[luka-birsa]

Why are such articles constantly popping up on HN?

It's clear that the HN crowd does not like Bitcoin. So why keep reiterating similar arguments all over?

There is zero utility in the article shared. It states some anti crypto views and that's it. Even the author concedes that this is according to his own definition and not based on real life legal tests (which have of course shown that Bitcoin is not a ponzi).

Just let Crypto users be. I get it. You don't like Crypto, but at this point it's not like an opinion piece can change the their views.

Users transacted in the trillions of USD over last month. Crypto got institutions, countries, wealthy individuals, poor individuals using it every day. It's clear it has some utility to them.

It's time to reflect and consider that your anti Crypto position might be wrong.

Edit: clarity

[arcticbull]

There's great reasons not to. Unless we nip this in the bud, we face a potential repeat of the 1997 Albanian Ponzi crisis that brought about the total collapse of their economy. Everyone in Albania jumped in and started participating in a number of big Ponzi schemes. Their finance minister tried to stop them, so they threw him in jail. They then had a civil war about it, and the IMF had to drop in big bags of money. [1]

This is what the maxis are after.

If we don't cut this off ASAP, we all stand to lose.

[1] https://www.imf.org/external/pubs/ft/fandd/2000/03/jarvis.ht...

[imgabe]

> This is what the maxis are after.

When you find yourself saying that the people you disagree with are deliberately seeking catastrophic outcomes, it's time to take a step back and reconsider. I don't think anyone wants to destroy the global economy and cause a global war. Maybe the Bitcoin maxis are wrong about the long-term viability of Bitcoin, but I doubt very much they are some kind of nihilistic death cult bent on destroying civilization. Maybe dial it back a notch.

[arcticbull]

That's fair, and I walk that back. I don't think they're intentionally taking us into a Mad Max future, but I don't think their intent changes much if they get their way.

[hackingforfun]

There is no nipping this in the bud. That's the point. It's already too late.

[arcticbull]

I reject that thesis given the Chinese sure managed, in like a week. No Bitcoin in North Korea either. The longer we wait, the more painful it'll be.

[hackingforfun]

China vs crypto has been going on since 2013 [1]. Open source, decentralized crypto is a direct competitor to China's CBDC, which they have already developed and are trying to distribute [2]. Of course China would want to squash all competition. Jerome Powell from the Federal Reserve said in a video from 9/30/21 that he has no intention to ban crypto like China did, although it sounds like stablecoins may be regulated [3]. Jerome Powell has also said that the US is considering a CBDC [4]. The SEC has also already said in 2018 that Bitcoin and Ethereum are not securities [5]. The current head of the SEC, Gary Gensler, taught a course on blockchain for several years at MIT, and here is a set of his videos [6]. How do you think this technology is going to be completely banned, or that everyone will forget about it and it will totally go away? The seeds are already planted, and as I said, there's no nipping this in the bud now.

[1] https://www.btctimes.com/news/chinas-history-of-bitcoin-bans

[2] https://www.cnbc.com/2021/06/02/china-digital-currency-beiji...

[3] https://www.bloomberg.com/news/videos/2021-09-30/powell-says...

[4] https://www.cnbc.com/2021/09/22/the-fed-is-evaluating-whethe...

[5] https://www.cnbc.com/2018/06/14/bitcoin-and-ethereum-are-not...

[6] https://ocw.mit.edu/courses/sloan-school-of-management/15-s1...

[arcticbull]

> China vs crypto has been going on since 2013 [1].

True, the saga went on for a while, and I suspect their recent kibosh had more to do with domestic financial instability and a shaky power grid than ideology.

> Jerome Powell from the Federal Reserve has said from a video from 9/30/21 that he has no intention to ban crypto like China did, although it sounds like stablecoins may be regulated [2]

Yeah, and frankly, that may be enough to pop the bubble. I have long maintained the position that most price action in crypto is driven by rampant manipulation and un-backed stablecoin issuance. Once number stops going up, I don't think people will care at all anymore.

> The SEC has also already said in 2018 that Bitcoin and Ethereum are not securities [3].

