Spanish Prosecution Office Investigating Alleged Bitcoin ...

Bernie Madoff ponzi scheme was for $65 Billion. I think Bitcoin and alt's are just starting, BUT definitely not a ponzi scheme. Bernie didn't have a blockchain to verify everything!

Bernie Madoff ponzi scheme was for $65 Billion. I think Bitcoin and alt's are just starting, BUT definitely not a ponzi scheme. Bernie didn't have a blockchain to verify everything! submitted by BitcoinAllBot to BitcoinAll [link] [comments]

Explain why Bitcoin is not a Ponzi scheme Like I am Bernie Madoff and you are Ron Paul

Alternatively; Explain why Bitcoin IS a Ponzi Scheme Like I am Ron Paul and you are Bernie Madoff
submitted by phaberman to explainlikeIAmA [link] [comments]

A Theory: The Crypto Ecosystem Hasn't Fully Collapsed Because It Has Found A Truly Ingenious Way To Monetize Human Stupidity and Greed

It's true that most traditional ponzi/pyramid schemes (Madoff etc...) collapse because they're obligated to provide unsustainable returns to their investors. However, pyramid schemes that force their sucker "investors" to eat their own losses typically don't collapse, at least not for a long time . Crypto is a perfect example of this dynamic at play, since exchanges are able to establish a consistent revenue stream of hard currency by manipulating the market against butters stupid enough to gamble on margin. The whole thing basically has the business model of a casino/pyramid scheme combined into one. Bitcoin doesn't run on electricity or software. It runs on sheer human stupidity, gullibility, and greed. MLMs like Harbalife largely function on the same principle (forcing the vast majority of suckers to eat their losses instead of guaranteeing an ultimately unsustainable return), which is why many MLMs have lasted for literally decades.
Something that u/thehoesmaketheman said on here that really stuck with me is that governments make pyramid schemes illegal because people love to "invest" in pyramid schemes otherwise. This can actually do profound damage to society if taken far enough, and while any given pyramid scheme might eventually collapse (depending on its structure), there will always be new schemes and new suckers. Crypto is a perfect space for generating both, as it is both digital and laughably unregulated. So I predict the Bitcoin/Crypto/Tether Rube Goldberg machine of stupidity and greed will keep going until governments finally wise up and make it illegal (if they ever do) because its just another scam at the end of the day. Unfortunately for our society and the planet, a lot of people in power seem to be fooled by trendy tech buzzwords like blockchain.
submitted by SpecialTurnip3 to Buttcoin [link] [comments]

04-24 20:34 - 'Why do you continue to ignore Tether?' (self.Bitcoin) by /u/acesdeuces155 removed from /r/Bitcoin within 0-8min

'''
I don't understand how you can ignore the problems with tether.
Tether and Bitfinex are currently involved in a lawsuit. Tether has openly admitted its not backed by anything.
Most of you understand what Quantative Easing (QE) is. The Fed counterfeits money that has been created out of thin air and uses it to buy stocks and thus artificially inflates the value of the stock market. (And yes I understand it's more complicated than that, but for simplicitie's sake that's basically how it works).
You also understand why QE is a gigantic problem.
Yet tether is being used for the same purpose... There is no difference between QE and tether.
Tether = QE
QE = Tether
It is more or less the exact same thing... Fake dollars are created out of thin air and used to artificially inflate the underlying asset.
QE bad. Tether good.
Why doesn't it bother you?
But that's not all.
On any given day up to 67% of total market market volume is tether trading. On an average trading day tether trades 6x-10x its market cap.
Today, for example, total market cap for tether is $6.4 billion while it's trading volume is almost $47 billion. That's 7.34x. No other crypto is anywhere close.
Do you know what wash trading is? Do you understand the purpose of wash trading? Hint: it's for more than just fake volume.
The total market volume of the Cryptocurrency market today is $129 billion. Tether is $47 billion. 36% of the total market volume.
Tether, let me remind you, has openly admitted its not backed by anything. 36% of the Cryptocurrency trading is based on absolutely nothing but imagination...
Yet somehow you'll still find a way to ignore that fact and pretend the price is organic?
Nothing about the Cryptocurrency market is real.
I'm sure someone will try to explain the "real" trading volume...while simultaneously ignoring the reason exchanges are wash trading for fake volume in the first place.
Do you know why there are now 5,392 cryptocurrencies? They're (whoever they is) wash trading these obscure cryptocurrencies and artificially inflating the price with tether wash trading. Once the price has been artificially inflated (pumped) they can then sell into Bitcoin (and anything else).. and no one notices.
Very few (if any) people are actually trading the 3,841st ranked cryptocurrency. It's fake.
Basically obscure cryptocurrencies are a backdoor method for artificially inflating the price of Bitcoin.
Harry Markopolis tried for 9 years to tell us about Bernie Madoff's ponzi scheme. He repeatedly wrote to the SEC giving them lists of "red flags". He was ignored. The title of his book is "No One Would Listen".
It's the exact same scenario. I can point out a dozen more red flags but you won't listen. You'll ignore it as as FUD.
Have you never noticed that literally everything negative said about Bitcoin is FUD?!
You'll downvote this right away and find a way to convince yourself I have no idea what I'm talking about.
Despite the numerous warnings by Markopolis, Madoff's scam only fell apart when banks froze credit and stopped lending to each other.
It will be the exact same thing with Bitcoin.
'''
Why do you continue to ignore Tether?
Go1dfish undelete link
unreddit undelete link
Author: acesdeuces155
submitted by removalbot to removalbot [link] [comments]

Ponzi schemes hit highest level in a decade, hinting next 'investor massacre' may be near

This is the best tl;dr I could make, original reduced by 77%. (I'm a bot)
Investor money ensnared in alleged Ponzi schemes has hit its highest level in a decade, leading to concern that a booming stock market and de-regulatory agenda are pushing more fraudsters to bilk unsuspecting investors.
A Ponzi scheme is a type of fraud whereby crooks steal money from investors and mask the theft by funneling returns to clients from funds contributed by newer investors.
Bernard Madoff ran the largest Ponzi scheme in history, a $65 billion scam encompassing thousands of investors that was uncovered in 2008.
In 2008, for example, authorities found 40 Ponzi schemes with a combined $23 billion of investor funds - roughly seven times the amount of funds from last year, according to Ponzitracker, data of which is compiled by Jordan Maglich, an attorney at Quarles & Brady.
The challenge with Ponzi schemes is that investors are unlikely to know if they're victims until the stock market crashes, as happened during the financial crisis when clients tried redeeming their money only to realize it wasn't there, Stoltmann said.
A recent Bitcoin Ponzi scheme, for example, promised investors up to 7% interest per week.
Summary Source | FAQ | Feedback | Top keywords: Investor#1 year#2 Ponzi#3 scheme#4 stock#5
Post found in /news, /FraudstersOfMarketing and /NBCauto.
NOTICE: This thread is for discussing the submission topic. Please do not discuss the concept of the autotldr bot here.
submitted by autotldr to autotldr [link] [comments]

moe, csgo diamonds and twitch's no reaction

Most of you probably know what happened between moe and cs go diamonds so i will not explain it. If you dont just google "moe cs go diamonds".
I wonder why there is no reaction of twitch, i mean he used their plattform to advertise this website. Maybe they need some evidence but in my opinion there are more then plenty in the posts both sides made. For example Moe said on twitter he had 26000 diamonds he tried to withdraw, diamonds he won with the knowledge of the future coin flips. He wanted to withdraw money won from users of the site, so there are definitely people who were cheated on. You can find his twitter post here: https://twitter.com/m0E_tv/status/742117097765933056
On another twitter post he admitted that he got "the rolls before they happen."Cs go diamonds did this multiple times even with him saying not to. But as you can see on the skype conversation he had with an admin of cs go diamonds he asked for the future lists. So it was a lie. You can find the twitter post here: https://twitter.com/m0E_tv/status/742435274370613249 And the skype conversation here: https://pbs.twimg.com/media/Ck6fFDCWgAAmkfG.png
Cs go diamonds said it is "provably fair" because you cant manipulate the future rolls. But if you know the future rolls there is no need in manipulating them. Imagine lotto where you know the future numbers, there is no point in changing them.
So im wondering why there are no consequences from twitch's side. These gaming sites are intransparent and most likely all fraud but it is still allowed to advertise them. I realy hope there is a chance to get a response from an official side or from some streamers.
It is also most likely most of the skins deposit on these websites are gone forever. For Example shroud had around 81000 $ on cs go wild but i dont think there are that many skins to withdraw (Im not entirely sure because im not registered on the site) Further he is only 1 of many with such balance. So my assumption is most of the gambling sites sold the skins to pay for sponsorships and their overall costs. As you can see on the skype conversation between moe and cs go diamonds they paid him 7435.9$ and 9537.04$ for his sponsorship. These are 10% of their total earnings. Following this they made 74359$ and 95370$ dollar in the last months and are also able to pay moe a buy out with 75000 (In Bitcoins, the IRS would probably be interested in also) As i see it it is probably a pyramid scheme.
At last maybe for the streamers. You have this huge opportunity to be part of something new and of big changes. You shouldnt forget that you are responsible for you behaviour to your audience. Imagine a superbowl add about investing in the pyramid scheme of Bernard Madoff.
Ps: If you watch the video of moe and his girlfriend winning 54000$ it is kinda obivous he was using these knowledge. He was down on 3900$ and put all on green. His girlfriend randomly comes in to scream with him as soon as he won. It could be a coincidence but the chances for this to happen are very low. I mean how often did you see his girlfriend on stream? This is not an evidence but kinda odd.
Since there are so many post with questions i thought it is necessery to update and try to answer some of the most frequent one. I had no idea what i let lose but im glad so many of you feel the same as i do.
Yes, it was my first post. Im normaly an introvert guy who doesnt post anything on the internet. But what bothered me is that someone could pull something like this off, get paid 95000$ and doesnt have to fear any consequences. Further i tried to refer to most sources i mentioned, so it doesnt matter if it is my first post or not, you can read everything for yourself and make your conclusions.
Im not sure if valve is responsible. Assume the skins are like your car. You can do whatever you like because its your property, so you can also use it to bet..
I think twitch is responsible. TV Broadcasters are also responsible for the ads they broadcast but im actually not sure.
I dont hate moe. He is kinda entertaining, you can compare him to gordon ramsay which a lot people like and watch. They are acting closely the same. But that doenst mean anything. Imagine Kate Middleton, who is for a lot of people probably one of the nicest people on earth, tricks people into a pyramid scheme. Shouldnt she be punished like everyone else should?
Also a lot of people compared the deposit and withdraw system to a bank. A bank is transparent (at least in parts) and regulated from public authoritys. The money you deposit is used for all sorts of credits for consumer and companies. They pay their bills with the interests they make with them. I know a normal bank does a lot more to earn money but thats one of their main incomes.
Many think he didnt benefit from knowing the future numbers. Thats partly right. He doesnt win directly by playing against others. But imagine a roulette game with 1 guy at the table who is partnered with the owner . He can win for the owner against people who doenst know anything about the partnership. On a regular roulette table without the green it is a 50/50 chance to win, it is mathematicaly a fair game because the expectancy value is 0. The players pay for the others, it is in balance, but not if there is one guy who know the future rolls. I think thats the reason why cs go diamonds didnt allow him to withdraw skins.
Sassanian mentioned it is a Ponzi Scheme and i think he is right, thank you.
I know a lot of streamer advertise different betting sites and i didnt mention anyone else beside moe. The point is he made a part public of what is happening behind those sites public and also used informations from the admin. There are no evidences of other streamers doing the same. (Cant believe he made a fraud public he was involved in, he doesnt seem stupid, but that definitely is. Maybe he was greedy or had one of his rage moments)
On cs go diamdonds are also no informations of how they make that much money. I mean on regular roulete there is green on which the bank wins but thats not the case at cs go diamonds as far as i know. I didnt find a deposit fee or anything like it ( Just Imagine there is such a fee at 1%. As i mentioned they made 95370$ (i dont know if moe got 10% or 20% of that so the number may differ) in one month. I refer to the twitter post of cs diamonds which you can find here: https://twitter.com/CSGO_Diamonds/status/742706689913262080 With such a fee there would be 9.537.000 $ of skins deposit in one month. Thats hard to believe) If someone knows more feel free to post any information you can refer to.
You can find an article about it here: http://www.hltv.org/blog/12005-csgodiamonds-fraud-the-reason-why-sites-like-this-should-be-blocked http://www.esportsbettingreport.com/csgo-diamonds-skin-betting-m0e/ http://americanbettingsite.com/2016/csgo-diamonds-scamming/
Statements of both parties are on their twitter accounts: https://twitter.com/csgo_diamonds post from June 14 https://twitter.com/m0E_tv posts from June 13
Thank you guys for the support.
I started a new thread about betting sites and their earnings in general. If you are interested you can find it here: https://redd.it/4ow3fe
submitted by bird1100 to GlobalOffensive [link] [comments]

a strong case for zero-fee transactions: it currently costs a massive $119 to confirm a btc transaction quickly

even though i hold a few btc's, i have to say right now it has become a huge failure bordering on disaster. especially when we have most trading pairs in btc, and btc has become completely unusable by any reasonable standards.
just look at the current cost / txn.
https://blockchain.info/charts/cost-per-transaction
$119: this is the average cost that should be sent to the miners if you want your txn confirmed within the next few blocks. ofcourse, you can choose to add a lower fee, risking a pending transaction for hours if not days.
this model is completely unsustainable, and has very much evolved into a typical ponzi scheme - the coin itself brings in new users based on hype (almost every major business news channel is hyping BTC right now), the new users are promised the "moon" , so to speak - never seen before returns, just hodl etc. and when they want to invest in any other alt or move their bitcoin, they have to pay such crazy fees that goes directly to the promoters -i.e. the miners. it may not be your typical madoff ponzi, but right now it checks all the boxes to be classified as a ponzi
for one, i am bullish on XRB, people when they find out that it is possible to make fee less transactions, will want to move away from existing systems like bitcoin and its clones for this reason - any other mineable coin can theoretically become as expensive as bitcoin if it gains popularity. XRB offers a completely different way out of this mess.
what xrb really needs is more trading pairs such as ltc and eth and also bigger exchanges.
submitted by amorazputin to RaiBlocks [link] [comments]

