Hacker News new | comments | ask | show | jobs | submit login
[dupe] ‘Bitcoin is a scam’ says Bill Harris, former CEO of PayPal and Intuit (marketwatch.com)
42 points by senthil_rajasek 9 months ago | hide | past | web | favorite | 43 comments




I love it. It's just like all these MLM (Pyramid schemes) that have been reborn. I guess every generation has to relearn the lessons of the prior generations the hard way.

Comparing a nation's fiat to bitcoin is hilarious.

Here's what the USD is backed by. The nation's assets. And more importantly the nation's power to enforce their will upon you legally (via courts, police, military, etc.).


Actually the USD is backed by trading volumes. The courts, police, and military have little leverage over forex markets.

The Federal Reserve has been a fair steward of the dollar, with only a 96% devaluation since 1913. The curious can check the official numbers here:

https://data.bls.gov/cgi-bin/cpicalc.pl


the military actually has quite a huge amount of influence over forex markets why do you think we invest in it? https://www.quora.com/Why-is-oil-priced-and-traded-in-U-S-do...


No, actually a currency is not backed by a nations assets.

It is backed by the obligation to pay your taxes in that currency. I.e. every citizen with tax obligation (i.e. basically everybody) needs to collect Dollars to pay his tax bill. So everybody is willing to accept payments in that currency or in a currency which can be reasonably easy converted to Dollars.

As a topper sales tax creates a tax obligation on virtually all transactions within the society, so the need to own Dollars is directly bound to economic activity.


> It is backed by the obligation to pay your taxes in that currency.

If it's a reserve currency, as the U.S. is, it is also backed by the demand of other states to hold U.S. dollars to stabilize their non-reserve currency.

Indeed, some argue that a reserve currency is not subject to ordinary balance of payments criteria. This is sometimes called exorbitant privilege.[1]

All to say, the U.S. currency is not just backed by assets of the nation, but by demand that other states have for local-currency stability.

Somewhat aside, some argue that this creates a perverted incentive to destabilize the world because unstable states and regions have a higher demand for a reserve currency.

[1] https://en.wikipedia.org/wiki/Exorbitant_privilege


Not sure if being backed by coercive force is a positive or negative :).

For a reference point, gold is another sovereign asset and it has held up pretty well over the years.


I'm still assuming that gold has intrinsic technical value, only not directly to everyone, obviously. In the same vain, I guess the blockchain must have some inherent value, it's data after all, the gold of this century, and data concerning sha hashes at that. But from a glance I couldn't figure out how to use that as rainbow table or anything else.


The vast majority of the value of gold (more than 70%) is purely for jewelry. There is no shortage of gold for its technical uses, and if gold were no longer desirable for aesthetic purposes, there would be an enormous glut. By contrast platinum’s price is more dependent on its industrial use as a catalyst.


Isn't it moreso backed by our collective belief in it? Taking a leaf (or ten) from Sapiens here


It's not really a "belief", it's backed by the real things you can do with it. For example, if your currency is accepted by any real estate agent, your currency has real value far beyond belief, since property has real value in our society. This is what cryptocurrency lacks, and why it's value is overstated.


Houses have already been brought with bitcoin, even pizza's.


>For example, if your currency is accepted by any real estate agent


Most people don’t study history (or don’t learn its lessons) and as the saying goes, are doomed to repeat it. I think it’s worth remember ping that plenty, whatever they say publicly, are just trying to get rich and don’t really care how. $30million from exploiting the next fool spends just like any other money, as long as you’re not the last fool.



So I guess you didn't study the history of fiat...

...As written by two Blockchain sites. Ya got me.


You're shooting at the source, not the content.


“Consider the source.” Not to mention that the “conent” opening with “printing money is wealth theft” isn’t worth the time it took to read, never mind responding to it.


I just wanted to show you a quick glance over the history of fiat money, and what happened after 2008 to the dollar.

> Most people don’t study history (or don’t learn its lessons) and as the saying goes, are doomed to repeat it.

Have a nice day.


Great comment! Can I send you 0.001 Euro for this? Oh no wait, I can't.

Do you accept the Nano cryptocurrency?

Welcome to the new world, were fiat will be an old dinosaur living in a digital world (and yes, I said world, not nation)


You seem to be taking this personally. It's quite funny.


John Oliver has a well done bit on cryptocurrency markets as pyramid schemes: https://youtu.be/g6iDZspbRMg


Okay lets just say bitcoin is a scam. What do we do about it? What can we do about it?

Do we shut down the open source project? Do we make the algorithms illegal and have a repeat of the fight of whether or not mathematics and programming is free speech?

Without saying anything to support or not support bitcoin, the cat's out of the bag. There will now always be bitcoin as long as there are anonymous miners willing to keep the network running and it will always have value even if it's not optimized perfectly. Even if that value can only be found on the black market.

What I'm saying is bitcoin and cryptocurrencies are here to stay because the knowledge of how to make them and run them is becoming saturated and anyone can just fork the code. So even if it doesn't play by the rules we've come to know, we better get used to it...


> Do we shut down the open source project? Do we make the algorithms illegal and have a repeat of the fight of whether or not mathematics and programming is free speech?

Actually, it's quite simple. The SEC and IRS could go after the exchanges. If BTC can't be converted to US Dollars BTC is worthless on its face.

BTC only has value if it can be exchanged to another currency.


Okay lets do that. How do they enforce it? Many of the biggest exchanges are not in the US. There are some exchanges that are decentralized themselves and can't be taken down easily. Many countries are embracing cryptocurrencies like Germany, South Korea, Japan, and will offer safe havens for exchanges.

Of course cryptocurrency can always go underground and hid their traffic. Technically you could even run a cryptocurrency network through email. Technology has and will always move faster than governments.

