
Bitcoin is the greatest scam in history - larrykubin
https://www.recode.net/2018/4/24/17275202/bitcoin-scam-cryptocurrency-mining-pump-dump-fraud-ico-value
======
darkengine
> This is a contributed post by Bill Harris, former CEO of Intuit and founding
> CEO of PayPal and Personal Capital.

I was not in the least bit surprised that what followed this disclaimer was by
and large the same tired anti-Bitcoin arguments we've all been reading since
2010. Not to mention the title is a gross exaggeration and undoubtedly fishing
for angry clicks.

The worst part is there's a nugget of truth hidden amongst this FUD: the
danger of ICOs and other varieties of altcoin scams. There's really no value
being created when yet another coin is created that's just an existing coin
with a new PoW algorithm stapled on, yet the creator stands to make tens of
thousands off of his or her 2% premine, because of people speculating that
this might be the Next Big Coin.

For this reason, I think the cryptocurrency market is definitely in a
speculative bubble. But so what? So is Silicon Valley. Is a Wi-Fi enabled
plant waterer really worth $30 million in VC funding? Probably not, but that
doesn't mean the Dropboxes and the AirBnBs of the market aren't adding value.
The abundance of worthless altcoins doesn't mean the cryptocurrency market as
a whole is worthless, but it does mean you should be careful what you invest
in.

~~~
sudouser
I’d think the founder of PayPal knows a thing or two about moneys...

~~~
garyfirestorm
They said that about banks in 2008

~~~
sudouser
random guy on internet or PayPal founder, which one can I trust more? hmm...

~~~
whataretensors
Trust yourself and think for yourself.

------
mantenpanther
"This is a contributed post by Bill Harris, former CEO of Intuit and founding
CEO of PayPal and Personal Capital.".

"Cryptocurrency is best-suited for one use: Criminal activity"

"... rest of article..."

When something is 100% in one (from the authors view negative) direction and
no technical, economic, social future potential gets mentioned something seems
not right. I should not even post this, don't feed the troll.

~~~
dragontamer
I'm not sure if "Criminal Activity" is the most descriptive name. But "gray
market" activity such as pornography seems to be a big market for cryptocoins.

IIRC, PornHub is experimenting with a cryptocoin (not BTC, but something else)
because they don't like being subject to Paypal's whims. They believe they're
in the legal clear, but banks don't want to be associated with that kind of
business. And thus, there's a growing need of some kind of financial
instrument for this politically unsavory, but legal, product.

But yes, the primary benefit of Cryptocoin seems to be about avoiding the
standard regulations and standard financial institutions. And yes, a big chunk
of that (ie: SilkRoad) is about illegal-activities. In short: "Criminal
Activity" is pushing the hyperbole too far, but the core concept seems to be a
hack around the US's conventional financial system and protections.

~~~
mantenpanther
I think you're right that this is one (early/first) use case, as it was during
the beginnings of the internet. Also, one could argue "gray markets" is
complementary to "free speech" or "censorship resistance" \- which is indeed
one of the core ideas of cryptocurrencies.

------
nostrademons
Sometimes I feel like both Bitcoin naysayers and Bitcoin aficionados are
missing the big story with Bitcoin:

Bitcoin represents the breakdown in trust. Trust in institutions, trust in
government, trust in the financial system, trust in currency, and trust in
fellow humans.

One of the great goals of the Internet was to shed a light on all the forms of
corruption and abuse that people in power were perpetuating. Back in our
naivete of the late 90s and early 00s, we thought that meant that people would
then _fix_ those problems. Instead, many of the problems have been largely
unfixable. People in power tend to hold on to power pretty tightly, and once
thwarted a half dozen times or so, people tend to declare the whole system
rotten to the core and unredeemable. (All except the winners, who are often
the most blind to the threat to the system itself.)

Couple that with many of the Internet giants adopting business models
involving psychological manipulation and a wholesale attack on the idea of a
shared reality itself, and instead of people taking targeted action to fix the
problems of corruption and abuse of power, they choose to opt out of the
system itself. Bitcoin & other cryptocurrencies are the ultimate in "exit"
strategies - if you feel like you will never get a fair cut of wealth in the
current fiat economy, well, start a whole new economy where you hold all the
tokens. Bitcoin proponents correctly point out that if Bitcoin is a scam, so
is _money_ itself, but then miss the part where money is a _useful_ scam, one
which has allowed people to trade peacefully for millenia.