Important Questions to Answer Before Investing Heavily

So I have a friend who is weighing the idea of heavily investing in Dash. He is a lawyer and extremely bright. He has posed these questions to me and I have already given him a decent rebuttal but I dont think I was persuasive enough. Any helpful info and comments would be greatly appreciated. I also think these questions represent some of the greatest concerns that keep money on the sidelines. Answering them effectively could mean huge investments from not only my friend but countless others. Thanks.
1) The insta-mine issue: I think this is still problematic, because if it was a programming error, why didn't Evan re-release the software the next day and wipe out the first release? And why did he release it a few hours after telling everyone it wouldn't be until the next day? It creates a lot of issues regarding his credibility and re: who controls the coin's future, both in terms of outstanding float and philosophy. So, even if those coins were distributed, couldn't they have been to sock-puppet accounts he created? And/or to a select group of friends who create additional accounts? Perhaps it was intended to be a "pump & dump" coin but he decided to stick with it? Many possibilities, but the one Evan pushes ("total accident, whoops, not an issue, coins are dispersed now") to me seems the least likely. Obv., I am open to hearing more, as I'm new to the topic.
2) The master-nodes set up a potential Ponzi structure, a'la Madoff with his "super-investors" like Jeffrey Picower. The vast majority of investors bought into Madoff and got the same "percentage returns", with the only difference being that those who invested more obviously made more money as a percentage. But there was a group of uber-rich who got even bigger returns (often 2-5x the others), and that allowed Madoff to have a constant pile of equity to play with. In other words, "park your billion dollars here, I'll guarantee you an extra cut that these little guys aren't getting, and I'll be able to use the static capital to keep the scheme going." The master-nodes are only getting a few coins per node/week, so it's not exactly comparable on a financial level, but they are more likely to be emotionally/financially invested-- so they'll reap the biggest rewards initially, but they will begin to sell en masse when the drops start, creating a mad dash (pardon the pun). Also, what % of the 25 million in trades daily is between master nodes who are driving the insane rise?
3) The lack of regulation/oversight makes it so easy to engineer a pump & dump without much fear of criminal consequences. So, I'm not saying the SEC does a good job on insideHFT trading (they don't), but the fear does keep some fraud at bay. But the 25 million dash trades are basically in a dark market, which, although recorded by the blockchain, is way out of the view of classic regulators. Therefore, a small group of major players (those involved in the insta-mine, or a cartel of master-nodes) can drive the price up by trading to each other because they control such a large percentage of the oustanding float. That, in turn, attracts fleeing BTC investors to Dash (or just speculators). But it has all the signs of a bubble.
4) Yes, Dash is gaining acceptance on an exchange, but it's still a commodity pretending to be a currency. No currency, let alone almost no stocks ever have a rise from $7 to $85 in less than a year. That kind of rate of return is indicative of massive speculation detached from any actual value. Now, yes, if Dash does become the new Bitcoin, or the basis for cryptocurrency transactions or Tor, or Dash Evolution is a nice piece of software, this could justify a major price increase. But a ten-fold return in a year is still beyond any of those, in my opinion.
5) What is the sign that Dash is going to be successful with Evolution? Has anyone seen the code? A beta? Anything beyond a few screenshots? It's so tough to make good software, let alone secure financial software. If Bitcoin, with a market cap nearly 30x Dash, still has a problem with shitty software, why will this micro-coin solve the issue and have it be secure? That would require trusting Evan, and based on the release of the coin, there are reasons to wonder. Since there's still the "can grandma use it" problem with Bitcoin, I am skeptical that a crack team at Dash has suddenly solved it.
6) Since it started as a "dark/anon coin", won't this be one of the first ones outlawed or heavily cracked-down on by the SEC/DOJ when they finally wake up? Even if everything goes well, and I'm wrong in my suspicions, the feds could kill this thing pretty quickly, just like independent silver coins, for example. Or, alternatively, they just consider regulating it heavily, and that mere possibility spooks the master-nodes and speculators, and it tumbles quickly.
submitted by butcherofballyhoo to dashpay [link] [comments]

Cryptocurrency down to its final days

First I need you to understand there is no argument here. Cryptocurrency is a Ponzi scheme. Your refusal or inability to understand it unfortunately doesn't make it any less true. For me everything came together with the Bitcoin fork. The day before the fork, Poloniex updates its TOS to include the inability to be included in class action lawsuits. No reaon, no explanation, just, you can't sue us. And for some reason we just accepted that as reality and moved on. The next day the fork happens, but Poloniex refuses to release Bitcoin Cash for another 2 weeks. They give some technical bullshit story and people buy it. It blows my mind. If you own 1 BTC $2800, you now also had 1 BTC @ $2800 and 1 BCH @ $400. $400 in free money and no one ever bothers to question where it came from, except for apparently me. More than 4 billion was added to the total market cap, but no new money ever entered the system. Pennies from heaven. People just accepted their "free money". Coinbase, one of the few exchanges where you can convert back to fiat, won't release their BCH until January. They give another bullshit technical story, but the real reason is it's great business advice not to give away free money to their customers. Even if 10% of their customers immediately cashed out their "free money", we'd know they were insolvent. I think the Poloniex updated TOS and their decison to wait 2 weeks to release Bitcoin Cash were related. They were waiting for someone to ask where the free money came from. Seriously i'm the only one? If money is this easy to make, why don't we just fork every cryptocurrency? Well, we are. Bitcoin is due to fork AGAIN into Bitcoin Gold in late October. Ethereum will fork 10/8, next Sunday. Given what you now understand about the first Bitcoin fork, these forks make more sense now, don't they?
Early miners mined hundreds of thousands of Bitcoins for mere pennies. If someone wanted to cash out 100,000 bitcoins for $430,000,000 right now, could they? Oh hell no, you'd have to do it a little bit at a time. Let's say you're worth you're worth $300,000. If you wanted to could you cash out everything right this second? No, and this is the major point that almost literally everyone is missing. It's just not easy to convert back to fiat. Did you know Coinbase only allows $10k per day in withdrawals after a long verification process? Then they have further weekly and money withdrawal limits. Using only Coinbase, it would take you more than 30 days to withdrawal everything. How does a ponzi scheme work? You need new people consistently buying into the market and, here's the key, not selling. How do they keep people from selling? Well, you make people believe they're going to become wealthy. How many people do you know that aren't HODL ers. No one. "We're still in on the ground floor, everything to the mooooon! We're 20 year olds going to retire at 22! Bitcoin is headed to $1,000,000!" Everything, all the hype is to prevent people from selling AND keep people continuously buying in. Meanwhile, the early investors can take the new money entering the market and cash out. New investors giving their money to old investors, a classic ponzi scheme. Or maybe pyramid, not sure, but I know with 100% certainty its a scam. The cold hard reality is most people have already lost their money. They just don't know it yet.
I can't prove this, but I think Roger Ver is Satoshi Nakomoto. He's involved in almost literally everything Bitcoin. Bitstamp, Kraken, Bitpay, localbitcoins.com, bitcoin.com. Google "Bitcoin Jesus Is Creating His Own NAP Voluntarist Country". He's set up a libertarian paradise with 0% taxes, but more importantly for him, free from criminal prosecution. Also he's the one who pushed so hard for Bitcoin Cash. If he owns 1,000,000 Bitcoins, he gave himself a $400,000,000 pay day and if you noticed, the price almost immediately rose to $800 before coming back down. I still can't prove it, but I know the exchanges are scams. Everything is a scam.
Last week Goldmoney.com started accepting most cryptocurrencies as payment. Why? Well, I might have told them, I sooo wanted Peter Schiff to be the one to blow the whistle. Maybe he still will, but in the meantime if you don't want to lose everything you need to act now.
Harry Markopolos figures out the Bernie Madoff Ponzi scheme. I figured out the cryptocurrency ponzi scheme. It's a Greek thing. If you still don't get it, you better read it again. Cryptocurrency is finished.
submitted by nolimitnp to BitcoinMarkets [link] [comments]

