The Bitcoin Bubble (and how it is a setup to rip people off)

I the author of the following article (yeah I know it's a wordpress site, but guess what, I do this stuff full time so in a sense it is "alternative media" and I resent having to post here as opposed to the alternative media forum):
dissembling.org...

This was in response to Adam Kokesh's video regarding Bitcoin, promoting it. WOW! Come on guys we need to think more strategically than the banking and political scum presently running the show. I'd hate to break it to everyone, but the elites are 10 moves ahead, and it is time for the truther community to engage in some serious forward thinking!



To anyone aware of computing, and how moore's law applies to computers, that is double the power every year to year and a half or so. This law remains true until one enters the realm of quantum computing!

The number crunching potential of dwave's 256 qubit computer is 2 to the power of 256 times less powerful than their 512 qubit computer which they now have out. This isn't just double the power, it is double times every extra qubit, and double the qubits within a year or two. Moore's law on steroids, which only the rich can afford. And that is what makes bitcoin a dangerous currency to invest in, because the mining aspect of it gives all of the advantage to those who can afford a dwave or real quantum computer. Has the price dropped much from the $2 million it was last time I checked?

I want to hear people's thoughts on this, and especially from the more technologically inclined folk I've ran into here (especially on the fukushima threads).

Do you think perhaps there is something fishy about the anonymous inventor? Do you think this currency is safe? Do you think hacking is the only way to damage it's value and steal?

With credit cards and electronic transfers, things can go wrong. Luckily, there are legal avenues to protect both consumers and banks in the event of hacking/missing data.

With Bitcoin, gimme your money. Oops! We deleted your account balance. Prove otherwise.

Originally posted by DaTroof
With credit cards and electronic transfers, things can go wrong. Luckily, there are legal avenues to protect both consumers and banks in the event of hacking/missing data.

With Bitcoin, gimme your money. Oops! We deleted your account balance. Prove otherwise.

Bingo! If Bitcoin makes something disappear, I suspect it'll implode everything. Good luck to the courts dealing with the flood of victims if that ever happens. They would never be-able to handle the volume or complexity.

Bitcoins go into a bitwallet. The thing about having a bitwallet is that it is synchronized with every. single. bitcoin. transaction that ever took place. This provides a ridiculous amount of redundancy. The ledger contains every single transaction and every unlocked block - there are literally hundreds of millions of copies of the ledger around the world.

Yes, you can lose your bitwallet if you're an idiot. If you encrypt and backup you're fine.

In many ways, considering the economic climate of today, having bitcoins in a bitwallet is safer than having money in the bank.

No offense, but the three posts ahead of me don't seem to understand how the bitcoin system works.

reply to post by TinkerHaus


Oh, I get it perfectly. It's a scam.

Bitcoins are nothing more than a modern day pyramid scheme... it's just so bloody hard for people to understand and prove.
The revenue trickles upwards rewarding the most to those who started the game or got a head start. Those earning the least is those people joining up now.

But like in every other scheme, there's always a lucky smuck who got in at the right time... maybe simply because of pure luck and was able to ride the Litecoin and all the other BS currencies before it got popular.

A simple computer you could buy in what ever store is going to take forever to reward a simple block of BTC. In order to get a small amount even you would have to join a pool of people.

But those really riding the train (even controlling it) are those with the capital already... this is NOT the common mans salvation from bank controlled currency. Do not make the mistake of assuming that!

Originally posted by TinkerHaus
Bitcoins go into a bitwallet. The thing about having a bitwallet is that it is synchronized with every. single. bitcoin. transaction that ever took place. This provides a ridiculous amount of redundancy. The ledger contains every single transaction and every unlocked block - there are literally hundreds of millions of copies of the ledger around the world.

Yes, you can lose your bitwallet if you're an idiot. If you encrypt and backup you're fine.

In many ways, considering the economic climate of today, having bitcoins in a bitwallet is safer than having money in the bank.

No offense, but the three posts ahead of me don't seem to understand how the bitcoin system works.

edit on 5-4-2013 by TinkerHaus because: (no reason given)

No it's not, because since the BTC is not backed up by any real commodity people will at some point realise that a bubble is appearing and lose faith in it, and unlike a so-called "real" currency, Bitcoins are NOT and will never be too big to fail, regardless of the amount of blocks being mined out.

Lets put this bitcoin scheme into perspective, shall we ?
So, here's 2 very simple questions to all you bitcoin enthusiasts and devotees ...

Assuming I'm using an average pc (say, quad core, decent graphics card and 4Gb ram), how long would it take me to "mine" just 1 bitcoin ?
An hour ? ... a day ? ... a week ? ... a month ? ... or longer ?

