in the group seems to be lagging, another within the group can complete the task. These groups would consist of only a few participants. Perhaps five. All would profit equally.

This is a complex process and what I wrote above is just a brief overview of what I understand about it. There is far more which I cannot grasp.

As for cryptocurrency itself, I see it as the largest pyramid scheme ever perpetrated in the history of the world. Every pyramid has a "capstone" which sits at the very top. I have often wondered who occupies the capstone position in cryptocurrency. There has to be somebody.
storm5510 is offline   Reply With Quote
Old 2021-04-04, 18:10   #8
ATH
Einyen
 
ATH's Avatar
 
Dec 2003
Denmark

2×1,567 Posts
Default

I do not know about the other crypto currencies, but for bitcoins "mining" validates the new transactions, so if everybody stopped mining the whole system would not work.

The reward for "mining" is also getting smaller and smaller so you will have to pay transaction fee of currently ~$17 !!
https://ycharts.com/indicators/bitco...ransaction_fee

Some of the math behind it might be clever, but when I first learned about how the whole thing works (and ever since) the only thing I thought was: "What a horrible horrible system, that cannot really be how it works?!?". But unfortunately it is.
The whole bitcoin blockchain is up to 328 GB now!
https://www.statista.com/statistics/...ockchain-size/

Here are the 2 explanation videos I usually link, if you want to know how terrible the system is:
https://www.youtube.com/watch?v=Lx9zgZCMqXE
https://www.youtube.com/watch?v=bBC-nXj3Ng4
ATH is offline   Reply With Quote
Old 2021-04-04, 18:52   #9
a1call
 
a1call's Avatar
 
"Rashid Naimi"
Oct 2015
Remote to Here/There

37508 Posts
Default

The concept of Money/(Cash/Currency) is only-about/more-than a thousand years old. It can not last much longer. It's only a matter of time before someone comes up with a replacement-concept that works. Bit-currencies are just some early attempts.
Civilizations have carried on and prospered for thousands of years prior to invention of money. It is not an absolute necessity.

ETA IMHO the shortcomings of bit/crypto-currencies is that they are still linked to the arbitrary/artificial/soon-to-be-obsolete concept of Money. Once they get to the root-objective of evaluation of commodities/work-performed/products/possessions it will all make sense.

Last fiddled with by a1call on 2021-04-04 at 19:13
a1call is offline   Reply With Quote
Old 2021-04-04, 19:05   #10
chalsall
If I May
 
chalsall's Avatar
 
"Chris Halsall"
Sep 2002
Barbados

23·32·7·19 Posts
Default

Quote:
Originally Posted by ATH View Post
I do not know about the other crypto currencies, but for bitcoins "mining" validates the new transactions, so if everybody stopped mining the whole system would not work.
Not my problem. Just shows yet another weakness (in Bitcoin, at least).

Quote:
Originally Posted by ATH View Post
Some of the math behind it might be clever, but when I first learned about how the whole thing works (and ever since) the only thing I thought was: "What a horrible horrible system, that cannot really be how it works?!?". But unfortunately it is.
Ditto. A beautiful thought experiment. But at least for the PoW attempts so far, they empirically just don't scale.
chalsall is online now   Reply With Quote
Old 2021-04-04, 20:08   #11
a1call
 
a1call's Avatar
 
"Rashid Naimi"
Oct 2015
Remote to Here/There

23×11×23 Posts
Default

Quote:
Originally Posted by ATH View Post

I think you can actually buy real things for bitcoins for example. But imagine you buy, lets say, a new computer for bitcoins. But 1-2 months later you realize you can now buy the same computer 5x cheaper, I feel like you cannot use such a volatile currency in your daily Life.
How is that worse than volatility of money:


https://www.statista.com/statistics/...nflation-rate/

https://www.dailymail.co.uk/news/art...World-War.html


At least with cryptocurrency the volatility is not a factor of which ideology governs your locale.
ETA Unless we keep evaluating them in terms of money.

Last fiddled with by a1call on 2021-04-04 at 20:23
a1call is offline   Reply With Quote
Reply

Thread Tools


Similar Threads
Thread Thread Starter Forum Replies Last Post
Efficient Proth/PRP Test Proof Scheme patnashev Number Theory Discussion Group 11 2020-06-03 14:02
Intel Xeon naming scheme change VictordeHolland Hardware 5 2017-04-29 06:48
Pyramid Hobby. mfgoode Hobbies 25 2007-03-19 18:56
Need help with Pyramid Puzzle! bebe Puzzles 7 2006-03-19 16:57
Number Pyramid edorajh Puzzles 3 2004-01-13 13:48

All times are UTC. The time now is 17:20.

Sat May 15 17:20:12 UTC 2021 up 37 days, 12:01, 0 users, load averages: 1.58, 1.98, 1.95

Powered by vBulletin® Version 3.8.11
Copyright ©2000 - 2021, Jelsoft Enterprises Ltd.

This forum has received and complied with 0 (zero) government requests for information.

Permission is granted to copy, distribute and/or modify this document under the terms of the GNU Free Documentation License, Version 1.2 or any later version published by the Free Software Foundation.
A copy of the license is included in the FAQ.