Trading Cryptocurrency Markets

Hello! My name is Slava Mikhalkin, I am a Project Owner of Crowdsale platform at Platinum, the company that knows how to start any ICO or STO in 2019.
If you want to avoid headaches with launching process, we can help you with ICO and STO advertising and promotion. See the full list of our services: Platinum.fund
I am also happy to be a part of the UBAI, the first educational institution providing the most effective online education on blockchain! We can teach you how to do ICO/STO in 2019. Today I want to tell you how to sell and transfer cryptocurrencies.
Major Exchanges
In finance, an exchange is a forum or platform for trading commodities, derivatives, securities or other financial instruments. The principle concern of an exchange is to allow trading between parties to take place in a fair and legally compliant manner, as well as to ensure that pricing information for any instrument traded on the exchange is reliable and coherently delivered to exchange participants. In the cryptocurrency space exchanges are online platforms that allow users to trade cryptocurrencies or digital currencies for fiat money or other cryptocurrencies. They can be centralized exchanges such a Binance, or decentralized exchanges such as IDEX. Most cryptocurrency exchanges allow users to trade different crypto assets with BTC or ETH after having already exchanged fiat currency for one of those cryptocurrencies. Coinbase and Kraken are the main avenue for fiat money to enter into the cryptocurrency ecosystem.
Function and History
Crypto exchanges can be market-makers that take bid/ask spreads as a commission on the transaction for facilitating the trade, or more often charge a small percentage fee for operating the forum in which the trade was made. Most crypto exchanges operate outside of Western countries, enabling them to avoid stringent financial regulations and the potential for costly and lengthy legal proceedings. These entities will often maintain bank accounts in multiple jurisdictions, allowing the exchange to accept fiat currency and process transactions from customers all over the globe.
The concept of a digital asset exchange has been around since the late 2000s and the following initial attempts at running digital asset exchanges foreshadows the trouble involved in attempting to disrupt the operation of the fiat currency baking system. The trading of digital or electronic assets predate Bitcoin’s creation by several years, with the first electronic trading entities running afoul of the Australian Securities and Investments Commission (ASIC) in late 2004. Companies such as Goldex, SydneyGoldSales, and Ozzigold, shut down voluntarily after ASIC found that they were operating without an Australian Financial Services License. E-Gold, which exchanged fiat USD for grams of precious metals in digital form, was possibly the first digital currency exchange as we know it, allowing users to make instant transfers to the accounts of other E-Gold members. At its peak in 2006 E-Gold processed $2 billion worth of transactions and boasted a user base of over 5 million people.
Popular Exchanges
Here we will give a brief overview of the features and operational history of the more popular and higher volume exchanges because these are the platforms to which newer traders will be exposed. These exchanges are recommended to use because they are the industry standard and they inspire the most confidence.
Bitfinex
Owned and operated by iFinex Inc, the cryptocurrency trading platform Bitfinex was the largest Bitcoin exchange on the planet until late 2017. Headquartered in Hong Kong and based in the US Virgin Island, Bitfinex was one of the first exchanges to offer leveraged trading (“Margin trading allows a trader to open a position with leverage. For example — we opened a margin position with 2X leverage. Our base assets had increased by 10%. Our position yielded 20% because of the 2X leverage. Standard trades are traded with leverage of 1:1”) and also pioneered the use of the somewhat controversial, so-called “stable coin” Tether (USDT).
Binance
Binance is an international multi-language cryptocurrency exchange that rose from the mid-rank of cryptocurrency exchanges to become the market dominating behemoth we see today. At the height of the late 2017/early 2018 bull run, Binance was adding around 2 million new users per week! The exchange had to temporarily disallow new registrations because its servers simply could not keep up with that volume of business. After the temporary ban on new users was lifted the exchange added 240,000 new accounts within two hours.
Have you ever thought whats the role of the cypto exchanges? The answer is simple! There are several different types of exchanges that cater to different needs within the ecosystem, but their functions can be described by one or more of the following: To allow users to convert fiat currency into cryptocurrency. To trade BTC or ETH for alt coins. To facilitate the setting of prices for all crypto assets through an auction market mechanism. Simply put, you can either mine cryptocurrencies or purchase them, and seeing as the mining process requires the purchase of expensive mining equipment, Cryptocurrency exchanges can be loosely grouped into one of the 3 following exchange types, each with a slightly different role or combination of roles.
Have you ever thought about what are the types of Crypto exchanges?
  1. Traditional Cryptocurrency Exchange: These are the type that most closely mimic traditional stock exchanges where buyers and sellers trade at the current market price of whichever asset they want, with the exchange acting as the intermediary and charging a small fee for facilitating the trade. Kraken and GDAX are examples of this kind of cryptocurrency exchange. Fully peer-to-peer exchanges that operate without a middleman include EtherDelta, and IDEX, which are also examples of decentralized exchanges.
  2. Cryptocurrency Brokers: These are website or app based exchanges that act like a Travelex or other bureau-de-change. They allow customers to buy or sell crypto assets at a price set by the broker (usually market price plus a small premium). Coinbase is an example of this kind of exchange.
  3. Direct Trading Platform: These platforms offer direct peer-to-peer trading between buyers and sellers, but don’t use an exchange platform in doing so. These types of exchanges do not use a set market rate; rather, sellers set their own rates. This is a highly risky form of trading, from which new users should shy away.
To understand how an exchange functions we need only look as far as a traditional stock exchange. Most all the features of a cryptocurrency exchange are analogous to features of trading on a traditional stock exchange. In the simplest terms, the exchanges fulfil their role as the main marketplace for crypto assets of all kinds by catering to buyers or sellers. These are some definitions for the basic functions and features to know: Market Orders: Orders that are executed instantly at the current market price. Limit Order: This is an order that will only be executed if and when the price has risen to or dropped to that price specified by the trader and is also within the specified period of time. Transaction fees: Exchanges will charge transactions fees, usually levied on both the buyer and the seller, but sometimes only the seller is charged a fee. Fees vary on different exchanges though the norm is usually below 0.75%. Transfer charges: The exchange is in effect acting as a sort of escrow agent, to ensure there is no foul play, so it might also charge a small fee when you want to withdraw cryptocurrency to your own wallet.
Regulatory Environment and Evolution
Cryptocurrency has come a long way since the closing down of the Silk Road darknet market. The idea of crypto currency being primarily for criminals, has largely been seen as totally inaccurate and outdated. In this section we focus on the developing regulations surrounding the cryptocurrency asset class by region, and we also look at what the future may hold.
The United States of America
A coherent uniform approach at Federal or State level has yet to be implemented in the United States. The Financial Crimes Enforcement Network published guidelines as early as 2013 suggesting that BTC and other cryptos may fall under the label of “money transmitters” and thus would be required to take part in the same Anti-money Laundering (AML) and Know your Client (KYC) procedures as other money service businesses. At the state level, Texas applies its existing finance laws. And New York has instituted an entirely new licensing system.
The European Union
The EU’s approach to cryptocurrency has generally been far more accommodating overall than the United States, partly due to the adaptable nature of pre-existing laws governing electronic money that predated the creation of Bitcoin. As with the USA, the EU’s main fear is money laundering and criminality. The European Central Bank (ECB) categorized BTC as a “convertible decentralized currency” and advised all central banks in the EU to refrain from trading any cryptocurrencies until the proper regulatory framework was put in place. A task force was then set up by the European Parliament in order to prevent and investigate any potential money laundering that was making use of the new technology.
Likely future regulations for cryptocurrency traders within the European Union and North America will probably consist of the following proposals: The initiation of full KYC procedures so that users cannot remain fully anonymous, in order to prevent tax evasion and curtail money laundering. Caps on payments that can be made in cryptocurrency, similar to caps on traditional cash transactions. A set of rules governing tax obligations regarding cryptocurrencies Regulation by the ECB of any companies that offer exchanges between cryptocurrencies and fiat currencies It is less likely for other countries to follow the Chinese approach and completely ban certain aspects of cryptocurrency trading. It is widely considered more progressive and wiser to allow the technology to grow within a balanced accommodative regulatory framework that takes all interests and factors into consideration. It is probable that the most severe form of regulation will be the formation of new governmental bodies specifically to form laws and exercise regulatory control over the cryptocurrency space. But perhaps that is easier said than done. It may, in certain cases, be incredibly difficult to implement particular regulations due to the anonymous and decentralized nature of crypto.
Behavior of Cryptocurrency Investors by Demographic
Due to the fact that cryptocurrency has its roots firmly planted in the cryptography community, the vast majority of early adopters are representative of that group. In this section we cover the basic structure of the cryptocurrency market cycle and the makeup of the community at large, as well as the reasons behind different trading decisions.
The Cryptocurrency Market Cycle
Bitcoin leads the bull rally. FOMO (Fear of missing out) occurs, the price surge is a constant topic of mainstream news, business programs cover the story, and social media is abuzz with cryptocurrency chatter. Bitcoin reaches new All Timehigh (ATH) Market euphoria is fueled with even more hype and the cycle is in full force. There is a constant stream of news articles and commentary on the meteoric, seemingly unstoppable rise of Bitcoin. Bitcoin’s price “stabilizes”, In the 2017 bull run this was at or around $14,000. A number of solid, large market cap altcoins rise along with Bitcoin; ETH & LTC leading the altcoins at this time. FOMO comes into play, as the new ATH in market cap is reached by pumping of a huge number of alt coins.
Top altcoins “somewhat” stabilize, after reaching new all-time highs. The frenzy continues with crypto success stories, notable figures and famous people in the news. A majority of lesser known cryptocurrencies follow along on the upward momentum. Newcomers are drawn deeper into crypto and sign up for exchanges other than the main entry points like Coinbase and Kraken. In 2017 this saw Binance inundated with new registrations. Some of the cheapest coins are subject to massive pumping, such as Tron TRX which saw a rise in market cap from $150 million at the start of December 2017 to a peak of $16 billion! At this stage, even dead coins or known scams will get pumped. The price of the majority of cryptocurrencies stabilize, and some begin to retract. When the hype is subsiding after a huge crypto bull run, it is a massive sell signal. Traditional investors will begin to give interviews about how people need to be careful putting money into such a highly volatile asset class. Massive violent correction begins and the market starts to collapse. BTC begins to fall consistently on a daily basis, wiping out the insane gains of many medium to small cap cryptos with it. Panic selling sweeps through the market. Depression sets in, both in the markets, and in the minds of individual investors who failed to take profits, or heed the signs of imminent collapse. The price stagnation can last for months, or even years.
The Influence of Age upon Trading
Did you know? Cryptocurrencies have been called “stocks for millennials” According to a survey conducted by the Global Blockchain Business Council, only 5% of the American public own any bitcoin, but of those that do, an overwhelming majority of 71% are men, 58% of them are between the ages of 18 and 35, and over half of them are minorities. The same survey gauged public attitude toward the high risk/high return nature of cryptocurrency, in comparison to more secure guaranteed small percentage gains offered by government bonds or stocks, and found that 30% would rather invest $1,000 in crypto. Over 42% of millennials were aware of cryptocurrencies as opposed to only 15% of those ages 65 and over. In George M. Korniotis and Alok Kumar’s study into the effects of aging on portfolio management and the quality of decisions made by older investors, they found “that older and experienced investors are more likely to follow “rules of thumb” that reflect greater investment knowledge. However, older investors are less effective in applying their investment knowledge and exhibit worse investment skill, especially if they are less educated and earn lower income.”
Geographic Influence upon Trading
One of the main drivers of the apparent seasonal ebb and flow of cryptocurrency prices is the tax situation in the various territories that have the highest concentrations of cryptocurrency holders. Every year we see an overall market pull back beginning in mid to late January, with a recovery beginning usually after April. This is because “Tax Season” is roughly the same across Europe and the United States, with the deadline for Income tax returns being April 15th in the United States, and the tax year officially ending the UK on the 6th of April. All capital gains must be declared before the window closes or an American trader will face the powerful and long arm of the IRS with the consequent legal proceedings and possible jail time. Capital gains taxes around the world vary from jurisdiction to jurisdiction but there are often incentives for cryptocurrency holders to refrain from trading for over a year to qualify their profits as long term gain when they finally sell. In the US and Australia, for example, capital gains are reduced if you bought cryptocurrency for investment purposes and held it for over a year. In Germany if crypto assets are held for over a year then the gains derived from their sale are not taxed. Advantages like this apply to individual tax returns, on a case by case basis, and it is up to the investor to keep up to date with the tax codes of the territory in which they reside.
2013 Bull run vs 2017 Bull run price Analysis
In late 2016 cryptocurrency traders were faced with the task of distinguishing between the beginnings of a genuine bull run and what might colorfully be called a “dead cat bounce” (in traditional market terminology). Stagnation had gripped the market since the pull-back of early 2014. The meteoric rise of Bitcoin’s price in 2013 peaked with a price of $1,100 in November 2013, after a year of fantastic news on the adoption front with both Microsoft and PayPal offering BTC payment options. It is easy to look at a line going up on a chart and speak after the fact, but at the time, it is exceeding difficult to say whether the cat is actually climbing up the wall, or just bouncing off the ground. Here, we will discuss the factors that gave savvy investors clues as to why the 2017 bull run was going to outstrip the 2013 rally. Hopefully this will help give insight into how to differentiate between the signs of a small price increase and the start of a full scale bull run. Most importantly, Volume was far higher in 2017. As we can see in the graphic below, the 2017 volume far exceeds the volume of BTC trading during the 2013 price increase. The stranglehold MtGox held on trading made a huge bull run very difficult and unlikely.
Fraud & Immoral Activity in the Private Market
Ponzi Schemes Cryptocurrency Ponzi schemes will be covered in greater detail in Lesson 7, but we need to get a quick overview of the main features of Ponzi schemes and how to spot them at this point in our discussion. Here are some key indicators of a Ponzi scheme, both in cryptocurrencies and traditional investments: A guaranteed promise of high returns with little risk. Consistentflow of returns regardless of market conditions. Investments that have not been registered with the Securities and Exchange Commission (SEC). Investment strategies that are a secret, or described as too complex. Clients not allowed to view official paperwork for their investment. Clients have difficulties trying to get their money back. The initial members of the scheme, most likely unbeknownst to the later investors, are paid their “dividends” or “profits” with new investor cash. The most famous modern-day example of a Ponzi scheme in the traditional world, is Bernie Madoff’s $100 billion fraudulent enterprise, officially titled Bernard L. Madoff Investment Securities LLC. And in the crypto world, BitConnect is the most infamous case of an entirely fraudulent project which boasted a market cap of $2 billion at its peak.
What are the Exchange Hacks?
The history of cryptocurrency is littered with examples of hacked exchanges, some of them so severe that the operation had to be wound up forever. As we have already discussed, incredibly tech savvy and intelligent computer hackers led by Alexander Vinnik stole 850000 BTC from the MtGox exchange over a period from 2012–2014 resulting in the collapse of the exchange and a near-crippling hammer blow to the emerging asset class that is still being felt to this day. The BitGrail exchange suffered a similar style of attack in late 2017 and early 2018, in which Nano (XRB) was stolen that was at one point was worth almost $195 million. Even Bitfinex, one of the most famous and prestigious exchanges, has suffered a hack in 2016 where $72 million worth of BTC was stolen directly from customer accounts.
Hardware Wallet Scam Case Study
In late 2017, an unfortunate character on Reddit, going by the name of “moody rocket” relayed his story of an intricate scam in which his newly acquired hardware wallet was compromised, and his $34,000 life savings were stolen. He bought a second hand Nano ledger into which the scammers own recover seed had already been inserted. He began using the ledger without knowing that the default seed being used was not a randomly assigned seed. After a few weeks the scammer struck, and withdrew all the poor HODLer’s XRP, Dash and Litecoin into their own wallet (likely through a few intermediary wallets to lessen the very slim chances of being identified).
Hardware Wallet Scam Case Study Social Media Fraud
Many gullible and hapless twitter users have fallen victim to the recent phenomenon of scammers using a combination of convincing fake celebrity twitter profiles and numerous amounts of bots to swindle them of ETH or BTC. The scammers would set up a profile with a near identical handle to a famous figure in the tech sphere, such as Vitalik Buterin or Elon Musk. And then in the tweet, immediately following a genuine message, follow up with a variation of “Bonus give away for the next 100 lucky people, send me 0.1 ETH and I will send you 1 ETH back”, followed by the scammers ether wallet address. The next 20 or so responses will be so-called sockpuppet bots, thanking the fake account for their generosity. Thus, the pot is baited and the scammers can expect to receive potentially hundreds of donations of 0.1 Ether into their wallet. Many twitter users with a large follower base such as Vitalik Buterin have taken to adding “Not giving away ETH” to their username to save careless users from being scammed.
Market Manipulation
It also must be recognized that market manipulation is taking place in cryptocurrency. For those with the financial means i.e. whales, there are many ways in which to control the market in a totally immoral and underhanded way for your own profit. It is especially easy to manipulate cryptos that have a very low trading volume. The manipulator places large buy orders or sell walls to discourage price action in one way or the other. Insider trading is also a significant problem in cryptocurrency, as we saw with the example of blatant insider trading when Bitcoin Cash was listed on Coinbase.
Examples of ICO Fraudulent Company Behavior
In the past 2 years an astronomical amount of money has been lost in fraudulent Initial Coin Offerings. The utmost care and attention must be employed before you invest. We will cover this area in greater detail with a whole lesson devoted to the topic. However, at this point, it is useful to look at the main instances of ICO fraud. Among recent instances of fraudulent ICOs resulting in exit scams, 2 of the most infamous are the Benebit and PlexCoin ICOs which raised $4 million for the former and $15 million for the latter. Perhaps the most brazen and damaging ICO scam of all time was the Vietnamese Pincoin ICO operation, where $660million was raised from 32,000 investors before the scammer disappeared with the funds. In case of smaller ICO “exit scamming” there is usually zero chance of the scammers being found. Investors must just take the hit. We will cover these as well as others in Lesson 7 “Scam Projects”.
Signposts of Fraudulent Actors
The following factors are considered red flags when investigating a certain project or ICO, and all of them should be considered when deciding whether or not you want to invest. Whitepaper is a buzzword Salad: If the whitepaper is nothing more than a collection of buzzwords with little clarity of purpose and not much discussion of the tech involved, it is overwhelmingly likely you are reading a scam whitepaper.
Signposts of Fraudulent Actors §2
No Code Repository: With the vast majority of cryptocurrency projects employing open source code, your due diligence investigation should start at GitHub or Sourceforge. If the project has no entries, or nothing but cloned code, you should avoid it at all costs. Anonymous Team: If the team members are hard to find, or if you see they are exaggerating or lying about their experience, you should steer clear. And do not forget, in addition to taking proper precautions when investing in ICOs, you must always make sure that you are visiting authentic web pages, especially for web wallets. If, for example, you are on a spoof MyEtherWallet web page you could divulge your private key without realizing it and have your entire portfolio of Ether and ERC-20 tokens cleaned out.
Methods to Avoid falling Victim
Avoiding scammers and the traps they set for you is all about asking yourself the right questions, starting with: Is there a need for a Blockchain solution for the particular problem that a particular ICO is attempting to solve? The existing solution may be less costly, less time consuming, and more effective than the proposals of a team attempting to fill up their soft cap in an ICO. The following quote from Mihai Ivascu, the CEO of Modex, should be kept in mind every time you are grading an ICO’s chances of success: “I’m pretty sure that 95% of ICOswill not last, and many will go bankrupt. ….. not everything needs to be decentralized and put on an open source ledger.”
Methods to Avoid falling Victim §2 Do I Trust These People with My Money, or Not?
If you continue to feel uneasy about investing in the project, more due diligence is needed. The developers must be qualified and competent enough to complete the objectives that they have set out in the whitepaper.
Is this too good to be true?
All victims of the well-known social media scams using fake profiles of Vitalik Buterin, or Bitconnect investors for that matter, should have asked themselves this simple question, and their investment would have been saved. In the case of Bitconnect, huge guaranteed gains proportional to the amount of people you can get to sign up was a blatant pyramid scheme, obviously too good to be true. The same goes for Fake Vitalik’s offer of 1 ether in exchange for 0.1 ETH.
Selling Cryptocurrencies, Several reasons for selling with the appropriate actions to take:
If you are selling to buy into an ICO, or maybe believe Ether is a safer currency to hold for a certain period of time, it is likely you will want to make use of the Ether pair and receive Ether in return. Obviously if the ICO is on the NEO or WANchain blockchain for example, you will use the appropriate pair. -Trading to buy into another promising project that is listing on the exchange on which you are selling (or you think the exchange will experience a large amount of volume and become a larger exchange), you may want to trade your cryptocurrency for that exchange token. -If you believe that BTC stands a good chance of experiencing a bull run then using the BTC trading pair is the suitable choice. -If you believe that the market is about to experience a correction but you do not want to take your gains out of the market yet, selling for Tether or “tethering up” is the best play. This allows you to keep your locked-in profits on the exchange, unaffected by the price movements in the cryptocurrency markets,so that you can buy back in at the most profitable moment. -If you wish to “cash out” i.e. sell your cryptocurrency for fiat currency and have those funds in your bank account, the best pair to use is ETH or BTC because you will likely have to transfer to an exchange like Kraken or Coinbase to convert them into fiat. If the exchange offers Litecoin or Bitcoin Cash pairs it could be a good idea to use these for their fast transaction time and low fees.
Selling Cryptocurrencies
Knowing when and how to sell, as well as strategies to inflate the value of your trade before sale, are important skills as a trader of any product or financial instrument. If you are satisfied that the sale itself of the particular amount of a token or coin you are trading away is the right one, then you must decide at what price you are going to sell. Exchanges exercise their own discretion as to which trading “pairs” they will offer, but the most common ones are BTC, ETH, BNB for Binance, BIX for Bibox etc., and sometimes Tether (USDT) or NEO. As a trader, you decide which particular cryptocurrency to exchange depending on your reason for making that specific trade at that time.
Methods of Sale
Market sell/Limit sell on exchange: A limit sell is an order placed on an exchange to sell as soon as (also specifically only if and when) the price you specified has been hit within the time limit you select. A market order executes the sale immediately at the best possible price offered by the market at that exact time. OTC (or Over the Counter) selling refers to sale of securities or cryptocurrencies in any method without using an exchange to intermediate the trade and set the price. The most common way of conducting sales in this manner is through LocalBitcoins.com. This method of cryptocurrency selling is far riskier than using an exchange, for obvious reasons.
The influence and value of your Trade
There are a number of strategies you can use to appreciate the value of your trade and thus increase the Bitcoin or Ether value of your portfolio. It is important to disassociate yourself from the dollar value of your portfolio early on in your cryptocurrency trading career simply because the crypto market is so volatile you will end up pulling your hair out in frustration following the real dollar money value of your holdings. Once your funds have been converted into BTC and ETH they are completely in the crypto sphere. (Some crypto investors find it more appropriate to monitor the value of their portfolio in satoshi or gwei.) Certainly not limited to, but especially good for beginners, the most reliable way to increase your trading profits, and thus the overall value and health of your portfolio, is to buy into promising projects, hold them for 6 months to a year, and then reevaluate. This is called Long term holding and is the tactic that served Bitcoin HODLers quite well, from 2013 to the present day. Obviously, if something comes to light about the project that indicates a lengthy set back is likely, it is often better to cut your losses and sell. You are better off starting over and researching other projects. Also, you should set initial Price Points at which you first take out your original investment, and then later, at which you take out all your profits and exit the project. That should be after you believe the potential for growth has been exhausted for that particular project.
Another method of increasing the value of your trades is ICO flipping. This is the exact opposite of long term holding. This is a technique in which you aim for fast profits taking advantage of initial enthusiasm in the market that may double or triple the value of ICO projects when they first come to market. This method requires some experience using smaller exchanges like IDEX, on which project tokens can be bought and sold before listing on mainstream exchanges. “Tethering up” means to exchange tokens or coins for the USDT stable coin, the value of which is tethered to the US Dollar. If you learn, or know how to use, technical analysis, it is possible to predict when a market retreatment is likely by looking at the price movements of BTC. If you decide a market pull back is likely, you can tether up and maintain the dollar value of your portfolio in tether while other tokens and coins decrease in value. The you wait for an opportune moment to reenter the market.
Market Behavior in Different Time Periods
The main descriptors used for overall market sentiment are “Bull Market” and “Bear Market”. The former describes a market where people are buying on optimism. The latter describes a market where people are selling on pessimism. Fun (or maybe not) fact: The California grizzly bear was brought to extinction by the love of bear baiting as a sport in the mid 1800s. Bears were highly sought after for their intrinsic fighting qualities, and were forced into fighting bulls as Sunday morning entertainment for Californians. What has this got to do with trading and financial markets? The downward swipe of the bear’s paws gives a “Bear market” its name and the upward thrust of a Bull’s horns give the “Bull Market” its name. Most unfortunately for traders, the bear won over 80% of the bouts. During a Bull market, optimism can sometimes grow to be seemingly boundless, volume is rising, and prices are ascending. It can be a good idea to sell or rebalance your portfolio at such a time, especially if you have a particularly large position in one holding or another. This is especially applicable if you need to sell a large amount of a relatively low-volume holding, because you can then do so without dragging the price down by the large size of your own sell order.
Learn more on common behavioral patterns observed so far in the cryptocurrency space for different coins and ICO tokens.
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Ghost of Mt. Gox Strikes Again