And would the cost of electricity used be more than the value of the bitcoin obtained ?

People just need to maintain their faith in Bitcoin, otherwise it will most definitely fail.

And just wondering what anyone thinks would happen to the value of the Bitcoin in a sudden economic collapse?

reply to post by TheLastStand

And that is what makes bitcoin a dangerous currency to invest in, because the mining aspect of it gives all of the advantage to those who can afford a dwave or real quantum computer.

I don't see how this really relates to the issue of bubbles at all... but there is a good thread on the bitcoin forum which talked about this:

I'm intrigued by the possibility of a quantum Bitcoin mining platform. Quantum computers have already been theorized to be able to break the underlying mathematics behind hashing algorithms (see Shor's Algorithm.) Could quantum computers mine for Bitcoins at a much higher rate than what is achievable today?

Shor's Algorithm applies to prime factorization, which SHA256 doesn't use.

What you're looking for to crack SHA256 is Grover's Algorithm. Basically under classical models of computation the optimal way to find a matching hash is to simply search through the entire space yielding O(n). Under Quantum Computing the optimal time is O(n^0.5), which means effectively you have halved the key-length.

For SHA256, it effectively becomes SHA128 to a Quantum computer. Now the question remains, can a Quantum search for SHA128 faster than a classical computer search through SHA256?

With our current technology and for the foreseeable future, we still cannot build a Quantum computer that can yet begin to tackle this problem, let alone solve it in a time within our lifespan.

Thus SHA256 is considered "secure enough" for now.

It's also important to keep in mind that many other systems rely on the SHA256 hashing function for security, including most banks.

Originally posted by TheBlue
People just need to maintain their faith in Bitcoin, otherwise it will most definitely fail.

And just wondering what anyone thinks would happen to the value of the Bitcoin in a sudden economic collapse?

edit on 5-4-2013 by TheBlue because: (no reason given)

Faith, faith in a new created digital currency... Therein lies the problem for all currency.

reply to post by TheLastStand

I like Adam.

Good thread in the light of all the recent bitcoin drama.

I brought it up as well here:

www.abovetopsecret.com...

reply to post by flice

In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.

A ponzi scheme is a zero sum game. In a ponzi scheme, early adopters can only profit at the expense of late adopters, and the late adopters always lose. Bitcoin has an expected win-win outcome. Early and present adopters profit from the rise in value as Bitcoins become better understood and in turn demanded by the public at large. All adopters benefit from the usefulness of a reliable and widely-accepted decentralized peer-to-peer currency.

Bitcoin Myths

The European Central Bank released a report last year titled Virtual Currency Schemes in which they state "there is no central organiser that can undermine the system and disappear with its funds". They also note that "the scheme does not promise high returns to anybody", a key characteristic of a Ponzi scheme.

EDIT: and my own thoughts on the situation:

Yes many of the early miners are probably fairly wealthy now because the mining difficulty was much lower back then when the total network hashing power was much lower. But really it's the same thing with almost anything. The first people to mine gold benefited the most because it was easier to find. The early investors of a successful business benefit the most because shares are much cheaper. The early bird always gets the worm, as they say. But they took the risk and invested their time and money into the mining equipment or the business they invested in. The early adopters always have to take a larger risk and thus they are generally rewarded much better. The early adopters of bitcoin dedicated their computing power to the bitcoin network to help secure it when it was in its most vulnerable stage. It was always open source and completely public, open to anyone who wanted to join the party.

Originally posted by tauristercus
Lets put this bitcoin scheme into perspective, shall we ?
So, here's 2 very simple questions to all you bitcoin enthusiasts and devotees ...

Assuming I'm using an average pc (say, quad core, decent graphics card and 4Gb ram), how long would it take me to "mine" just 1 bitcoin ?
An hour ? ... a day ? ... a week ? ... a month ? ... or longer ?

And would the cost of electricity used be more than the value of the bitcoin obtained ?

Well thats how to start off with, I have a Mac, and my video card isn't that great, I get 29 M/s which sucks, and will take a long time to get a bitcoin.

I loaded up my 3 GHZ server, no graphics card - so its running on CPU power, that sucks, because its going at 420 K/s.....

So to answer your question - it could take a while, but if you have a decide GPU, then a lot sooner than most. a mate I know gets 420 M/s... thats not bad, when i get 29 M/s...

So I'm investing in a Butterflylabs device... Bitcoin mining hardware - made for Bitcoin mining, there's one for $274USD , clocks at 5 G/s ... The other devices are here products.butterflylabs.com... - they can clock at between 25 G/s to... 1500 G/s. The price on the 1500 one isn't there, because its out of stock, but I saw the price when it was in stock, it was around $29,000.

So ... you can make your money back and then some, but as tinkerhaus said - EVERY computer that has the bitcoin software has EVERY block available to man - (well unless we get into conspiracy theories). Meaning its impossible with the public system for anyone to do anything illicit. The only downfall is... If someone hacks your computer - and downloads the 8GB wallet to their computer.... which they could have if you don't encrypt your wallet, then you basically lose your bitcoins - I was told someone lost 1/4 of a Million dollars this way....

I've just stretched what I know about bitcoins, so don't ask hard questions as I won't be able to answer them lol

Originally posted by DaTroof
With credit cards and electronic transfers, things can go wrong. Luckily, there are legal avenues to protect both consumers and banks in the event of hacking/missing data.

With Bitcoin, gimme your money. Oops! We deleted your account balance. Prove otherwise.

OMG another one that doesn't 'get' Bitcoin. Are you telling me banks have never 'lost' your money?
Famous Southpark quote [true in a way]: "Aaaand it's gone".

The reason your money can disappear from your bank is because it is not real, most of it is electronic and is not backed up by gold as you may believe. Bitcoins are FAR safer than your made up out of the blue currencies.

Please educate yourself before making infantile comments people.

reply to post by Hecate666

Bitcoins are FAR safer than your made up out of the blue currencies.

So what is Bitcoin again?

Originally posted by flice

Originally posted by TinkerHaus
Bitcoins go into a bitwallet. The thing about having a bitwallet is that it is synchronized with every. single. bitcoin. transaction that ever took place. This provides a ridiculous amount of redundancy. The ledger contains every single transaction and every unlocked block - there are literally hundreds of millions of copies of the ledger around the world.

Yes, you can lose your bitwallet if you're an idiot. If you encrypt and backup you're fine.

In many ways, considering the economic climate of today, having bitcoins in a bitwallet is safer than having money in the bank.

No offense, but the three posts ahead of me don't seem to understand how the bitcoin system works.

edit on 5-4-2013 by TinkerHaus because: (no reason given)

No it's not, because since the BTC is not backed up by any real commodity people will at some point realise that a bubble is appearing and lose faith in it, and unlike a so-called "real" currency, Bitcoins are NOT and will never be too big to fail, regardless of the amount of blocks being mined out.

edit on 5/4/13 by flice because: (no reason given)

Show me a currency that is actually backed by a real commodity. Bitcoin is an experiment - bitcoins only have a value because people are willing to accept them for goods and services - just like ALL fiat currencies. If you don't like the bitcoin program, don't participate. It's not difficult to mine for them, but there are other ways to get them as well (selling goods or services, trading, etc).

As Im a Marty pointed out there are devices available to consumers now that were specifically designed to mine bitcoins. I get about 330-340 Mhash/s with a Radeon 7850 - I used to mine bitcoins years ago at about 1/10th of that rate.

As of RIGHT NOW a single bitcoin is worth about $140. I can mine a bitcoin in a week as part of a pool. Yes, the value fluctuates but that can be said for any FIAT currency in relation to another. As with any "investment" (I'm not calling bitcoins an investment, although some people use them as such) you have to weigh the risk versus the potential gain. If the gains don't seem adequate in relation to the risk for you, either through misunderstanding or an educated risk analysis, then don't participate.

To me it's obvious why a bitcoin is worth $140 USD. The USD is printed and re-loaned through perpetuity because of fractional reserve banking and an irresponsible issuing authority. There are literally INFINITE USD over a given time, while the bitcoin program was meant to offer diminished returns over time. This means there are a limited quantity of bitcoins available, which based on my Introduction to Economics class, should keep the price raising in relation to the USD over time.

Chrisfishenstein
reply to post by Hecate666

 

Bitcoins are FAR safer than your made up out of the blue currencies.

So what is Bitcoin again?

Currently $1100AUD per coin.

but I know, they were going to crash.. at $250.. I remember.

I bought 20 bitcoins when they were around $20. I just cashed them in because I needed the cash, I suspect it's going to climb even higher.

I love the idea of Bitcoin, when governments and big banks don't like it, then that's all I need to know that it's a good thing for the people.

When it comes to money, everything is rigged. You're either are smart enough or lucky enough to find ways to get more of it or you play the game like a sucker and scrape by. Your choice.

reply to post by TheLastStand


I mine (using an ASIC rig) and trade BTC and the current prices are really good for me. I got in to trading them when they cost next to nothing and made a point of saving 50% of everything I mined or traded to wait for the prices to increase, which they now have.

LTC are going to be the next big thing IMHO. My "business partner" was trading LTC yesterday for around £30 (give to take a couple of quid) and he's making a killing.

BTC mining and trading really is the way forward, but it won't last for long...unless the rumours about China are true.

Rev