At this point, the main concern I have related to these schemes is that
they mustn't be allowed to pull the whole field down with them when they go
down the plughole.
It is impossible to have a serious discussion with a group of people who
are convinced that they are exceedingly clever and are part of a small
select group that has found a way to make a fortune by virtue of their
being so very very very very clever.
It was the same with the 'High Income Yield' scams (or whatever they were
called). It isn't an accident that Bitcoin started its rise six months
before Liberty Reserve was raided.
The whole Bitcoin system is a lab experiment that escaped. It takes the
'credit' for every success while disowning every failure and problem
identified as being a result of the immaturity of the system.
The biggest conceit is that they have eliminated fraud. Which they have
done by defining all fraud to be the fault of the user and therefore not a
problem of the system.
Another conceit is that their system is sound unless someone can prove that
it isn't. That is the wrong standard. Banks have compliance departments
that are based on the assumption that nothing is legitimate unless it can
pass an audit. Bitfinex have been promising an audit of Tether for years
now, it has never happened and anyone looking at how the BitCoin price
miraculously recovers after a dip knows it never will.
I don't believe BitCoin is worth $3,500. It is only worth 3,500 tethers and
nobody really knows how many of those can be redeemed at par before the
founders do a Quadriga. They may be running an honest operation but they
don't feel the need to demonstrate this. If someone tells me that I can
become exceedingly rich if I just let them hold my money for me for a
little while, I start with the assumption they are going to cheat me.
And of course, absolutely none of these issues have anything to do with the
cryptography. Which is important to keep pointing out because when these
Ponzi prats all start dropping off window ledges, mainstream media is going
to be asking why we never warned them. And of course most of us did and we
were ignored.
All in all BitCoin is just a more sophisticated Nigerian prince scheme.
Only instead of making the money moving the gold out of Nigeria or removing
diepack off dollar bills, the marks are supposed to double their money in a
month 'investing' in BitCoins and instead of the scammers making their
money by asking for advance fees, they persuade the 'investors' to let them
hold their stake for them.
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