Okay, I’m not totally sold on this old recycled narrative about the Mt. Gox trustee selling Bitcoin to compensate their defrauded customers...as the primary cause of Bitcoin’s recent fall. But, I do believe the ghost of Mt. Gox does have an impact, just not as much as Coindesk alludes to. Obviously, Mt. Gox is the posterchild of cryptocurrency fraud and the original deceptive Bitcoin Exchange. Mt. Gox is the reason I had no interest in Bitcoin back in 2013-2014 (which in hindsight I regret). The most disturbing part about this Mt. Gox problem child is that it not only transparently exists today but it has manifest itself in other forms (Bitforex, Bitfinex, Tether - I don’t trust any of those foreign/Asian exchanges particularly after Mt. Gox). Of course, if you have a large stakehold, it’s almost smart to have a hard wallet instead of relying on some distant exchange but most people don’t do that. It’s an inevitability that Bitfinex will collapse as soon as Tether is exposed for the sham that it is. The house of cards will fall like the Bernie Madoff Ponzi scheme - these things don’t survive the test of time. But it’s bothersome that everyone is convinced that Mt. Gox is a lone wolf or isolated incident when the same people who ran Mt. Gox to the ground don’t go away...they pop their ugly heads among other exchanges. The whales use Mt. Gox selling to their advantage. Everyone should be cautioned that Mt. Gox will happen again 4-5 years from today where Bitfinex is selling millions of Bitcoin. History repeats itself...
https://www.coindesk.com/mt-gox-has-sold-170-million-in-btc-and-bch-since-march/
submitted by xelephonte to Bitcoin [link] [comments]

Bitconnect coin scam

Its price is flying. It can be traded on its own website/platform and in a few very minor exchanges. Check this review: medium.com/@recordshyip/bitconnect-review-peer-to-peer-bitcoin-community-for-earn-buy-sell-and-trade-e4c71739c6c9. This thing promises 40% MONTHLY returns, paid as interest, generated by a magic trading bot. No trader in the world, neither human nor bot, can generate those returns from trading. It is an obvious ponzi scheme scam. It even rewards for referrals in a classic pyramid scheme. Did no one hear about someone called Madoff? There even is a Robert De Niro movie about him. Ponzi schemes can run for decades until utterly failing one day. Wake up! You can all curse me after not investing in Bitconnect (it can continue going up for a long while, specially if its trading is manipulated, but even so if it isn't given the generalized crypto mania). But in three years time when it goes bust turn around, say thank you, and buy me a beer.
submitted by rhovegaton to Bitconnect [link] [comments]

PSA: Promoting a Ponzi Scheme is not OK

In the Bitcoin space I often came across people promoting Ponzi schemes and when being called out about it, they brushed it off saying: "Yeah, sure it's a Ponzi. Everybody knows it. But if you are early in and early out, you can still make fantastic profits." The BST [email protected] pass-throughs were a prime example of that. I've even seen websites promoting their project as pyramid scheme openly.
While the above is less and less common as a percentage of Bitcoin news, it still happens and most likely a lot behind closed doors, so here is a reminder that not only the initial scammer's are on the line but also those who promote the scam.
From this article on "Madoff’s Victims Are Close to Getting Their $19 Billion Back":
So far he’s recovered $13.3 billion—about 70 percent of approved claims—by suing those who profited from the scheme, knowingly or not. And Picard has billions more in his sights.
Please, if you have a friend who's trying to sell you the next Bitconnect or something, showing off his new found riches, point him to this.
submitted by giszmo to Bitcoin [link] [comments]

