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BitCoin....ponzi or a great new currency? (Original Post) dixiegrrrrl Apr 2013 OP
Let's see, an imaginary coin, with no sovereign backing, based on nothing more than hot air, MadHound Apr 2013 #1
Seems to good to be true, so I want to know more before Cleita Apr 2013 #2
Bitcoin crashes, losing nearly half of its value in six hours DJ13 Apr 2013 #3
According to several sites, that was result of DDS attack.. dixiegrrrrl Apr 2013 #5
According to Mt.Gox, their site couldn't keep up with the demand for trading muriel_volestrangler Apr 2013 #12
Thank you for "mining" all that impressive info! dixiegrrrrl Apr 2013 #13
And that makes everything better? Javaman Apr 2013 #15
ingenious.. Phillip McCleod Apr 2013 #4
bit coin miner virus epidemic infecting thru Skype.???????? dixiegrrrrl Apr 2013 #6
yeh here's a link.. Phillip McCleod Apr 2013 #8
Scam. MineralMan Apr 2013 #7
They remind me of the Itchy & Scratchy Land episode of The Simpsons. Initech Apr 2013 #9
I say PONZI because Wall Street is Speculating in it and Driving it Up.. KoKo Apr 2013 #10
Well, as a currency it is a bust, since it can be made to rise and fall in value. dixiegrrrrl Apr 2013 #11
*not* a ponzi. ponzi is ponzi.. bitcoin is bitcoin. Phillip McCleod Apr 2013 #14
from everything I have read about it. Javaman Apr 2013 #16
Not a scam. Not a Ponzi scheme (by definition). Nye Bevan Apr 2013 #17
I'm thinking people who are calling this a Ponzi have no idea what a Ponzi scheme is. dairydog91 Apr 2013 #18
Good point....I should have used word "bubble" dixiegrrrrl Apr 2013 #19
 

MadHound

(34,179 posts)
1. Let's see, an imaginary coin, with no sovereign backing, based on nothing more than hot air,
Wed Apr 10, 2013, 06:05 PM
Apr 2013

Yeah, I'd say it is a scam of major proportions.

dixiegrrrrl

(60,010 posts)
5. According to several sites, that was result of DDS attack..
Wed Apr 10, 2013, 06:23 PM
Apr 2013

This is what Tech Crunch says:
But another San Francisco-based exchange called TradeHill is saying that the crypto-currency is falling because of apparent distributed denial of service attacks on Mt. Gox and Bitstamp. A denial of service attack happens when an attacker overwhelms a target with external requests, so that it can’t honor regular requests from legitimate users.

The Tokyo-based exchange said last week that hackers are engaging in a strategy to manipulate the price of the currency: “Attackers wait until the price of Bitcoins reaches a certain value, sell, destabilize the exchange, wait for everybody to panic-sell their Bitcoins, wait for the price to drop to a certain amount, then stop the attack and start buying as much as they can. Repeat this two or three times like we saw over the past few days and they profit.”
http://techcrunch.com/2013/04/10/bitcoin-crash/

Yikes....certainly not a trust inspiring virtual currency, then.

muriel_volestrangler

(101,146 posts)
12. According to Mt.Gox, their site couldn't keep up with the demand for trading
Thu Apr 11, 2013, 09:27 AM
Apr 2013
First of all we would like to reassure you but no we were not last night victim of a DDoS but instead victim of our own success!

Indeed the rather astonishing amount of new account opened in the last few days added to the existing one plus the number of trade made a huge impact on the overall system that started to lag. As expected in such situation people started to panic, started to sell Bitcoin in mass (Panic Sale) resulting in an increase of trade that ultimately froze the trade engine!

To give you an idea of how impressive things were here are some numbers that we would love to share with you guys:
- The number of trades executed triple in the last 24hrs.
- The number of new account opened went from 60k for March alone to 75k new account created for the first few days of April! We now have roughly 20,000 new accounts created each day.

https://www.facebook.com/MtGox/posts/455962117821534?_fb_noscript=1


Tech news site Ars Technica linked the crash to the antics of an anonymous Bitcoin owner who gave away around $13,000 in Bitcoins via the Reddit social news site. The unnamed person, who used the alias Bitcoinbillionaire on Reddit, randomly picked 13 different people to receive the coins. One lucky Redditor got a gift of about $5,000 (£3,250).

The vast increase in interest in Bitcoins is also creating problems for some established members of the digital cash community.

Bitcoins are created, or mined, when computers complete a complicated mathematical problem. Many individuals have pooled their computer power to ensure this mathematical work is completed more quickly.

But the rising value has meant the MT Red mining pool, which is co-ordinated via Reddit, cannot keep up with its financial obligations to its pool members and is shutting down. The "soaring price" has made it impossible for MT Red to cover what it owes to members, an administrator said.

http://www.bbc.co.uk/news/technology-22105322


which doesn't inspire any more trust, if you ask me.

Javaman

(62,438 posts)
15. And that makes everything better?
Thu Apr 11, 2013, 12:19 PM
Apr 2013

having an imaginary currency backed by nothing but good wishes and no regulation and vulnerable to hacking is a good investment how?

Like a told someone else on here a few days ago, investing in bitcoin by the masses is much like how people invested in the market via margin buying back in the 1920's.

People were convinced back then that anyone could be a millionaire. In reality, only the millionaires were millionaires as they continued to manipulate the market to their favor and screw the morons.

The winners? The ones that bought on short. And I can tell you right now, if there is a way to buy bitcoin on short, a lot of very smart non-gullible people just made a boat load of imaginary money then quickly laundered it out of the country.

While those who bought recently just got completely screwed.

the song remains the same.

 

Phillip McCleod

(1,837 posts)
4. ingenious..
Wed Apr 10, 2013, 06:14 PM
Apr 2013

..and thoroughly misunderstood. Its a crypto based currency. The coincidence not mentioned.. there's a bit coin miner virus epidemic infecting thru Skype. Gee.. wonder if that's related?

Initech

(99,909 posts)
9. They remind me of the Itchy & Scratchy Land episode of The Simpsons.
Wed Apr 10, 2013, 08:24 PM
Apr 2013

The clerk convinces Homer that the park's currency Itchy & Scratchy dollars are just like real money. So he exchanges for $1100 worth only to go into the park and there's signs posted "NO ITCHY & SCRATCHY DOLLARS!!!". "D'oh!!!!"

KoKo

(84,711 posts)
10. I say PONZI because Wall Street is Speculating in it and Driving it Up..
Wed Apr 10, 2013, 08:55 PM
Apr 2013

Not saying that "localy currency exchange" is not good...but, when the financial shows on MSM (CNBC/Bloomberg) start talking about it as a controversy....WATCH OUT! I survived the "Dot Com Bust" and so I'm wary of what sounds like that time coming from Wall Street.

Especially since they capture the hopes of many out here who would love to have a Substitute Currency that can bypass the FED and their terrible policies.

But...LOOK OUT! And if you Trade It...make sure you have proper Stops...

dixiegrrrrl

(60,010 posts)
11. Well, as a currency it is a bust, since it can be made to rise and fall in value.
Wed Apr 10, 2013, 09:01 PM
Apr 2013

Even if those ups and downs are due to speculators.

IMHO....

 

Phillip McCleod

(1,837 posts)
14. *not* a ponzi. ponzi is ponzi.. bitcoin is bitcoin.
Thu Apr 11, 2013, 11:07 AM
Apr 2013

..read and learn what it is before sounding off, plz. otherwise 'we' look ignorant.

you don't have to like it, but it is what it is, and what it is ain't ponzi.

http://en.wikipedia.org/wiki/Bitcoin

Javaman

(62,438 posts)
16. from everything I have read about it.
Thu Apr 11, 2013, 12:33 PM
Apr 2013

It strikes me as it's an easily manipulated product with virtually no regulations or control. Those who have the most can control whether it rises or falls.

And since it's also subject to DOS attacks how does that make that something stable to invest in?

As I wrote above, this has all the same earmarks of how the market as controlled and manipulated by the rich back in 1929.

Nye Bevan

(25,406 posts)
17. Not a scam. Not a Ponzi scheme (by definition).
Thu Apr 11, 2013, 12:42 PM
Apr 2013

But certainly a bubble. At least tulip bulbs grew into pretty flowers.

dairydog91

(951 posts)
18. I'm thinking people who are calling this a Ponzi have no idea what a Ponzi scheme is.
Thu Apr 11, 2013, 01:06 PM
Apr 2013

This isn't a Ponzi, which is usually structured as a series of promises of risk-free, high-return investments. The person running the scheme purports to have some sort of magically good investment vehicle which causes investments to jump in value. In practice, the initial group of investors are paid off with money chipped in by the next group of investors; the next group of investors is then paid off with money collected from the investors who jumped in even later. The scheme continues until the scheme runs out of new investors, at which point all of the people who entered into the scheme late-in-the-game get nothing.

This is more like speculation in magic beans. I could certainly sell or give away magic beans to people on the street, at which point they could try to trade away those beans. If people think that the value of magic beans will go up, they will buy magic beans in the hope that the value will appreciate (And the beans can then be sold for capital magic beans gains). It's unstable, and if it turns out the value of magic beans is $0 or something similar there will be a massive burst of this speculative bubble, but it's not a Ponzi by any means.

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