It's unlikely that the result will be a new crypto-utopia. Already we see the
same problems with corruption and abuse of power showing up in most coin
ecosystems, but _worse_ than with mainstream institutions, which at least have
developed checks & balances to catch the worst abuses. Instead, we're likely
to see extreme fragmentation and conflict, more like a dystopian sci-fi novel
than a utopia.

~~~
foepys
> Trust in institutions, trust in government, trust in the financial system,
> trust in currency, and trust in fellow humans.

If I had to guess, I'd say that the number of people who really believe that
is pretty close to the number of conspiracy theorists.

~~~
nostrademons
So...tens of millions in the U.S. alone, now.

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berberous
This article is correct on a lot of points, but is overall an uncharitable
rehash of every tired argument against Bitcoin.

For example, while I acknowledge that Bitcoin could easily end up failing and
producing nothing of lasting value, and that regular investors should be
extremely cautious, that does not make it either a "scam" or a "pump-and-dump
scheme".

~~~
jerf
'that does not make it either a "scam" or a "pump-and-dump scheme".'

I mean, at the very least, at this point one must be gracious and grant to
BitCoin its success in being pump-and-dump _schemes_ , plural.

Now, excuse me, I'm off to found an autonomous corporation to compete in the
burgeoning field of PnDSaaS, a truly 21st century sort of organization.

------
kneel
Hey guys let's just all agree to use govt controlled money through govt
approved mediums.

Just accept inflation and quantitative easing as the way things are, any
alternative is just a scam.

The Federal Reserve can self regulate, the people there all have good
intentions and are very concerned that all your hard work isn't diluted by
inflation.

~~~
ldiracdelta
Fractional reserve banking with the US government, aka US tax payers, as
lender of last resort is awesome!

------
jamoes
These are the same tired arguments that have been brought many times before in
the previous few years. What's the point of an article like this that
contributes nothing to the discourse?

> It’s the job of the SEC and other regulators to protect ordinary investors
> from misleading and fraudulent schemes. It’s time we gave them the
> legislative authority to do their job.

Ah, I see, it looks like he's trying to drum up support for regulations that
would help the banking-industrial complex that he's a part of.

------
tabs_masterrace
This is so opinionated.

What's so hard to understand about Bitcoin as an alternative to fiat
currencies?

Yes, its real, its a store of value, and you can use it for payment if the
seller is willing to accept Bitcoin.

And yes giving your private keys to some offshore exchange or invest all your
money into some dubious altcoin is probably a bad idea.

Doesn't change the fact that Bitcoin's promise is very simple and clear and no
part of this is a scam.

------
sunstone
Well there's always Nassem Taleb's view of bitcoin which some might find
worthwhile, particularly because he's a known skeptic of things generally. [1]

[1]
[https://medium.com/opacity/bitcoin-1537e616a074](https://medium.com/opacity/bitcoin-1537e616a074)

------
llcoolv
[https://cointelegraph.com/news/in-attempt-to-regain-
relevanc...](https://cointelegraph.com/news/in-attempt-to-regain-relevance-
ousted-paypal-ceo-says-crypto-traders-are-drinking-the-kool-aid)

This is a good read. Basically this guy spent around 20 working days as
"PayPal founding CEO" before he got figured out :D :D :D :D

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Matticus_Rex
Pet peeve:

"A bitcoin has no intrinsic value."

Okay, sure. Along with everything else. Things can be useful, and they can
have moral value, but the whole concept of value relies on someone doing a
valuation. Nothing has value in and of itself without someone valuing it.
Bitcoin obviously has value (whether that value is founded on usefulness or
not), because we see people valuing it... and contrary to the author's
statements, it's not all Greater-Fool speculation, etc., even if you don't
agree with the reasons they're valuing it.

------
grosjona
Yeah and the 2008 bailout of finance firms was not a scam... Then the Fed
creating money out of thin air and using it to buy up toxic assets from these
very same finance firms (aka 'quantitative easing') is not a scam either...