The wilkelvoss are trying to make bitcoin legit according to esquire magazine

Every idea needs a face, even if the faces are illusory simplifications. The country you get is the president you get. The Yankees you get is the shortstop you get. Apple needed Jobs. ISIS needs al-Baghdadi. The moon shot belongs to Bezos. There's nothing under the Facebook sun that doesn't come back to Zuckerberg.
But there is, as yet, no face behind the bitcoin curtain. It's the currency you've heard about but haven't been able to understand. Still to this day nobody knows who created it. For most people, it has something to do with programmable cash and algorithms and the deep space of mathematics, but it also has something to do with heroin and barbiturates and the sex trade and bankruptcies, too. It has no face because it doesn't seem tangible or real. We might align it with an anarchist's riot mask or a highly conceptualized question mark, but those images truncate its reality. Certain economists say it's as important as the birth of the Internet, that it's like discovering ice. Others are sure that it's doomed to melt. In the political sphere, it is the darling of the cypherpunks and libertarians. When they're not busy ignoring it, it scares the living shit out of the big banks and credit-card companies.
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It sparked to life in 2008—when all the financial world prepared for itself the articulate noose—and it knocked on the door like some inconvenient relative arriving at the dinner party in muddy shoes and a knit hat. Fierce ideological battles are currently being waged among the people who own and shepherd the currency. Some shout, Ponzi scheme. Some shout, Gold dust. Bitcoin alone is worth billions of dollars, but the computational structure behind it—its blockchain and its sidechains—could become the absolute underpinning of the world's financial structure for decades to come.
What bitcoin has needed for years is a face to legitimize it, sanitize it, make it palpable to all the naysayers. But it has no Larry Ellison, no Elon Musk, no noticeable visionaries either with or without the truth. There's a lot of ideology at stake. A lot of principle and dogma and creed. And an awful lot of cash, too.
At 6:00 on a Wednesday winter morning, three months after launching Gemini, their bitcoin exchange, Tyler and Cameron Winklevoss step out onto Broadway in New York, wearing the same make of sneakers, the same type of shorts, their baseball caps turned backward. They don't quite fall into the absolute caricature of twindom: They wear different-colored tops. Still, it's difficult to tell them apart, where Tyler ends and Cameron begins. Their faces are sculpted from another era, as if they had stepped from the ruin of one of Gatsby's parties. Their eyes are quick and seldom land on anything for long. Now thirty-four, there is something boyishly earnest about them as they jog down Prince Street, braiding in and out of each other, taking turns talking, as if they were working in shifts, drafting off each other.
Forget, for a moment, the four things the Winklevosses are most known for: suing Mark Zuckerberg, their portrayal in The Social Network, rowing in the Beijing Olympics, and their overwhelming public twinness. Because the Winklevoss brothers are betting just about everything—including their past—on a fifth thing: They want to shake the soul of money out.
At the deep end of their lives, they are athletes. Rowers. Full stop. And the thing about rowing—which might also be the thing about bitcoin—is that it's just about impossible to get your brain around its complexity. Everyone thinks you're going to a picnic. They have this notion you're out catching butterflies. They might ask you if you've got your little boater's hat ready. But it's not like that at all. You're fifteen years old. You rise in the dark. You drag your carcass along the railroad tracks before dawn. The boathouse keys are cold to the touch. You undo the ropes. You carry a shell down to the river. The carbon fiber rips at your hands. You place the boat in the water. You slip the oars in the locks. You wait for your coach. Nothing more than a thumb of light in the sky. It's still cold and the river stinks. That heron hasn't moved since yesterday. You hear Coach's voice before you see him. On you go, lads. You start at a dead sprint. The left rib's a little sore, but you don't say a thing. You are all power and no weight. The first push-to-pull in the water is a ripping surprise. From the legs first. Through the whole body. The arc. Atomic balance. A calm waiting for the burst. Your chest burns, your thighs scald, your brain blanks. It feels as if your rib cage might shatter. You are stillness exploding. You catch the water almost without breaking the surface. Coach says something about the pole vault. You like him. You really do. That brogue of his. Lads this, lads that. Fire. Stamina. Pain. After two dozen strokes, it already feels like you're hitting the wall. All that glycogen gone. Nobody knows. Nobody. They can't even pronounce it. Rowing. Ro-wing. Roh-ing. You push again, then pull. You feel as if you are breaking branch after branch off the bottom of your feet. You don't rock. You don't jolt. Keep it steady. Left, right, left, right. The heron stays still. This river. You see it every day. Nothing behind you. Everything in front. You cross the line. You know the exact tree. Your chest explodes. Your knees are trembling. This is the way the world will end, not with a whimper but a bang. You lean over the side of the boat. Up it comes, the breakfast you almost didn't have. A sign of respect to the river. You lay back. Ah, blue sky. Some cloud. Some gray. Do it again, lads. Yes, sir. You row so hard you puke it up once more. And here comes the heron, it's moving now, over the water, here it comes, look at that thing glide.
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The Winklevoss twins in the men's pair final during the 2008 Beijing Olympic Games. GETTY There's plenty of gin and beer and whiskey in the Harrison Room in downtown Manhattan, but the Winklevoss brothers sip Coca-Cola. The room, one of many in the newly renovated Pier A restaurant, is all mahogany and lamplight. It is, in essence, a floating bar, jutting four hundred feet out into the Hudson River. From the window you can see the Statue of Liberty. It feels entirely like their sort of room, a Jazz Age expectation hovering around their initial appearance—tall, imposing, the hair mannered, the collars of their shirts slightly tilted—but then they just slide into their seats, tentative, polite, even introverted.
They came here by subway early on a Friday evening, and they lean back in their seats, a little wary, their eyes busy—as if they want to look beyond the rehearsal of their words.
They had the curse of privilege, but, as they're keen to note, a curse that was earned. Their father worked to pay his way at a tiny college in backwoods Pennsylvania coal country. He escaped the small mining town and made it all the way to a professorship at Wharton. He founded his own company and eventually created the comfortable upper-middle-class family that came with it. They were raised in Greenwich, Connecticut, the most housebroken town on the planet. They might have looked like the others in their ZIP code, and dressed like them, spoke like them, but they didn't quite feel like them. Some nagging feeling—close to anger, close to fear—lodged itself beneath their shoulders, not quite a chip but an ache. They wanted Harvard but weren't quite sure what could get them there. "You have to be basically the best in the world at something if you're coming from Greenwich," says Tyler. "Otherwise it's like, great, you have a 1600 SAT, you and ten thousand others, so what?"
The rowing was a means to an end, but there was also something about the boat that they felt allowed another balance between them. They pulled their way through high school, Cameron on the port-side oar, Tyler on the starboard. They got to Harvard. The Square was theirs. They rowed their way to the national championships—twice. They went to Oxford. They competed in the Beijing Olympics. They sucked up the smog. They came in sixth place. The cameras loved them. Girls, too. They were so American, sandy-haired, blue-eyed, they could have been cast in a John Cougar Mellencamp song.
It might all have been so clean-cut and whitebread except for the fact that—at one of the turns in the river—they got involved in the most public brawl in the whole of the Internet's nascent history.
They don't talk about it much anymore, but they know that it still defines them, not so much in their own minds but in the minds of others. The story seems simple on one level, but nothing is ever simple, not even simplification. Theirs was the original idea for the first social network, Harvard Connection. They hired Mark Zuckerberg to build it. Instead he went off and created Facebook. They sued him. They settled for $65 million. It was a world of public spats and private anguish. Rumors and recriminations. A few years later, dusty old pre-Facebook text messages were leaked online by Silicon Alley Insider: "Yeah, I'm going to fuck them," wrote Zuckerberg to a friend. "Probably in the ear." The twins got their money, but then they believed they were duped again by an unfairly low evaluation of their stock. They began a second round of lawsuits for $180 million. There was even talk about the Supreme Court. It reeked of opportunism. But they wouldn't let it go. In interviews, they came across as insolent and splenetic, tossing their rattles out of the pram. It wasn't about the money, they said at the time, it was about fairness, reality, justice. Most people thought it was about some further agile fuckery, this time in Zuckerberg's ear.
There are many ways to tell the story, but perhaps the most penetrating version is that they weren't screwed so much by Zuckerberg as they were by their eventual portrayal in the film version of their lives. They appeared querulous and sulky, exactly the type of characters that America, peeling off the third-degree burns of the great recession, needed to hate. While the rest of the country worried about mounting debt and vanishing jobs, they were out there drinking champagne from, at the very least, Manolo stilettos. The truth would never get in the way of a good story. In Aaron Sorkin's world, and on just about every Web site, the blueblood trust-fund boys got what was coming to them. And the best thing now was for them to take their Facebook money and turn the corner, quickly, away, down toward whatever river would whisk them away.
Armie Hammer brilliantly portrayed them as the bluest of bloods in The Social Network. When the twins are questioned about those times now, they lean back a little in their seats, as if they've just lost a long race, a little perplexed that they came off as the victims of Hollywood's ability to throw an image, while the whole rip-roaring regatta still goes on behind them. "They put us in a box," says Cameron, "caricatured to a point where we didn't really exist." He glances around the bar, drums his finger against the glass. "That's fair enough. I understand that impulse." They smart a little when they hear Zuckerberg's name. "I don't think Mark liked being called an asshole," says Tyler, with a flick of bluster in his eyes, but then he catches himself. "You know, maybe Mark doesn't care. He's a bit of a statesman now, out there connecting the world. I have nothing against him. He's a smart guy."
These are men who've been taught, or have finally taught themselves, to tell their story rather than be told by it. But underneath the calm—just like underneath the boat—one can sense the churn.
They say the word—ath-letes—as if it were a country where pain is the passport. One of the things the brothers mention over and over again is that you can spontaneously crack a rib while rowing, just from the sheer exertion of the muscles hauling on the rib cage.
Along came bitcoin.
At its most elemental, bitcoin is a virtual currency. It's the sort of thing a five-year-old can understand—It's just e-cash, Mom—until he reaches eighteen and he begins to question the deep future of what money really means. It is a currency without government. It doesn't need a banker. It doesn't need a bank. It doesn't even need a brick to be built upon. Its supporters say that it bypasses the Man. It is less than a decade old and it has already come through its own Wild West, a story rooted in uncharted digital territory, up from the dust, an evening redness in the arithmetical West.
These are men who've been taught, or have finally taught themselves, to tell their story rather than be told by it. Bitcoin appeared in 2008—westward ho!—a little dot on the horizon of the Internet. It was the brainchild of a computer scientist named Satoshi Nakamoto. The first sting in the tale is that—to this very day—nobody knows who Nakamoto is, where he lives, or how much of his own invention he actually owns. He could be Californian, he could be Australian, he could even be a European conglomerate, but it doesn't really matter, since what he created was a cryptographic system that is borderless and supposedly unbreakable.
In the beginning the currency was ridiculed and scorned. It was money created from ones and zeros. You either bought it or you had to "mine" for it. If you were mining, your computer was your shovel. Any nerd could do it. You keyed your way in. By using your computer to help check and confirm the bitcoin transactions of others, you made coin. Everyone in this together. The computer heated up and mined, down down down, into the mathematical ground, lifting up numbers, making and breaking camp every hour or so until you had your saddlebags full of virtual coin. It all seemed a bit of a lark at first. No sheriff, no deputy, no central bank. The only saloon was a geeky chat room where a few dozen bitcoiners gathered to chew data.
Lest we forget, money was filthy in 2008.
The collapse was coming. The banks were shorting out. The real estate market was a confederacy of dunces. Bernie Madoff's shadow loomed. Occupy was on the horizon. And all those Wall Street yahoos were beginning to squirm.
Along came bitcoin like some Jesse James of the financial imagination. It was the biggest disruption of money since coins. Here was an idea that could revolutionize the financial world. A communal articulation of a new era. Fuck American Express. Fuck Western Union. Fuck Visa. Fuck the Fed. Fuck the Treasury. Fuck the deregulated thievery of the twenty-first century.
To the earliest settlers, bitcoin suggested a moral way out. It was a money created from the ground up, a currency of the people, by the people, for the people, with all government control extinguished. It was built on a solid base of blockchain technology where everyone participated in the protection of the code. It attracted anarchists, libertarians, whistle-blowers, cypherpunks, economists, extropians, geeks, upstairs, downstairs, left-wing, right-wing. Sure, it could be used by businesses and corporations, but it could also be used by poor people and immigrants to send money home, instantly, honestly, anonymously, without charge, with a click of the keyboard. Everyone in the world had access to your transaction, but nobody had to know your name. It bypassed the suits. All you needed to move money was a phone or a computer. It was freedom of economic action, a sort of anarchy at its democratic best, no rulers, just rules.
Bitcoin, to the original explorers, was a safe pass through the government-occupied valleys: Those assholes were up there in the hills, but they didn't have any scopes on their rifles, and besides, bitcoin went through in communal wagons at night.
Ordinary punters took a shot. Businesses, too. You could buy silk ties in Paris without any extra bank charges. You could protect your money in Buenos Aires without fear of a government grab.
The Winklevoss twins leave the U.S. Court of Appeals in 2011, after appearing in court to ask that the previous settlement case against Facebook be voided. GETTY But freedom can corrupt as surely as power. It was soon the currency that paid for everything illegal under the sun, the go-to money of the darknet. The westward ho! became the outlaw territory of Silk Road and beyond. Heroin through the mail. Cocaine at your doorstep. Child porn at a click. What better way for terrorists to ship money across the world than through a network of anonymous computers? Hezbollah, the Taliban, the Mexican cartels. In Central America, kidnappers began demanding ransom in bitcoin—there was no need for the cash to be stashed under a park bench anymore. Now everything could travel down the wire. Grab, gag, and collect. Uranium could be paid for in bitcoin. People, too. The sex trade was turned on: It was a perfect currency for Madame X. For the online gambling sites, bitcoin was pure jackpot.
For a while, things got very shady indeed. Over a couple years, the rate pinballed between $10 and $1,200 per bitcoin, causing massive waves and troughs of online panic and greed. (In recent times, it has begun to stabilize between $350 and $450.) In 2014, it was revealed that hackers had gotten into the hot wallet of Mt. Gox, a bitcoin exchange based in Tokyo. A total of 850,000 coins were "lost," at an estimated value of almost half a billion dollars. The founder of Silk Road, Ross William Ulbricht (known as "Dread Pirate Roberts"), got himself a four-by-six room in a federal penitentiary for life, not to mention pending charges for murder-for-hire in Maryland.
Everyone thought that bitcoin was the problem. The fact of the matter was, as it so often is, human nature was the problem. Money means desire. Desire means temptation. Temptation means that people get hurt.
During the first Gold Rush in the late 1840s, the belief was that all you needed was a pan and a decent pair of boots and a good dose of nerve and you could go out and make yourself a riverbed millionaire. Even Jack London later fell for the lure of it alongside thousands of others: the western test of manhood and the promise of wealth. What they soon found out was that a single egg could cost twenty-five of today's dollars, a pound of coffee went for a hundred, and a night in a whorehouse could set you back $6,000.
A few miners hit pay dirt, but what most ended up with for their troubles was a busted body and a nasty dose of syphilis.
The gold was discovered on the property of John Sutter in Sacramento, but the one who made the real cash was a neighboring merchant, Samuel Brannan. When Brannan heard the news of the gold nuggets, he bought up all the pickaxes and shovels he could find, filled a quinine bottle with gold dust, and went to San Francisco. Word went around like a prayer in a flash flood: gold gold gold. Brannan didn't wildcat for gold himself, but at the peak of the rush he was flogging $5,000 worth of shovels a day—that's $155,000 today—and went on to become the wealthiest man in California, alongside the Wells Fargo crew, Levi Strauss, and the Studebaker family, who sold wheelbarrows.
If you comb back through the Winklevoss family, you will find a great-grandfather and a great-great-grandfather who knew a thing or two about digging: They worked side by side in the coal mines of Pennsylvania. They didn't go west and they didn't get rich, but maybe the lesson became part of their DNA: Sometimes it's the man who sells the shovels who ends up hitting gold.
Like it or not—and many people don't like it—the Winklevoss brothers are shaping up to be the Samuel Brannans of the bitcoin world.
Nine months after being portrayed in The Social Network, the Winklevoss twins were back out on the water at the World Rowing Cup. CHRISTOPHER LEE/GETTY They heard about it first poolside in Ibiza, Spain. Later it would play into the idea of ease and privilege: umbrella drinks and girls in bikinis. But if the creation myth was going to be flippant, the talk was serious. "I'd say we were cautious, but we were definitely intrigued," says Cameron. They went back home to New York and began to read. There was something about it that got under their skin. "We knew that money had been so broken and inefficient for years," says Tyler, "so bitcoin appealed to us right away."
They speak in braided sentences, catching each other, reassuring themselves, tightening each other's ideas. They don't quite want to say that bitcoin looked like something that might be redemptive—after all, they, like everyone else, were looking to make money, lots of it, Olympic-sized amounts—but they say that it did strike an idealistic chord inside them. They certainly wouldn't be cozying up to the anarchists anytime soon, but this was a global currency that, despite its uncertainties, seemed to present a solution to some of the world's more pressing problems. "It was borderless, instantaneous, irreversible, decentralized, with virtually no transaction costs," says Tyler. It could possibly cut the banks out, and it might even take the knees out from under the credit-card companies. Not only that, but the price, at just under ten dollars per coin, was in their estimation low, very low. They began to snap it up.
They were aware, even at the beginning, that they might, once again, be called Johnny-come-latelys, just hopping blithely on the bandwagon—it was 2012, already four years into the birth of the currency—but they went ahead anyway, power ten. Within a short time they'd spent $11 million buying up a whopping 1 percent of the world's bitcoin, a position they kept up as more bitcoins were mined, making their 1 percent holding today worth about $66 million.
But bitcoin was flammable. The brothers felt the burn quickly. Their next significant investment came later that year, when they gave $1.5 million in venture funding to a nascent exchange called BitInstant. Within a year the CEO was arrested for laundering drug money through the exchange.
So what were a pair of smart, clean-cut Olympic rowers doing hanging around the edges of something so apparently shady, and what, if anything, were they going to do about it?
They mightn't have thought of it this way, but there was something of the sheriff striding into town, the one with the swagger and the scar, glancing up at the balconies as he comes down Main Street, all tumbleweeds and broken pianos. This place was a dump in most people's eyes, but the sheriff glimpsed his last best shot at finally getting the respect he thinks he deserves.
The money shot: A good stroke will catch the water almost without breaking its seal. You stir without rippling. Your silence is sinewy. There's muscle in that calm. The violence catches underneath, thrusts the boat along. Stroke after stroke. Just keep going. Today's truth dies tomorrow. What you have to do is elemental enough. You row without looking behind you. You keep the others in front of you. As long as you can see what they're doing, it's all in your hands. You are there to out-pain them. Doesn't matter who they are, where they come from, how they got here. Know your enemy through yourself. Push through toward pull. Find the still point of this pain. Cut a melody in the disk of your flesh. The only terror comes when they pass you—if they ever pass you.
There are no suits or ties, but there is a white hum in the offices of Gemini in the Flatiron District. The air feels as if it has been brushed clean. There is something so everywhereabout the place. Ergonomic chairs. iPhone portals. Rows of flickering computers. Not so much a hush around the room as a quiet expectation. Eight, nine people. Programmers, analysts, assistants. Other employees—teammates, they call them—dialing in from Portland, Oregon, and beyond.
The brothers fire up the room when they walk inside. A fist-pump here, a shoulder touch there. At the same time, there is something almost shy about them. Apart, they seem like casual visitors to the space they inhabit. It is when they're together that they feel fully shaped. One can't imagine them being apart from each other for very long.
The Winklevoss twins speak onstage at Bitcoin! Let's Cut Through the Noise Already at SXSW in 2016. GETTY They move from desk to desk. The price goes up, the price goes down. The phones ring. The e-mails beep. Customer-service calls. Questions about fees. Inquiries about tax structures.
Gemini was started in late 2015 as a next-generation bitcoin exchange. It is not the first such exchange in the world by any means, but it is one of the most watched. The company is designed with ordinary investors in mind, maybe a hedge fund, maybe a bank: all those people who used to be confused or even terrified by the word bitcoin. It is insured. It is clean. What's so fascinating about this venture is that the brothers are risking themselves by trying to eliminate risk: keeping the boat steady and exploding through it at the same time.
It is when they're together that they feel fully shaped. One can't imagine them being apart from each other for very long. For the past couple years, the Winklevosses have worked closely with just about every compliance agency imaginable. They ticked off all the regulatory boxes. Essentially they wanted to ease all the Debting Thomases. They put regulatory frameworks in place. Security and bankability and insurance were their highest objectives. Nobody was going to be able to blow open the safe. They wanted to soothe all the appetites for risk. They told Bitcoin Magazine they were asking for "permission, not forgiveness."
This is where bitcoin can become normal—that is, if you want bitcoin to be normal.
Just a mile or two down the road, in Soho, a half dozen bitcoiners gather at a meetup. The room is scruffy, small, boxy. A half mannequin is propped on a table, a scarf draped around it. It's the sort of place that twenty years ago would have been full of cigarette smoke. There's a bit of Allen Ginsberg here, a touch of Emma Goldman, a lot of Zuccotti Park. The wine is free and the talk is loose. These are the true believers. They see bitcoin in its clearest possible philosophical terms—the frictionless currency of the people, changing the way people move money around the world, bypassing the banks, disrupting the status quo.
A comedy show is being run out in the backyard. A scruffy young man wanders in and out, announcing over and over again that he is half-baked. A well-dressed Asian girl sidles up to the bar. She looks like she's just stepped out of an NYU business class. She's interested in discovering what bitcoin is. She is regaled by a series of convivial answers. The bartender tells her that bitcoin is a remaking of the prevailing power structures. The girl asks for another glass of wine. The bartender adds that bitcoin is democracy, pure and straight. She nods and tells him that the wine tastes like cooking oil. He laughs and says it wasn't bought with bitcoin. "I don't get it," she says. And so the evening goes, presided over by Margaux Avedisian, who describes herself as the queen of bitcoin. Avedisian, a digital-currency consultant of Armenian descent, is involved in several high-level bitcoin projects. She has appeared in documentaries and on numerous panels. She is smart, sassy, articulate.
When the talk turns to the Winklevoss brothers, the bar turns dark. Someone, somewhere, reaches up to take all the oxygen out of the air. Avedisian leans forward on the counter, her eyes shining, delightful, raged.
"The Winklevii are not the face of bitcoin," she says. "They're jokes. They don't know what they're saying. Nobody in our community respects them. They're so one-note. If you look at their exchange, they have no real volume, they never will. They keep throwing money at different things. Nobody cares. They're not part of us. They're just hangers-on."
"Ah, they're just assholes," the bartender chimes in.
"What they want to do," says Avedisian, "is lobotomize bitcoin, make it into something entirely vapid. They have no clue."
The Asian girl leaves without drinking her third glass of free wine. She's got a totter in her step. She doesn't quite get the future of money, but then again maybe very few in the world do.
Giving testimony on bitcoin licensing before the New York State Department of Financial Services in 2014. LUCAS JACKSON/REUTERS The future of money might look like this: You're standing on Oxford Street in London in winter. You think about how you want to get to Charing Cross Road. The thought triggers itself through electrical signals into the chip embedded in your wrist. Within a moment, a driverless car pulls up on the sensor-equipped road. The door opens. You hop in. The car says hello. You tell it to shut up. It does. It already knows where you want to go. It turns onto Regent Street. You think,A little more air-conditioning, please. The vents blow. You think, Go a little faster, please. The pace picks up. You think, This traffic is too heavy, use Quick(TM). The car swings down Glasshouse Street. You think, Pay the car in front to get out of my way. It does. You think, Unlock access to a shortcut. The car turns down Sherwood Street to Shaftsbury Avenue. You pull in to Charing Cross. You hop out. The car says goodbye. You tell it to shut up again. You run for the train and the computer chip in your wrist pays for the quiet-car ticket for the way home.
All of these transactions—the air-conditioning, the pace, the shortcut, the bribe to get out of the way, the quick lanes, the ride itself, the train, maybe even the "shut up"—will cost money. As far as crypto-currency enthusiasts think, it will be paid for without coins, without phones, without glass screens, just the money coming in and going out of your preprogrammed wallet embedded beneath your skin.
The Winklevosses are betting that the money will be bitcoin. And that those coins will flow through high-end, corporate-run exchanges like Gemini rather than smoky SoHo dives.
Cameron leans across a table in a New York diner, the sort of place where you might want to polish your fork just in case, and says: "The future is here, it's just not evenly distributed yet." He can't remember whom the quote belongs to, but he freely acknowledges that it's not his own. Theirs is a truculent but generous intelligence, capable of surprise and turn at the oddest of moments. They talk meditation, they talk economics, they talk Van Halen, they talk, yes, William Gibson, but everything comes around again to bitcoin.
"The key to all this is that people aren't even going to know that they're using bitcoin," says Tyler. "It's going to be there, but it's not going to be exposed to the end user. Bitcoin is going to be the rails that underpin our payment systems. It's just like an IP address. We don't log on to a series of numbers, 115.425.5 or whatever. No, we log on to Google.com. In the same way, bitcoin is going to be disguised. There will be a body kit that makes it user-friendly. That's what makes bitcoin a kick-ass currency."
Any fool can send a billion dollars across the world—as long as they have it, of course—but it's virtually impossible to send a quarter unless you stick it in an envelope and pay forty-nine cents for a stamp. It's one of the great ironies of our antiquated money system. And yet the quark of the financial world is essentially the small denomination. What bitcoin promises is that it will enable people and businesses to send money in just about any denomination to one another, anywhere in the world, for next to nothing. A public address, a private key, a click of the mouse, and the money is gone.
A Bitcoin conference in New York City in 2014. GETTY This matters. This matters a lot. Credit-card companies can't do this. Neither can the big banks under their current systems. But Marie-Louise on the corner of Libertador Avenue can. And so can Pat Murphy in his Limerick housing estate. So can Mark Andreessen and Bill Gates and Laurene Powell Jobs. Anyone can do it, anywhere in the world, at virtually no charge.
You can do it, in fact, from your phone in a diner in New York. But the whole time they are there—over identical California omelettes that they order with an ironic shrug—they never once open their phones. They come across more like the talkative guys who might buy you a drink at the sports bar than the petulants ordering bottle service in the VIP corner. The older they get, the more comfortable they seem in their contradictions: the competition, the ease; the fame, the quiet; the gamble, the sure thing.
Bitcoin is what might eventually make them among the richest men in America. And yet. There is always a yet. What seems indisputable about the future of money, to the Winklevosses and other bitcoin adherents, is that the technology that underpins bitcoin—the blockchain—will become one of the fundamental tenets of how we deal with the world of finance. Blockchain is the core computer code. It's open source and peer to peer—in other words, it's free and open to you and me. Every single bitcoin transaction ever made goes to an open public ledger. It would take an unprecedented 51 percent attack—where one entity would come to control more than half of the computing power used to mine bitcoin—for hackers to undo it. The blockchain is maintained by computers all around the world, and its future sidechains will create systems that deal with contracts and stock and other payments. These sidechains could very well be the foundation of the new global economy for the big banks, the credit-card companies, and even government itself.
"It's boundless," says Cameron.
This is what the brothers are counting on—and what might eventually make them among the richest men in America.
And yet. There is always a yet.
When you delve into the world of bitcoin, it gets deeper, darker, more mysterious all the time. Why has its creator remained anonymous? Why did he drop off the face of the earth? How much of it does he own himself? Will banks and corporations try to bring the currency down? Why are there really only five developers with full "commit access" to the code (not the Winklevosses, by the way)? Who is really in charge of the currency's governance?
Perhaps the most pressing issue at hand is that of scaling, which has caused what amounts to a civil war among followers. A maximum block size of one megabyte has been imposed on the chain, sort of like a built-in artificial dampener to keep bitcoin punk rock. That's not nearly enough capacity for the number of transactions that would take place in future visions. In years to come, there could be massive backlogs and outages that could create instant financial panic. Bitcoin's most influential leaders are haggling over what will happen. Will bitcoin maintain its decentralized status, or will it go legit and open up to infinite transactions? And if it goes legit, where's the punk?
The issues are ongoing—and they might very well take bitcoin down, but the Winklevosses don't think so. They have seen internal disputes before. They've refrained from taking a public stance mostly because they know that there are a lot of other very smart people in bitcoin who are aware that crisis often builds consensus. "We're in this for the long haul," says Tyler. "We're the first batter in the first inning."
GILLIAN LAUB The waiter comes across and asks them, bizarrely, if they're twins. They nod politely. Who was born first? They've heard it a million times and their answer is always the same: Neither of them—they were born cesarean. Cameron looks older, says the waiter. Tyler grins. Normally it's the other way around, says Cameron, grinning back. Do you ever fight? asks the waiter. Every now and then, they say. But not over this, not over the future.
Heraclitus was wrong. You can, in fact, step in the same river twice. In the beginning you went to the shed. No electricity there, no heat, just a giant tub where you simulated the river. You could only do eleven strokes. But there was something about the repetition, the difference, even the monotony, that hooked you. After a while it wasn't an abandoned shed anymore. College gyms, national training centers. Bigger buildings. High ceilings. AC. Doctors and trainers. Monitors hooked up to your heart, your head, your blood. Six foot five, but even then you were not as tall as the other guys. You liked the notion of underdog. Everyone called you the opposite. The rich kids. The privileged ones. To hell with that. They don't know us, who we are, where we came from. Some of the biggest chips rest on the shoulders of those with the least to lose. Six foot five times two makes just about thirteen feet. You sit in the erg and you stare ahead. Day in, day out. One thousand strokes, two thousand. You work with the very best. You even train with the Navy SEALs. It touches that American part of you. The sentiment, the false optimism. When the oil fields are burning, you even think, I'll go there with them. But you stay in the boat. You want that other flag rising. That's what you aim for. You don't win but you get close. Afterward there are planes, galas, regattas, magazine spreads, but you always come back to that early river. The cold. The fierceness. The heron. Like it or not, you're never going to get off the water—that's just the fact of the matter, it's always going to be there. Hard to admit it, but once you were wrong. You got out of the boat and you haggled over who made it. You lost that one, hard. You might lose this one, too, but then again it just might be the original arc that you're stepping toward. So you return, then. You rise before dark. You drag your carcass along Broadway before dawn.
All the rich men in the world want to get shot into outer space. Richard Branson. Jeff Bezos. Elon Musk. The new explorers. To get the hell out of here and see if they—and maybe we—can exist somewhere else for a while. It's the story of the century. We want to know if the pocket of the universe can be turned inside out. We're either going to bring all the detritus of the world upward with us or we're going to find a brand-new way to exist. The cynical say that it's just another form of colonization—they're probably right, but then again maybe it's our only way out.
The Winklevosses have booked their tickets—numbers 700 and 701—on Branson's Virgin Galactic. Although they go virtually everywhere together, the twins want to go on different flights because of the risk involved: Now that they're in their mid-thirties, they can finally see death, or at least its rumor. It's a boy's adventure, but it's also the outer edge of possibility. It cost a quarter of a million dollars per seat, and they paid for it, yes, in bitcoin.
Of course, up until recently, the original space flights all splashed down into the sea. One of the ships that hauled the Gemini space capsule out of the water in 1965 was the Intrepid aircraft carrier.
The Winklevosses no longer pull their boat up the river. Instead they often run five miles along the Hudson to the Intrepid and back. The destroyer has been parked along Manhattan's West Side for almost as long as they have been alive. It's now a museum. The brothers like the boat, its presence, its symbolism: Intrepid, Gemini, the space shot.
They ease into the run.
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Jpm calls Bitcoin fraud... Gets prosecuted for... Fraud... LOL