On another front, it might be hard to galvanize support to ban cryptocurrency when many of the movers and shakers have embraced it. IBM is the largest tech provider to the financial sector and is working on more than 400 blockchain projects and runs its own cross border payment system that may already process 60% of all cross-border payments in the South Pacific using the Lumen crypto. Word is also going around the JPMorgan might start up bitcoin futures trading soon.

It seems like to me that the old world and gatekeepers have already decided that this is the way the world is moving.


> Okay lets do that. How do they enforce it? There are some exchanges that are decentralized themselves and can't be taken down easily.

So your argument is "You can make it illegal all you want, but we'll just move it underground and it will never die."

Arguments like that do little to win over regulators. The last time I checked in the US, cryptocurrency fell within the jurisdiction of the CFTC, IRS, SEC, and FinCEN agencies. Three of those agencies have already made policies regarding cryptocurrencies without needing an act of congress.

> On another front, it might be hard to galvanize support to ban cryptocurrency when many of the movers and shakers have embraced it.

Again, this argument is not compelling enough. Popular things once done by people or companies have been made illegal time and time again. Any argument that allows companies to profit off illegal activities (money laundering comes to mind) in a legal way without regulation, is DOA.


Hi, maybe you noticed already, but the world is bigger than US alone.


So your snark aside, China and India have already banned BTC [1] [2]. That's over a third of the world [3] right there.

[1] http://www.scmp.com/news/china/economy/article/2132119/beiji...

[2] https://www.forbes.com/sites/kenrapoza/2018/04/05/good-luck-...

[3] https://en.wikipedia.org/wiki/World_population#/media/File:W...


Sorry for the snark, it was a rough morning (which is no excuse).

The BTC ban in China needs to be nuanced: 'While private parties can hold and trade bitcoins in China, regulation prohibits financial firms like banks from doing the same.' see https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country...

India also doesn't seem to have a law in place to really ban it.

Wikipedia has a nice map that shows only a few small states really banned bitcoin: https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country...

I support the current stance of the US government on cryptocurrencies, because I think it's a sane way to approach this new technology, although there is a lot of speculation going on. I assume EU is going to have the same point of view more or less.


I'm quoting this from one of the articles I linked above in the gp:

"With the announcement that it plans to block all websites related to cryptocurrency trading and initial coin offerings – including foreign platforms – Beijing has left no one in any doubt of its position on the highly volatile commodity."

The Economic Times of India talks about banking regulations surrounding bitcoin [1]:

"RBI, while announcing its first bi-monthly monetary policy for the FY 2018-19, has announced that any entity regulated by them such as banks, wallets etc. shall not deal with or provide services to any individual or business entities for buying or selling of cryptocurrency such as bitcoins."

If you're going to invest in BTC, you're most likely going to do it through your bank account. Banning banks from working with crytocurrency exchanges is a big step in that direction because it severely impacts your ability to participate in those exchanges.

And that gets me back to the original point. A country just needs to attack the exchanges. BTC is only worth something if you can exchange it for something else.

[1] https://economictimes.indiatimes.com/wealth/personal-finance...


> BTC is only worth something if you can exchange it for something else.

This is not what you are claiming. You are claiming that BTC is only worth something if it can be exchanged for a local currency through financial institutions.

If I can earn cryptocurrencies with my Twitch stream donations, and I can buy my drugs online, why wouldn't it have any value? That's what a currency is all about, isn't it? There is no (central) bank or financial institution involved, which is exactly what we are aiming at.

> If you're going to invest in BTC, you're most likely going to do it through your bank account.

The main idea of BTC is not as an investment. It's like saying companies are all about stocks and not about the value they produce.


> This is not what you are claiming. You are claiming that BTC is only worth something if it can be exchanged for a local currency through financial institutions.

Nope. Look at the top of thread. I made it clear there.

> If I can earn cryptocurrencies with my Twitch stream donations, and I can buy my drugs online, why wouldn't it have any value?

When a casino changes out its chips, the old ones lose their value after a certain date. The casino will not exchange them for cash anymore, making the face value worthless.

BTC is very much like a casino chip. It only has value because someone is willing to exchange it for currency. If the exchange goes away, the face value goes away.


Exchanges came into existence because Bitcoin had value, not the other way around.


Exchanges came into existence so Bitcoin could have value. Otherwise it's not worth anything more than an expired poker chip.


Cryptocurrency is best-suited for one use: Criminal activity

This is not a new idea. And it ignores the fact that most criminals still use cash for transactions anyway.


Illegal cash still has to be laundered before it can be safely used. The more of it, the harder it is.


Of course most criminals use cash, since most people use cash. What's your point?


Point is the pot calling the kettle black.


Here is the actual article that Bill Harris wrote vs the linkspam:

https://www.recode.net/2018/4/24/17275202/bitcoin-scam-crypt...


PayPal and their underling Venmo have frozen my assets a couple times now in the past couple of months. PayPal is a scam. Venmo is a scam, says I, former user of those.


Is bitcoin a scam? Or is the notion of decentralized money a scam?

Sad if we must bow to the various central banks that will rise, fall, and inflate their currencies to nothing until the heat death of the universe.


You have a narrow view of economics if you think inflation is a problem. Inflation is great for our economy, since debt holders can use less purchasing power to pay off their fixed-rate debts.


I don't think inflation is (necessarily) a problem. I do think that some people benefit immensely from being "close to the source" of money creation; and especially when times get tough, those with access to this fountain benefit at the peril of the masses who are using the currency.

There are cryptos with inflation built in, probably in whatever most ideal form you or anyone thinks is correct.

Or, I might say: You have a narrow view of bitcoin if you think stopping inflation is the problem that it's solving.




Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact

Search: