Bitcoin revealed: a Ponzi scheme for redistributing wealth from one libertarian to another

[mahatmakanejeeves]

Bitcoin revealed: a Ponzi scheme for redistributing wealth from one libertarian to another

Wonkblog
By Matt O'Brien January 14
[e-mail]
@ObsoleteDogma

If Bitcoin were a currency, it'd be the worst-performing one in the world, worse even than the Russian ruble.

But Bitcoin isn't a currency. It's a Ponzi scheme for redistributing wealth from one libertarian to another. At least that's all it is right now. One day it could be more. Venture capitalists, for their part, are quick to point out that it's really a protocol, like the early internet, and its underlying technology could still be revolutionary. What are they supposed to say, though, when they've bet hundreds of millions of dollars on it?

But that's not much of a consolation to anyone who bought anywhere near Bitcoin's $1,100 top. Or near $1,000, or $900, or $800, or, well even yesterday's prices. That's because Bitcoin hasn't just fallen 76 percent the past year. It's fallen 36 percent the past two days, as you can see below, with a 24 percent decline the past 24 hours. It's too bad Bitcoin doesn't have a central bank to help stabilize its value.



Source: Coindesk

[pscot]

1. Is there a derivitives market in Bitcoin?

That would be exciting.

[PoliticAverse]

3. Yes, for example see...

http://www.futuresmag.com/2014/11/25/nadex-plans-launch-of-bitcoin-binary-options

http://www.nadex.com/trade-bitcoin.html

[PoliticAverse]

2. The person who wrote this appears to not know what a 'Ponzi Scheme' is.

https://en.wikipedia.org/wiki/Ponzi_scheme

Purchasers of bitcoins aren't promised a return from the seller.

[upaloopa]

4. I still have not gotten an answer to my question

from a few weeks ago.
Here goes, do you trade money for bit coins ? If you do and you were holding them do you lose money when the value drops?
Say you put up $1,000 from your bank account. How much do you have after a 36% drop?

[PoliticAverse]

5. Yes you can trade money for bitcoins.

Say you bought 5 bitcoins with your $1,000. If the value of bitcoins in dollars
dropped 36% you would still have 5 bitcoins but would get about 36% less
than you paid for them if you converted them back to dollars.

[upaloopa]

6. So it is a bit like gambling.

It is like buying a gift card that decreases in amount even without using it.
Why would someone want to do that?

[Art_from_Ark]

7. Bitcoin apparently has the allure of enabling untraceable transactions

Its "exchange rate" is also very unstable, so a speculator looking for a "bottom" might see a really low rate as a buying opportunity.

[PoliticAverse]

8. They're not that 'untraceable'. n/t