This is the best tl;dr I could make, original reduced by 74%. (I'm a bot)
A Dallas jury ordered JPMorgan Chase to pay more than $4 billion in damages for mishandling the estate of a former American Airlines executive.
Jo Hopper and two stepchildren won a probate court verdict over claims that JPMorgan mismanaged the administration of the estate of Max Hopper, who was described as an airline technology innovator by the family's law firm.
The bank, which was hired by the family in 2010 to independently administer the estate of Hopper, was found in breach of its fiduciary duties and contract.
In total, JP Morgan Chase was ordered to pay at least $4 billion in punitive damages, approximately $4.7 million in actual damages, and $5 million in attorney fees.
With respect to Mr. Hopper's adult children, the jury found that they lost potential inheritance in excess of $3 million when the Bank chose to pay its lawyers' legal fees out of the estate account to defend claims against the Bank for violating its fiduciary duty.
According to Bloomberg, it would rank high among the largest sanctions ever levied against the bank - somewhere between the $2.6 billion it agreed to pay in 2014 for allegedly failing to stop Bernard Madoff's Ponzi scheme, and a $13 billion settlement it reached with government authorities in 2013 for its handling of mortgage bonds that fueled the financial crisis.
Summary Source | FAQ | Feedback | Top keywords: bank#1 Hopper#2 damage#3 billion#4 jury#5
Post found in /Bitcoin and /BitcoinAll.
NOTICE: This thread is for discussing the submission topic. Please do not discuss the concept of the autotldr bot here.
submitted by autotldr to autotldr [link] [comments]

