[Chugalug] A comment on the Bitcoin .. fraud

Randy Yates lpcustom at gmail.com
Mon Apr 15 14:58:56 UTC 2013

Studying economics is like studying the opposite gender. As soon as you
think you're an expert, you find out you don't have a clue.

On Mon, Apr 15, 2013 at 10:52 AM, Lynn Dixon <boodaddy at gmail.com> wrote:

> Stephen,
> I didn't mean to direct my comments towards you, at all.  It's just the
> huge number of folks writing articles on the web only seem to use a small
> resource pool for their investigations in Bitcoin. Most of the time, they
> will use the Bitcointalk forums since those results pop up highest in
> Google searches.
> Usually those folks are pretty crafty when it comes to writing blog posts,
> and they can, on the surface, present a good argument.  Albeit based on
> half-correct or wrong information. Then you have people whom maybe be
> slightly interested in Bitcoin looking into the currency, and they stumble
> across these articles and learn mis-information.  That's where my
> frustrations lie.
> Feel free to criticize bitcoin, it does indeed have its flaws.  Firstly, I
> think its a bit cumbersome for simple transactions like buying stuff at the
> convenience store. Granted, there are alot of folks working on alot of cool
> projects to fix this, but for right now, it's not very easy.
> I use Bitcoins in FOREX mostly.  I also use it as another investment
> vehicle. But thats just my use cases.  I like the idea of a currency's
> value being dependant upon its demand. We know the supply to be constant,
> so therefore the exchange prices are solely driven on demand.  There's no
> fiscal or monetary policies being controlled by a government to regulate
> the currencies value. This is why alot of the Keynesian economists say its
> a bunk currency.  Since there is no way a controlling body can regulate the
> supply of the currency, most Keynesian's will generally discredit it.  The
> demand driven currency ideals flys right in the face of Keynesiasts.   With
> that being said, demand driven prices do tend to "bubble" more easily since
> there is no way to control the supply to mitigate the forming "bubbles".
>  Again, this is what *some* economists will steer clear of demand driven
> ideas.
> If we look at the price over time, we really only have two "bubbles" in
> the entire bitcoin history.  We had the first bubble that formed almost 2
> years ago, when the price spiked to $33ish.  Then we have the one that
> happened just recently, when it spiked to $266.
> http://bitcoincharts.com/charts/mtgoxUSD#rg360ztgSzm1g10zm2g25zv   <---
> This shows the price over a 1 year period.  That's a pretty steady trend up
> until a few weeks ago. There is only one "bubble" that peaked at $266.
> http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zv  <---- This
> shows ALL the data that www.bitcoincharts.com has collected, which covers
> about 32ish months of statistics. Again, we only see 2 bubbles.  The one at
> the $33ish mark, and the other at $266 that happened recently.
> Both of those charts even shows some impressive stability in the currency.
>  If you look at the very tall red bars, you will see massive sell-offs.
>  For the most part, those massive sell-offs didn't offset the price of the
> currency very much at all (disregarding the cool-off period after the first
> bubble of course).
> This last bubble was a combination of a huge increase in demand for the
> currency mostly because there was ALOT of press recently about it.  With
> Cypress failing, the Euro having problems, and the other myriad of economic
> problems, the press had a field day with bitcoin, causing a huge inrush of
> new investors.
> On Mon, Apr 15, 2013 at 10:18 AM, Stephen Kraus <ub3ratl4sf00 at gmail.com>wrote:
>> And Lynn, I think you are probably one of the smartest people here, so I
>> find it hard to criticize your argument because they are usually fairly
>> well thought out.
>> My other big thing with Bitcoins is the rapid inflation. I mean look at
>> that guy who paid for a pizza in bitcoins a couple years ago, the amount he