Yes, Bitcoin is not a security because it's distributed solely by mining. Etherium is and always was a security, as it plainly fails the Howey test like every other ICO, in line with the formal guidance issued by the SEC. The SEC elected not to treat it as one, however. They have also indicated that every other ICO is at risk of being treated as a security.

> The head of the SEC, Gary Gensler, taught a course on blockchain for several years at MIT [4].

Yep, he's super smart, and I have a lot of respect for him.

> How do you think this technology is going to be completely banned, or everyone will forget about it and it will totally go away? The seeds are already planted, and as I said, there's no nipping this in the bud now.

I think stablecoins will be regulated, price action will subside and nobody will care anymore as we were on track to seeing before the printing spree of 2020. And I think most ICOs are going to get smacked down as unregistered securities offerings.

The China model of removing the bandaid would be much better though.

That's a best case though, and you could totally be right.

[rvense]

Maybe when cryptocurrency enthusiasts stop running around with bullhorns telling people about how they're going to save the world.

You're not saving anything. There are valid criticisms of the current financial system, but cryptocurrencies are not a good answer to them.

[luka-birsa]

The initial post is literally the flip side of the same coin.

We've had romantic Bitcoin maxis in the beginning, saying Crypto will change the world, we now have luddists screaming to stop the crypto as it will destroy the world.

Only a small portion of users are the Crypto maxis. And they truly can't care less about such posts. They might have been wrong about what Crypto means, but you cannot deny the use. BC is a reserve currency of a nation. EU is contemplating digital euro. People invented a way and are exchanging ownership of IP daily with various block chains.

Crypto is here. I highly doubt it its going away. Too much value and utility.

Perhaps it would be best to simply create a HN News policy to ban crypto related stuff as it really boils down to maxi-haters reiterating their views over and over.

But I do understand that is great for Karma farming.

[zenbai]

People should learn about how much money the Fed is printing these days.

Bitcoin is getting a lot of attention from a lot of very smart financial people around the world because they see that with so much USD being printed, inflation is bound to happen and Bitcoin is one of many ways they can hedge against it.

HN is where you can find great commentary about tech related stuff. But outside of that eg. financial matters .. no.

[skinnyasianboi]

A few years ago I was upvoting such articles myself, probably out of annoyance that I had known about Bitcoin since 2010 but had no financial interest in it. What got me into it was the open source aspect.

I expect that many users on HN have known about Bitcoins since the beginning and are upset that they didn't look into it years ago. Many will find their niche in it(smart contracts, NFTs..), younger people more so.

Stateless P2P open source currency is an incredibly powerful combination of words.

[graeme]

You don’t seem to have reflected on the article. If it’s wrong, surely it would be trivial to rebut even one of its points.

> which have of course shown that Bitcoin is not a ponzi

What are you referring to here? This would be a rebuttal if it exists, but to my knowledge no such thing does

> Just let Crypto users be

This is your main point of substance. But as another user pointed out, the collapse of the Albanian ponzi started a war and devastated a country.

Bitcoin, if it is the ponzi it appears to be, is the biggest ponzi in history.

It is unwise to merely leave ponzis alone. They’re illegal for a reason

[bb88]

> It's clear that the HN crowd does not like Bitcoin. So why keep reiterating similar arguments all over?

When we take a closer look at crypto it appears to be as corrupt or even more as the institutions it was trying to replace. Tether, of course, is the poster child of crypto corruption.

[kaczordon]

By this articles definition WeWork is a Ponzi scheme, as would most startups.

[arcticbull]

WeWork is, startups are not. This is also covered in the article.

[cerved]

wework is

[srge]

Exactly. And the argument crypto = ponzi is so wrong. What about other investment vehicles? Gold? Real estate? Stock market. Come on!

[arcticbull]

The article literally covers each of those cases and explains exactly why those are not Ponzi schemes while Bitcoin is ([edit] under "Common Objections" - which should really read "Common Whataboutisms").