Subreddit Stats: CryptoCurrency top posts from 2017-10-09 to 2017-11-08 00:59 PDT

Period: 29.75 days
Submissions Comments
Total 996 48685
Rate (per day) 33.47 1613.22
Unique Redditors 685 9122
Combined Score 139413 218282

Top Submitters' Top Submissions

  1. 5159 points, 3 submissions: VeryAngryFish
    1. Invest in Chinese. Funny comment I found on FB. (2823 points, 91 comments)
    2. Put everything in bitcoin and live like a homeless person. Funny comment I found on youtube. (2239 points, 273 comments)
    3. Saw this on 9gag. How would Bitcoin Monopoly handle it? (97 points, 18 comments)
  2. 3789 points, 5 submissions: Goal1
    1. Me trying to balance out my portfolio (1605 points, 57 comments)
    2. I finally made it to $1 million dollars in crypto! (673 points, 101 comments)
    3. My reaction when I realize how much of a ponzi scheme Bitconnect is (609 points, 163 comments)
    4. How I low key feel everyday (x-post from /Bitcoin) (468 points, 30 comments)
    5. My coworker asked me about Bitcoin gold this morning (434 points, 50 comments)
  3. 3144 points, 45 submissions: CryptoCurrencyNews
    1. Putin Tells Central Bank Not to Create Unnecessary Barriers to Cryptocurrencies (448 points, 88 comments)
    2. Bitcoin, Altcoin Exchange Bittrex Eyed With Suspicion Due to Thousands of Mysterious Account Closings (254 points, 37 comments)
    3. Chinese Might be Able to Trade Bitcoin Again Soon (233 points, 60 comments)
    4. Monero Price Rises to $100 Again in Wake of Multisignature News (145 points, 33 comments)
    5. Monero’s “IP Address Leak” Isn’t an Exploit and Doesn’t Affect Anonymity (133 points, 24 comments)
    6. BREAKING: Russia Issuing ‘CryptoRuble’ (130 points, 86 comments)
    7. Putin Confirms Russia Will Regulate Cryptocurrencies (114 points, 23 comments)
    8. Bitcoin Exchange Coinbase adds 100,000 users in 24 hrs, Shows Surging Interest in Crypto (88 points, 18 comments)
    9. Litecoin Price Moves Toward $70 as Bullish Momentum Intensifies (76 points, 14 comments)
    10. Ukraine’s New Bill Treats Bitcoin as Financial Asset and Encourages Mining (75 points, 1 comment)
  4. 2951 points, 12 submissions: CryptopherWalken
    1. How to manipulate the market and get rich! (Bitcoin Gold) (1641 points, 280 comments)
    2. Analysis: Bittrex is responsible for the crash of every alt it lists. (253 points, 145 comments)
    3. For everyone who is losing hope: DON'T FORGET WHAT HAPPENED TO ALTS AFTER THE BITCOIN CASH FORK!! (251 points, 289 comments)
    4. One of these is an Altcoin chart (OMG, in satoshis), the other is the Bitcoin chart upside down. Same time period. (205 points, 81 comments)
    5. The altcoins I'm buying after (or maybe just before) the fork. (145 points, 207 comments)
    6. BITCOIN GOLD FORK HAS OCCURRED - BLOCK 491407 REACHED (127 points, 88 comments)
    7. Why isn't there more enthusiasm about QTUM? (85 points, 239 comments)
    8. Bitcoin Gold $150 LOL (80 points, 100 comments)
    9. XtraBytes (XBY) - An Emergent Cryptocurrency Platform Featuring the Brand New Proof-Of-Signature (PoSign) Consensus Algorithm, offering significant advantages over existing platforms. Take a look? (55 points, 75 comments)
    10. EVX - Everex - $1.40 to $2.29 since posted here yesterday! (43 points, 30 comments)
  5. 2499 points, 1 submission: bizshawn
    1. Spotted this Tesla in Stockholm. (2499 points, 211 comments)
  6. 2436 points, 1 submission: TacoWarez
    1. A gif of me trying to daytrade (2436 points, 149 comments)
  7. 2297 points, 2 submissions: zigzagzig
    1. I made some fully-knit ugly crypto sweaters. Love how they turned out! Accepting crypto for sweaters :) (2268 points, 282 comments)
    2. KuCoin Exchange - Why I think it's Binance's first true competitor (29 points, 45 comments)
  8. 2210 points, 1 submission: Konjitsu
    1. Crypto Ecosystem (2210 points, 345 comments)
  9. 1913 points, 1 submission: JPTIII
    1. The FCC is expected to announce a vote to gut net neutrality rules the day before Thanksgiving. Only a big burst of phone calls to Congress can stop them from allowing ISPs to charge extra fees to access sites, apps, and send cryptocurrency. This is a direct threat to the growth of the cryptomarket. (1913 points, 368 comments)
  10. 1910 points, 1 submission: shendo-tech
    1. This is exactly what happens when you don't HODL. (1910 points, 127 comments)
  11. 1798 points, 5 submissions: dogmanto
    1. Attention Altcoin Peasants! @thelolcrypto (1113 points, 258 comments)
    2. Bernie Madoff's Favorite Cryptocurrency (562 points, 102 comments)
    3. Ethereum & The Parity Debable @thelolcrypto (48 points, 13 comments)
    4. Neo Ver and Morpheus! @thelolcrypto (42 points, 9 comments)
    5. House Ver and the Knights Winklevoss - By @THELOLCRYPTO (33 points, 1 comment)
  12. 1695 points, 1 submission: jbhewitt12
    1. Julian Assange - "My deepest thanks to the US government, Senator McCain and Senator Lieberman for pushing Visa, MasterCard, Payal, AmEx, Mooneybookers, et al, into erecting an illegal banking blockade against @WikiLeaks starting in 2010. It caused us to invest in Bitcoin -- with > 50000% return." (1695 points, 168 comments)
  13. 1679 points, 1 submission: We_are_all_satoshi
    1. Where we're going, we don't need fiat. (1679 points, 115 comments)
  14. 1630 points, 1 submission: buffalolsx
    1. Announcing: Bitcoin Platinum - A revolutionary evolution of Bitcoin. (1630 points, 244 comments)
  15. 1569 points, 3 submissions: Exchangerates
    1. How i feel looking at my portfolio this week (1022 points, 143 comments)
    2. How some people see Bitcoin Gold... (498 points, 146 comments)
    3. Enjin Coin: Development Update — October 12, 2017 (49 points, 15 comments)
  16. 1469 points, 1 submission: notsonot
    1. Full-page crypto ad in this morning's Wall Street Journal (1469 points, 103 comments)
  17. 1414 points, 1 submission: opticillusion
    1. Wise Words (1414 points, 110 comments)
  18. 1321 points, 1 submission: throwingaway9987
    1. Coinbase announces instant BTC, ETH, and LTC purchases from US Bank Accounts (1321 points, 252 comments)
  19. 1239 points, 3 submissions: Wauri12
    1. Would you like to see Amazon accepting Bitcoin & even Altcoins as new payment method? (974 points, 344 comments)
    2. BTC Market Cap > $100,000,000,000 (167 points, 25 comments)
    3. Vertcoin Market Cap > $100.000.000 Will Vertcoin even beat Dogecoin? (98 points, 81 comments)
  20. 1218 points, 2 submissions: Dorian7
    1. Lets drop the term "altcoin" and only speak about cryptocurrencies (1089 points, 323 comments)
    2. Bluechips ETH, XMR and IOTA will be the strong survivors (129 points, 226 comments)

Top Commenters

  1. Dramza (1444 points, 373 comments)
  2. ethswagholder (1132 points, 432 comments)
  3. Darius510 (1127 points, 119 comments)
  4. Zouden (951 points, 255 comments)
  5. jam-hay (932 points, 155 comments)
  6. addsAudiotoVideo (861 points, 601 comments)
  7. Kpenney (827 points, 215 comments)
  8. stunvn (827 points, 142 comments)
  9. Dorian7 (820 points, 70 comments)
  10. zimmah (780 points, 225 comments)
  11. Threat-Level-Midnite (764 points, 183 comments)
  12. suchClouds (707 points, 54 comments)
  13. DesignCrypto (664 points, 7 comments)
  14. TheArtofSaul (653 points, 56 comments)
  15. identiifiication (628 points, 100 comments)
  16. dk124497 (617 points, 39 comments)
  17. VikNoob (612 points, 4 comments)
  18. 987963 (607 points, 15 comments)
  19. 5starkarma (603 points, 36 comments)
  20. CanadianCryptoGuy (575 points, 108 comments)

Top Submissions

  1. Invest in Chinese. Funny comment I found on FB. by VeryAngryFish (2823 points, 91 comments)
  2. Spotted this Tesla in Stockholm. by bizshawn (2499 points, 211 comments)
  3. A gif of me trying to daytrade by TacoWarez (2436 points, 149 comments)
  4. I made some fully-knit ugly crypto sweaters. Love how they turned out! Accepting crypto for sweaters :) by zigzagzig (2268 points, 282 comments)
  5. Put everything in bitcoin and live like a homeless person. Funny comment I found on youtube. by VeryAngryFish (2239 points, 273 comments)
  6. Crypto Ecosystem by Konjitsu (2210 points, 345 comments)
  7. The FCC is expected to announce a vote to gut net neutrality rules the day before Thanksgiving. Only a big burst of phone calls to Congress can stop them from allowing ISPs to charge extra fees to access sites, apps, and send cryptocurrency. This is a direct threat to the growth of the cryptomarket. by JPTIII (1913 points, 368 comments)
  8. This is exactly what happens when you don't HODL. by shendo-tech (1910 points, 127 comments)
  9. Julian Assange - "My deepest thanks to the US government, Senator McCain and Senator Lieberman for pushing Visa, MasterCard, Payal, AmEx, Mooneybookers, et al, into erecting an illegal banking blockade against @WikiLeaks starting in 2010. It caused us to invest in Bitcoin -- with > 50000% return." by jbhewitt12 (1695 points, 168 comments)
  10. Where we're going, we don't need fiat. by We_are_all_satoshi (1679 points, 115 comments)

Top Comments

  1. 626 points: 987963's comment in I finally made it to $1 million dollars in crypto!
  2. 614 points: DesignCrypto's comment in Would you like to see Amazon accepting Bitcoin & even Altcoins as new payment method?
  3. 574 points: VikNoob's comment in Announcing: Bitcoin Platinum - A revolutionary evolution of Bitcoin.
  4. 472 points: mikenz1234's comment in Bitcoin's market value is now larger than Goldman Sachs and Morgan Stanley
  5. 464 points: sparticle601's comment in This might just be getting a bit ridiculous [Repost: /bitcoin]
  6. 455 points: Cryptonair's comment in Announcing: Bitcoin Platinum - A revolutionary evolution of Bitcoin.
  7. 446 points: Larkinz's comment in Attention Altcoin Peasants! @thelolcrypto
  8. 444 points: Codexlibero's comment in How to manipulate the market and get rich! (Bitcoin Gold)
  9. 408 points: omni_whore's comment in Put everything in bitcoin and live like a homeless person. Funny comment I found on youtube.
  10. 399 points: damian2000's comment in Why and how the Cryptobubble will burst. Great read if you want a contrarian opinion.
Generated with BBoe's Subreddit Stats (Donate)
submitted by Doom-sprayer to subreddit_stats [link] [comments]