Also I find it highly suspicious that they don't teach this in schools. Money
is one of the most important things to mankind and yet schools don't teach is
anything about where it comes from... When people finish school, they know a
lot about sport, art, philosophy and even religion but they know almost
nothing about money (except how to count it).

------
a_d
"A purely peer-to-peer version of electronic cash would allow online payments
to be sent directly from one party to another without going through a
financial institution."

\- Abstract from
[https://bitcoin.org/bitcoin.pdf](https://bitcoin.org/bitcoin.pdf)

The first line of the paper says: Commerce on the Internet has come to rely
almost exclusively on financial institutions serving as trusted third parties
to process electronic payments.

Aside from the technical solution proposed in the paper, the points related to
"trusted third parties" and "financial institutions" are key. This is a
product designed to circumvent institutions. It would most probably not be
received well by the institutions. There is too much philosophy, religion,
politics, and drama around Bitcoin - and is a great vehicle for all human
folly to be on display - greed, fear, prestige, cultism and so on and so
forth. Of course, No one really knows how this experimental product will play
out but it is intellectually engaging and _largely_ serves the function it was
designed for.

It is fascinating to read critiques of this product (esp unsubstantive ones).
There is no CEO, Customer Service, Executives, Managers etc that are really
listening - unlike say, criticizing a company like Uber or Comcast. Therefore,
most of the feedback just goes...nowhere and is just echoed amongst "people"
(Echo chamber?). The inventor's mystique and politics further add to the cult-
like qualities of this product - probably cognitive dissonance - because we
have never seen a product launched like this ever before. As an author of
these type of posts, one must really focus and ask what do they want to
achieve. If they are warning the public about avoiding speculation (which is
good motivation) then they need to make much better arguments.

This article is lazy. I would even generalize and say that this constant
"thought leadership" around Bitcoin is one of the most tiring things about
Bitcoin - with people doing it for themselves and not really making good deep
arguments for furthering everyone's understanding.

It is tiring because all the points have been made - there is no new original
thought (which would be great to discuss, actually). Bitcoin is an experiment.
It is a pretty decent product, with some downsides (like inefficiency) for
being "like money". Like a mycelium network [1] or Facebook, it spreads
largely on its own. In some respects, Bitcoin is an amazing product.

Maybe we let the experiment play out. We will see what happens. What is
playing out is truly fascinating :)

It would be great to see some new points being made so one can have an
interesting discussion.

[1] [http://www.bbc.com/earth/story/20141114-the-biggest-
organism...](http://www.bbc.com/earth/story/20141114-the-biggest-organism-in-
the-world)

------
eecks
This is an embarrassing article for Bill Harris.

~~~
grosjona
Agreed, there is no real intrinsic value behind fiat money; old people who
have a lot of fiat money essentially get paid to sit around all day doing
nothing; they're not actually offering any real service to society so why
should we value their currency?

At least cryptocurrency people are contributing though open source work. You'd
be surprised how many general purpose open source projects are sponsored by
crypto companies.

~~~
skookum
Wait, what? The second old people are no longer working their savings should
immediately be devalued?

There is some rich irony in calling out the lazy old people sitting on fiat
when easily 99.9% of "cryptocurrency people" are sitting around HODLing while
they wait for their COINZ to MOON. If contribution is your value argument, at
least make a modicum of effort to list some of the great open source work
contributed by the cryptocurrency people. It seems that most of the "work" is
either minimum effort ICO garbage meant to enrich the principals or is
blockchain-for-the-sake-of-blockchain to get a marketing boost off the hype.

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jiveturkey
isn’t much of what he says, true for cash as well? i’d wager there’s orders of
magnitude more criminal activity involving cash vs “bitcoin”.

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constantlm
Bill Harris is on the wrong side of history.

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jiveturkey
well said.

dumb question: why would anyone “invest” in an ICO?

~~~
nyolfen
spreading bets and hoping one takes off

~~~
foepys
Diversification in the cryptocurrency space is a myth. As soon as Bitcoin goes
down, everything else follows shortly after. E.g. 2 months ago:
[https://i.imgur.com/f1Vaybt.png](https://i.imgur.com/f1Vaybt.png)

~~~
nyolfen
i assure you it is extremely possible to make a bunch of money betting on
altcoins

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stmfreak
This post could just have easily been describing the U.S. Dollar.