> By that definition, stocks too are ponzis. No. Stocks have an external source of revenue, namely the profit that the company makes by selling its products and services to customers (not investors); and these profits eventually return to the investors through dividends or cash buybacks. In time, those profits are expected to exceed the amount invested, with a significant profit for all investors -- that is, they are expected to be positive-sum games. The market value of stocks reflects these expectations among investors. While some companies fail to achieve this goal, enough of them succeed to make stocks the favorite option of savvy investors.

> By that definition, real estate too is a ponzi. No. Like stocks, real estate creates value while it is being owned, namely the sheltering service it provides to those who live in it. That value returns to the investor (owner) either by him living in the property, or by renting it to others.

> By that definition, gold too is a ponzi. No, gold clearly fails to satisfy that definition on two counts...

[qez]

As per gold: I agree with that common objection. If bitcoin is a ponzi, so is gold.

> First, few if any gold investors have expectations of profits. They generally invest in gold as a hedge -- a "store of value" -- that they hope will retain its value in case other assets go sour.

First, this does not negate the comparison. Bitcoin could also be like that, and therefore not a ponzi. Second, I know a long of gold investors who would disagree with this opinion. Third, the market cap of gold is over 4x bitcoin, indicating that gold has already reached saturation, whereas bitcoin has space to grow.

> Second, as a commodity, gold HAS a source of revenue besides the investors; namely, the purchases by consumers like jewelers and industry,

This is a point that always gets brought up in discussions of gold. It is wrong and practically dishonest. Gold as jewelry does NOT drive the value of gold, by and large. And even if it DOES, the valuing of gold as jewelry material over any other similar-colored material is itself non-intrinsic/socially constructed. People like to own gold jewelry for the same reason people like to own bitcoin.

[arcticbull]

Yeah, I think you have a point regarding gold. I think the same way the author treats Bitcoin in regards to the way 'most people are using it' when defending its categorization should apply to gold as well.

Once we accept that the price is defined by speculators, the industrial and decorative applications of gold set a floor price rather than necessarily redefining the category.

There are a few key differences.

(1) Gold is zero-sum. Once out of the earth, it simply continues to exist. It produces nothing, consumes nothing, reacts with nothing, and doesn't really get lost or destroyed.

(2) On the other hand, if Bitcoin miners are turned off, 100% of the value evaporates instantly.

(3) Bitcoin therefore is negative-sum because miners require a steady influx of new capital in order to purchase coal to burn to 'secure' the network. This new capital is raised in the form of block rewards which are sold, exerting negative price pressure in the amount of ~$60M USD per day. If new capital stops coming in, Bitcoin bleeds value slowly, and then drops to zero all of a sudden.

The difference between a zero-sum vehicle and a negative-sum vehicle is enormous at the limit.

> People like to own gold jewelry for the same reason people like to own bitcoin.

I do disagree with this however, most people buy gold because it's shiny and a status symbol. They want others to see it. People buy bitcoin because number go up.

[zaidf]

(Nevertheless, investing in gold at the current price seems unwise, since its price is many times its "natural" price as commodity...)

You left out the most important and contentious part. It is not surprising because the author of the article itself made the single, most important point a fine print because it hurts their argument.

[arcticbull]

Oh, sorry, I didn't want my post to get long, however I also agree that investing in gold is unwise generally speaking. I don't believe in investing in unproductive assets period. Unintentional miss, and totally relevant, so thanks for adding that color.

[rob74]

Yup, but that explanation is not satisfactory IMHO. Of course stocks, real estate etc. have an "underlying value", but in case of a market bubble, these values lose all connection with reality, and some will profit while others (typically the late comers) will lose out when the bubble bursts. And Bitcoin's value is currenty overinflated in the same way...

[koonsolo]

Gold doesn't have a source of revenue.

[arcticbull]

The argument is that as a commodity that is consumed to produce jewelry (52%) and industrial (12%) that there is baseline demand for it, and thus it does have intrinsic value. I don't consider it a worthwhile investment, however.

[koonsolo]

Bitcoin seems to bootstrap its own value: you can store and transfer value, because bitcoin has value.

So as long as its value is > 0, it has intrinsic value.

[arcticbull]

I’d argue that’s still extrinsic.

[russianbandit]

To be fair, the article does address your questions.