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Bitcoin is a fraud and unsustainable technology


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#1 NAV

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Posted 19 December 2017 - 11:44 PM

Bitcoin is a fraud conceived and executed successfully by the Silicon valley nerds. Forget about the mania aspects of it, the underlying technology as it stands today is not sustainable economically.

 

Bitcoin was supposed to eliminate the middleman (banks, brokers etc) which would lead to zero or near zero transaction fees.

- BIG LIE - Current transaction fees for bitcoin ranges from $12-$20. It could go higher with higher mining costs

 

Bitcoin could be used as a currency to buy products and services.

- As it stands today, it is practically of no use w.r.t to buying any goods or services, given the ridiculous transaction costs

 

Bitcoin is a store of value

- Yes, only until the last of the fools realize they are the bagholders.

 

Bitcoin mining a.k.a proof of work is one fo the most inefficient technologies out there. This was a technology used to prevent denial of service attacks. Somehow the bitcoin nerds convinced the world that it could be used in blockchain. At the current rate of bitcoin growth, it's projected by 2020 all energy produced in the world would be used just by the bitcoin miners. This is just for bitcoin ! Imagine if we have a host of other apps based on blockchain technologies, using the current mining concept, it would mean the end of the road for this technology. We just don't have the required energy on this planet to support it. 

 

Now how did these incredibly smart nerds not realize this ? Did they not know that eventually there would be more miners and there would be increase in computing power of the miners, which would lead to more complexity in the puzzles that the miners solve, which would lead to exponential energy needs ? Besides, in the mining world, the winner gets it all. So all the mining done by the rest of miners go waste. What an incredible energy-wasteful technology congame this is ? Well, it's not that the creators did not foresee this or not know this. High Technology has become a con game of exits. Create something which most common folks do not understand, create a buzz around it, market it and exit before the crowd realizes. If you successfully do that, before the rest of the world emulates you, you are considered a winner, even if the technology or the enterprise go bust after you exit. That's what happened with dot com in 2000. More than 5000 companies closed in just the SF bay area alone. It's all about exits !. Sometimes, they cannot exit fast enough, they get trapped in their own making - like the CDOs during the mortgage bubble. Sometimes, they start believing in their own delusions.

 

Now confronted by this big question, Ethereum folks are talking about moving to a different mining scheme based on something more geeky "Proof of stake". This is an unproven technology and there's no consensus among the technology folks as to whether it's secure when it comes to double spending, maintaining the mutability/integrity of blockchain. "Proof of stake" also casts doubts on the whole decentralized appeal of the technology.  So they really do not have an economically viable solution at this point for achieving distributed consensus. But they are promising that this is the future and will disrupt the financial industry the way we know it. Really ? Without a solution on hand ? And raise billions of money on a economically non-viable protocol ?

 

Don't get me wrong. There are some great stuff happening in technology - big data, ioT, Nanotech, Quantum computing, Deep learning, Driverless cars, AI et al. 

 

But this blockchain seems like a big fraud at this point. Yes, we could come up with some viable solutions in the future or NOT. We could move to an entirely different paradigm. But would you lend me billions based on a promise of something that could happen in the future for which there is no viable solution in present ? Yes, as long as the system is flooded with money, you would. 

 

This is my last rant on bitcoin. Now, enjoy the bubble while it lasts.


Edited by NAV, 19 December 2017 - 11:46 PM.

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#2 NAV

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Posted 20 December 2017 - 12:36 AM

 

 

But this blockchain seems like a big fraud at this point.

Sorry, i mean't bitcoin is a fraud, not the blockchain.

 

Blockchain is a viable technology once they find a alternate to "proof of work" which the bitcoin uses today. "Proof or work" based blockchain is not a economically viable solution.

 

For the geeky types here's "proof of stake" proposed by Ethereum, if you can understand it. biggrin.png

 

https://github.com/e...of-of-Stake-FAQ


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#3 MikeyG

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Posted 20 December 2017 - 12:55 AM

https://www.cnbc.com...or-bitcoin.html



#4 NAV

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Posted 20 December 2017 - 07:49 AM

And i am yet to see a criminal bank or middleman who charges $20 to transfer $50 of money. Now in the last 4 months of transaction explosion, the blockchain folks are starting to look like the criminals, that they were trying to eliminate in the first place. Now we are talking about a puny bitcoin capitalization of $300 billion dollars. Imagine where would the transaction costs be if the market cap of bitcoin goes to trillions. One word - UNSUSTAINABLE !

 

Well, the bitcoin nuts will be all over me when they read this. But the truth is in this chart. You cannot argue with it. Amazing !

 

https://bitinfochart...actionfees.html

 

 

On the Ethereum blockchain, it's getting warmed up. As more smart contracts are deployed on this blockchain, things are going to get worse. So i pay $1.2 for every transaction on the smart contract.

 

And then there are these fraud ICOs promising social networking on blockchain. What ? Every like would cost $1.2. Every post would cost $1.2 to the users of the social network ? Who in the hell is going to bear these costs ? The users of the network ? Keep dreaming !. All white paper fraud, playing in front of our eyes.

 

https://bitinfochart...actionfees.html

 

 

You see hockey sticks everywhere !


Edited by NAV, 20 December 2017 - 07:52 AM.

"It's not the knowing that is difficult, but the doing"

 

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#5 NAV

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Posted 20 December 2017 - 07:51 AM

We are in the epicenter of wave 3 in blockchain transaction costs laugh.png redbull.gif


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#6 NAV

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Posted 20 December 2017 - 07:58 AM

And look at this. The mining profitability has been decreasing over time, while the transaction costs are increasing. So where is all the transactions costs dissapearing ?

 

https://bitinfochart...fitability.html

 

We are burning it folks !  It's all spent towards electricity. It's one the most wasteful schemes that silicon valley has designed. Huge carbon footprint ! Technology is supposed to enrich our lives, make it more efficient, not less. Here we have a cartel of miners solving stupid puzzles to enable a digital gambling operation, a digital ponzi scheme, which adds no value whatsoever to our lives (gamblers and money launderers excluded).


Edited by NAV, 20 December 2017 - 08:01 AM.

"It's not the knowing that is difficult, but the doing"

 

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#7 MikeyG

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Posted 20 December 2017 - 09:56 AM

Market cap of Cryptos at $630B up 5% from yesterday. We are going to $1T and eventrually $10T

 

https://coinmarketcap.com/

 

 

The kinks that NAV lays out are being worked on and will be fixed. 

 

Put it this way. 

 

I was at an office Christmas party recently. We got my boss a gift card where 10 of us chipped in $20. My peer bought the $200 GC and collected $20 from each person. Some people mailed the money before the party, which takes days.

 

Then when we all met and she had to collect, some people didn't have the money and had to go the ATM. Some people she had to make change for, the whole process took time. This generation doesn't want to take time on anything! 

 

How much easier would have been if my peer said, send me 1/8 of Litecoin and call it day!  

 

This is the new money, make no mistake about it. There is nothing backing up our paper money, since there is no gold standard. 

 

 

In addition, the charts are bullish. 



#8 NAV

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Posted 20 December 2017 - 11:45 AM

Last but not the least, the scalability issues. There are ICOs out there promising to build stock/commodity exchanges, Auction marketplaces like ebay  replacing existing payment systems, etc based on existing blockchain technology like Ethereum. The current transaction rate per second on Ethereum is less than 10. With 10 transactions per second, they are promising the moon to their investors. Geez ! All based on fuzzy whitepapers, most of which are not peer reviewed, with no formal proofs for their ideas. Just like the dot com era, when the CEOs of these companies had no clue how they would make money from their business. Hey at least the dot coms has solid technology, which was proven and scalable. Here we do not even have a technology, which is scalable. It's all theories floated around at this point. But that does stop them from collecting hundreds of millions in ICOs. It's daylight robbery.


Edited by NAV, 20 December 2017 - 11:47 AM.

"It's not the knowing that is difficult, but the doing"

 

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#9 SemiBizz

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Posted 21 December 2017 - 09:44 AM

So if I understand this correctly... Blockchain is a distributed perpetual archiving system...

 

And we're going to expend the majority of the energy and bandwidth on the planet growing it...

 

It is like cancer, it will clog up everything everywhere, and if anything could ever create a catastrophic internet failure, this is it.

 

So prepare for that...

 

I wonder how long it will take?


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