Is Bitcoin a Scam?


Bitcoin the PERFECT SCAM

Bitcoin is as a SCAM by design as I have voiced many times over several months in that even when a large percentage of people have their holdings stolen the price is stable enough to continue to entice new entrants into exchanging hard earned fiat currency for bitcoins via the ramblings of the clueless mainstream press, investors who will also at some point lose the value of all of their holdings.

As I have pointed out several times before bitcoin ultimately has a destiny with extinction because in order to continue verifying bitcoin transactions then bitcoin miners need exponentially greater processing power to achieve this, where today a bitcoin miner would need to invest in order of $20,000 to have any hopes of breaking even, costs that looks set to double every year where a decade from now break even mining operations would require an investment of more than $40 million which would imply far fewer mining pools that would in effect OWN the bitcoin craptocurrency and through the block verification process even be able to re-write who owns what.

Ultimately this means that the bitcoin mining will become the sole enterprise for criminal enterprises as no legitimate enterprise would be able to cover the costs of verifying bitcoin transactions (blocks) and thus earning new bitcoins, thus leaving bitcoin mining wholly to criminal gangs operating bot nets in control of millions of infected computers that would each mine fragments that would periodically be harvested by the bot nets.

So bitcoin holders don’t be surprised when you come to open your wallet.dat file that you find it is empty!

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9 responses to “Is Bitcoin a Scam?

  1. I’m not qualified to comment on bitcoin mechanics. I, for one, have been waiting for all the bugs of bitcoin (or any software money) to be ironed out. Bitcoin needs to stand the test of time before wide acceptance.

    “Who knows what will be the future incarnations of money? Computer bytes?” – Milton Friedman, Money Mischief.

    • Money has been ten tonne carved boulders (YAP Islands), shells, women, pigs and land (Papua New Guinea).

      However, for the past 10,000 years gold and silver seem to be universally accepted. Perhaps once people get fed up with fiat currency, we can have electronic currency tied to precious metals redemption. First, LEGAL TENDER laws need to be extinguished.

      I think Milton Friedman was a good advocate for freedom but his ideas on money are full of hooey. Why let the Fed (failure of central planning) control money and credit (Fed Funds Rate)?

      Boo on Milton Friedman.

      • I think Friedman was on the same page with you regarding FED.

        “Any system which gives so much power and so much discretion to a few men, that mistakes ‑‑ excusable or not ‑‑ can have such far reaching effects, is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic ‑‑ this is the key political argument against an independent central bank… To paraphrase Clemenceau: money is much too serious a matter to be left to the Central Bankers.” – Milton Friedman, Capitalism and Freedom.

        He also writes supportingly of metallic or bi-metallic standard, though he thinks it’s a virtual impossibility to go back to it given the political situation.

        • Agreed that political elites today would not want to go back to a gold standard. The market–the public–will force the change after a failure or collapse of the system.

          If you download the free pdf of America’s Great Depression by Rothbard, you will read Rothbard’s criticism of Friedman’s stance of the Fed’s monetary policy. The Fed helped inflate the credit boom which CAUSED the depression.

          Thanks for the clarification.

      • Ok, I think his wording is somewhat confusing. He still might be broadly suggesting central planning (of money supply, funds rate etc) cannot be a good system.

      • Here, he says “I’d abolish the FED”.

  2. The premise of that report is that the cost of mining bitcoins on a scale that is profitable will be increasing as the difficulty of mining will increase over time and that will result in only criminal gangs being able to partake and thusly ending up controlling the network. Which would be bad and thusly crashing the value of bitcoin.

    A quick fix to this problem is to let users pay a fee to have their transaction verified and let miners compete for verifying transactions with fees, which was indicated to be the current default plan when mining for mining profits becomes unsustainable, last time I checked the bitcoin foundation website.

    Given the lack of research the author of that report has performed, id take his analysis with a mine of salt. Probably should be sceptic to other reports by the same author.

  3. Believe Bitcoin on its own is worthless for various reasons including what you have discussed. Also the fact that it is not used as a currency is a little ridiculous for something that claims to be a currency (no one sells products for bitcoin without immediately exchanging the bitcoin into USD).

    However perhaps worth thinking about how technology will affect ROIC for existing payment processors in the next decade. What are your thoughts on that

    • I have no expertise in payment processors, but technology changes may breach any advantage they have–and if a payment processing company has an edge it would be through network effects.

      A currency must be universally accepted, but a currency is NOT the same thing as money. The US dollar is both a currency and money (for now) but it originally was defined as a weight in silver then to gold. I don’t see a return to a 100% gold standard, but the fiat currency system seems to be headed towards a disaster/blow up. Sounds like a bold prediction but in the US two of its currencies were debased to $0.00 and went extinct. Ditto for the dollar. The question is when does the landslide start?

      Anyone could have avoided bitcoin by knowing what is money (put Bitcoin in the search box for or

      At best, bitcoin is token money like chits at an amusement park–very limited.

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