>> paid for the pizza would now be worth hundreds of thousands of dollars!
>> Even inflation from the early 1900s to now isn't nearly that bad.
>> On Mon, Apr 15, 2013 at 10:10 AM, Stephen Kraus <ub3ratl4sf00 at gmail.com>wrote:
>>> I criticize it because numerous economics professors criticize it.
>>> Look, I'm all for you doing Bitcoin, its your time and your processing
>>> power, not mine.
>>> But lets be perfectly honest: When a bunch of people who spend their
>>> entire lives studying economic systems inside and out say its a waste and
>>> it will lead nowhere, I'm of the mind to take their opinions into account.
>>> Especially when a Nobel Laureate is saying so.
>>> Right now, I've watched the Bitcoin trends from Mt. Gox and it is bouncy
>>> as hell, repeatedly bubbles then pops. It doesn't matter how often it
>>> spikes if it cannot stay consistent at a certain value for long or trends
>>> rapidly up and down.
>>> Just read this thread, ignore some of the goofiness and listen to some
>>> of the people in it. I find their opinions seem to reflect a lot of people
>>> I know in the economics fields:
>>> http://forums.somethingawful.com/showthread.php?threadid=3543334&pagenumber=70#lastpost
>>> On Mon, Apr 15, 2013 at 9:29 AM, Lynn Dixon <boodaddy at gmail.com> wrote:
>>>> What is surprising to me is the vast number of people that will jump in
>>>> and criticize the currency after doing no research on it.  They will read a
>>>> few articles on the web, or maybe even some horrid bitcointalk forum posts
>>>> and simply make an assumption that is usually incorrect.
>>>> The currency works, and works well. I have been mining for a while now,
>>>> nearly two years, and I have personally made some impressive returns.  I
>>>> have also used the currency quite a bit. I have used it as a vehicle of
>>>> exchange when dealing with foreign currency, I have used it as a vehicle of
>>>> exchange for goods and services, and I even accept bitcoin as payment for
>>>> my web hosting company.
>>>> On Mon, Apr 15, 2013 at 8:02 AM, Mike Robinson <
>>>> miker at sundialservices.com> wrote:
>>>>> These are just my thoughts – but I see a bully pulpit here, and I'll
>>>>> be brief.
>>>>> If you wanted to fleece a bunch of nerds, how would you do it?  Well,
>>>>> first of all, you'd promise them, one way or another, "easy money."  In
>>>>> fact, knowing that many of them spend hours each day in gam-environments
>>>>> where guns never run out of ammo, you'd promise them "make your own money."
>>>>>  An altogether synthetic currency system.  "World Money, Release 2.0."
>>>>> You'd slow-roll the whole thing.  Just toss the ball out onto the
>>>>> field almost unmentioned.  Aside from the obvious need for plausible denial
>>>>> when the sheet hits the fan, you're playing hard to get, in the form of a
>>>>> cryptographic-based puzzle that can only be brute-forced, but that can be
>>>>> shown to be solvable.  Add a few more promises – that the supply of this
>>>>> "money" will always be limited (never mind how) – and wait for the
>>>>> Powerball Effect to take hold of its own accord.  A very large number of
>>>>> paper cards are thrown away near my driveway, because I live on a country
>>>>> road about a quarter-mile from a convenience store.  I pick them up by the
>>>>> hundreds.
>>>>> Meanwhile, start selling supplies .. for real money.  And books, of
>>>>> course.  Every now and then, grab a quiet instant-success headline, say by
>>>>> selling a Ferrari (a Ford will NOT do ...) for this "new money."  Then wait.
>>>>> It's a Crowd Psychology 101 play, people, and I just want to say ..
>>>>> there are some things in this ol' world that are truly ancient, and finding
>>>>> new and creative ways to rip off your fellow-man by leveraging his own
>>>>> gullibility is one of them.  I don't want my Chattanooga virtual friends to
>>>>> be among those many that will eventually be hurt.
>>>>> #undef soapbox .. Thank you.
>>>>> – Mike Robinson
>>>>> (615) 268-3829
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