JPMorgan Ordered to Pay More Than $4 Billion to Widow and Family

This is the best tl;dr I could make, original reduced by 66%. (I'm a bot)
JPMorgan Chase & Co. was ordered by a Dallas jury to pay more than $4 billion in damages for mishandling the estate of a former American Airlines executive, but the verdict will probably be knocked down on appeal.
The court's verdict form shows jurors awarded $8 billion in punitive damages against the bank.
As a result, he said, the punitive damage award could end up being "Somewhere between $4 billion and $8 billion."
At the lower end of that range, the jury's award would erase almost two-thirds of the $6.6 billion profit that JPMorgan generated globally during the second quarter.
It would rank high among the largest sanctions ever levied against the bank - somewhere between the $2.6 billion it agreed to pay in 2014 for allegedly failing to stop Bernard Madoff's Ponzi scheme, and a $13 billion settlement it reached with government authorities in 2013 for its handling of mortgage bonds that fueled the financial crisis.
The verdict form shows jurors were advised to consider factors including "The net worth of JPMorgan." Indeed, the bank has a stock market value of about $330 billion.
Summary Source | FAQ | Feedback | Top keywords: bank#1 billion#2 verdict#3 Hopper#4 damage#5
Post found in /news, /Bitcoin, /btc, /ethtrader and /BitcoinAll.
NOTICE: This thread is for discussing the submission topic. Please do not discuss the concept of the autotldr bot here.
submitted by autotldr to autotldr [link] [comments]

JPMorgan does more fraud... I mean normal banking services

This is the best tl;dr I could make, original reduced by 66%. (I'm a bot)
JPMorgan Chase & Co. was ordered by a Dallas jury to pay more than $4 billion in damages for mishandling the estate of a former American Airlines executive, but the verdict will probably be knocked down on appeal.
The court's verdict form shows jurors awarded $8 billion in punitive damages against the bank.
As a result, he said, the punitive damage award could end up being "Somewhere between $4 billion and $8 billion."
At the lower end of that range, the jury's award would erase almost two-thirds of the $6.6 billion profit that JPMorgan generated globally during the second quarter.
It would rank high among the largest sanctions ever levied against the bank - somewhere between the $2.6 billion it agreed to pay in 2014 for allegedly failing to stop Bernard Madoff's Ponzi scheme, and a $13 billion settlement it reached with government authorities in 2013 for its handling of mortgage bonds that fueled the financial crisis.
The verdict form shows jurors were advised to consider factors including "The net worth of JPMorgan." Indeed, the bank has a stock market value of about $330 billion.
Summary Source | FAQ | Feedback | Top keywords: bank#1 billion#2 verdict#3 Hopper#4 damage#5
Post found in /Bitcoin, /news, /btc, /ethtrader and /BitcoinAll.
NOTICE: This thread is for discussing the submission topic. Please do not discuss the concept of the autotldr bot here.
submitted by autotldr to autotldr [link] [comments]

Bitcoin gets some positive business press in Oklahoma. How did I do?

I got an email from a reporter early yesterday, a photographer showed up later in the day, and here is the result.
http://journalrecord.com/2013/08/01/local-traders-unmoved-by-sec-bitcoin-warning-finance/
Article went behind paywall, so here is text:
TULSA – To alleviate some of his unease about the economy, Tulsa resident Christopher King saves some of his personal wealth in non-dollar assets such as silver and Bitcoins.
The latter currency has been trading lately at a ratio of about 1 Bitcoin per $100. When the King family savings account reaches a certain level, dollar-wise, King said he has to put his wife’s concerns to rest over the latest developments in the Bitcoin market.
“My spouse is not as sold on it as I am,” he said. “It’s the same with any investment – you have to explain your reasons to the boss. And we’re focused on moving at the end of the year, so she’s more focused on dollar amounts right now.”
Their next chat will probably include details about the latest SEC action: The Securities and Exchange Commission last week issued an alert warning investors about the dangers of potential investment scams involving virtual currencies promoted through the Internet. The warning follows the SEC’s charges against Texan Trendon Shavers and his company on allegations he defrauded investors in a Ponzi scheme involving Bitcoin, a virtual currency traded on online exchanges for conventional currencies.
Officials at the SEC said Shavers, as the founder and operator of Bitcoin Savings and Trust, or BTCST, sold Bitcoin-denominated investments through Internet aliases. Shavers raised at least 700,000 Bitcoin in BTCST investments, or more than $4.5 million in 2011 and 2012 currency rate exchange values. Those Bitcoin resources now have a value of more than $60 million.
The SEC alleges that Shavers promised investors up to 7-percent weekly interest based on BTCST’s Bitcoin market arbitrage activity. Instead, Shavers was running a Ponzi scheme, using new investors to pay off earlier promises, officials said. Adding insult to injury, Shavers exchanged investors’ Bitcoin for U.S. dollars to pay his personal expenses.
“The short answer is that financial scams are everywhere and it pays to be cautious about any investment and ensure that you understand it and trust those operating it, before giving them your dollars or your Bitcoins,” said Tulsa Bitcoin trader Ryan Underwood.
“This question of where to place confidence is not a Bitcoin-specific issue but a problem with all investments that make future promises in exchange for taking investor money in the present,” Underwood said. Citing former stockbroker Bernie Madoff’s massive Ponzi scheme a few years ago, he said, “The SEC did not protect investors from Madoff despite numerous whistle-blowers coming forward in advance. Only their own diligence could have protected them.”
Underwood has as much confidence in Bitcoin as King; they’re both members of the Tulsa Bitcoin Buttonwood group, which meets at a local coffee shop each month to talk about the Bitcoin economy.
Bitcoin credit is harder to come by in a dollar-based society. King said he has paid for a sticker printing job in Bitcoin and identified a local pizza parlor that accepts Bitcoin online, but otherwise the currency in America is still more of a value savings unit than final token of merchant exchange. As an early adopter of the concept, King is biding his time and waiting for everyone to catch up.
“At first, I was a real booster and tried to get brick-and-mortar shops to accept it,” he said. “But there’s a huge technology gap. …When I start talking about virtual currency, I’ve seen too many eyes glaze over. I even struggle with my own elevator pitch.”
In simple terms, Bitcoin is a token of exchange with value determined by users, much like euros or dollars. But Bitcoin is not issued or overseen by any government agency; it does not exist in a physical form; and it is not based on a standard resource such as gold.
Bitcoin was established in 2009 by an unknown individual or group operating under the pseudonym of Satoshi Nakamoto. That entity has yet to be identified, although users believe Nakamoto left the project in 2010. The system Nakamoto devised doesn’t rely on a central manager; the worldwide Bitcoin ledger is maintained in a decentralized peer-to-peer network and verified with high-level, digital cryptography.
Further, since the Bitcoin system is believed to have an upper limit of 21 million, as long as another agency doesn’t step in, Bitcoin value theoretically will fluctuate freely according to market demand. All Bitcoin transactions are saved publicly and permanently online.
Bitcoin has the advantage of not passing through other institutions such as banks and credit card companies, so transactions cost less than dollar-based deals. And Bitcoin decentralization makes it more appealing to people such as Underwood. He described the typical Bitcoin investor as young, male and geeky. Bitcoin also attracts entrepreneurs, and people concerned about civil liberties, banking failures and government oversight.
“The only challenge is wrapping people’s minds around the idea of a currency that is basically designed for and working through the Internet,” Underwood said. “Aside from that, it works exactly the same as cash.” King said he’s dabbled in precious metal investments, but prefers digitally handling his Bitcoin resources because it’s easier to cash out in dollars. He has saved about half a year’s earnings from a part-time job in Bitcoin and the same in silver.
“I feel much more insecure about my savings in dollars than in Bitcoin,” he said. “Every week, you hear about something crazy going on in the macroeconomic news. There’s a whole bunch of us waiting for the dollar to drop out.”
submitted by runderwo to Bitcoin [link] [comments]

An Accounting Method for a Free Market Society

I got some bad news about my health. I should be okay, but I'm worried all the work I've done will go unknown if I don't publish now. This was finished in haste. Please forgive errors, typos, glitches, and bad programming techniques.
I've designed an accounting method to be used in a free market society. In other words, one without a government regulating accounting standards.
(This system was also, and originally, designed to keep government entities transparent, but I think this is also the method needed for accounting in the free market. You can read the post how it relates to keeping government honest here.)
As you probably know, our accounting industry and standards are controlled by the government, at least in the United States, .
For the most part, it is the Securities and Exchange Commission (SEC) that gives the Financial Accounting Standards Board (FASB) legal authority to create the generally accepted accounting principles (GAAP). But even if you take out the government, accounting principles are still centrally planned by boards.
And you know that's not a good thing.
So how do we create accounting principles from the free market?

Cash Basis of Accounting > Accrual Basis of Accounting

Isn't a free market accounting system a bad idea?
Won't companies just get creative with accounting entries like Enron's mark-to-market accounting?
No, because I believe if the free market was involved, the default presentation of financial statements would be more of a cash basis rather than accrual basis accounting.
The investors and potential investors would demand it.
And with cash basis, you can't make those fictitious entries.
First, let's define our terms. Cash basis simply means we follow the cash (book an entry when cash exchanges hands).
Keep in mind, cash exchanges are often done by strong software systems you can't really cheat it (think Bitcoin). And physical cash is often strongly monitored, counted, and put under lock and key.
But accrual basis is booked when revenue or expense are incurred, but not necessarily when cash is exchanged.
For example, we bill the client for $200 for work completed so we book revenue of $200 even though we won't get the cash of $200 until next year.
This means accruals aren't usually linked to secure/encrypted software to prevent fictions entries. The accountants just book an entry when they think there needs to be one. Even if you have strong software that will only allow an entry when a bill is received or sent on a secure network system, some accrual accounting is done without billing.
For example, the accountant knows on December 31, 2015 that the company will be paying a $600,000 settlement in early 2016 for a lawsuit. There is no official billing software, but it must be shown on the financial statements to investors. Thus, the software must allow for accountants to make entries outside of a ridged, software system. And that requirement makes creating fictitious entries not only possible, but incredibly easy to do with accrual accounting.
But when you compare cash basis to accrual basis, this timing difference is often a wash especially when you look long-term. That is why we are better off just sticking to cash (at least when it comes to profits, net worth is another issue I'll talk about later).
Cash is king.
Most experienced investors go right to the cash flow statements instead of the income statements (which is on an accrual basis).
And history has shown if you base your investments on revenue instead of profit for public companies, you'll beat the market. Why? Because revenue is strongly tied to cash (accountants can't play games with them like they can on expenses).
Cash is king.
Besides with accrual accounting, there is always a chance you may not collect or have to pay. Should you really recognize the revenue or expense right away?
With cash there is almost always a third party involved, like a bank, who will keep track of things and who will hold the money.
Furthermore, on a cash basis audits will be a lot easier.
I'm a former CPA. A lot of auditors offer little to no value for businesses. The work is only done because of government mandates.
(Yes, the tax department can get a business more money, but that money comes from the taxpayer...)
So how is a free market system better?

Better than the SEC and Unbiased Auditors

Think back to the Enron example. The current system has the auditors (CPAs who are suppose to "serve the public's interest") audit the same company that is paying them money...I'm sure you can see why this is a problem. So of course Arthur Andersen would look the other way or help Enron hide things. They want their money.
However, if you privatize things and remove the SEC, the free market will solve the problem.
How? Simple, let's say a company is owned 20% by the CEO and the board and 80% by the public. The public inventors as a group would hire a private auditor (maybe the private auditor has a license/certification from a private organization to prove to investors they are a quality company). Now that the private auditor is only serving the public investors, the CEO and board will have no influence on their audit.
So when they come across things like the whole mark-to-market scandal, they'll report it to the investors without hesitation and they can get out before they lose their money.
And investors in Bernie Madoff would have hired a private auditor who would actually audit the financial statements. However, Madoff's CPA just took his word about everything. No jail time for him, because he helped with the investigation, but I think it had more to do with the fact he was a CPA. It would make the government license look bad.
Anyway, $20 billion dollars probably wouldn't have been lost. The auditor would have told them it was a Ponzi scheme and to get out.

Accrual Accounting will still be around

We still need accruals for certain things.
For example, say a construction company does a job for a city for $50,000,000 but doesn't bill the city until 5 years from now (in an attempt to keep it off the cash basis financial statements while the mayor is in office). A cash basis statement would make it seem like we don't have that large future expense.
But by separately staying the accrued expenses on the income statement (and having that information available in the financial notes), that problem is solved.
By keeping our income statement on mostly a cash basis, but separately stating our accrued expenses and revenue, we have a system that gets the best of both worlds.
Finally, our net worth number (basically, an estimate by accountants on what the company is worth) will have accrued items in it. Accruals are estimates and the net worth calculation is also an estimate. So it makes sense to keep them together.
But how will we make sure those numbers are accurate?

Let the Free Market Define Accounting Standards

With a cash basis, we are simply counting the money coming in and the money going out. It isn't rocket science and we don't need accounting standards or best practices.
However, with the accruals we do have we'll need standards for them. How do we create the standards? Let the free market decide.
If a company goes around making fake accrued revenue and using inaccurate depreciation methods to make their net worth look good (remember they can't do anything to their profits since it is all cash based), then the investors could sue the company.
And if a private auditor approves their bad methods, then they too can be sued.
The best incentive to do things right? Have their money on the line. It's simple as that.

A Demonstration

I put together a demonstration of how a modern version of financial statements would look (without the horrible government requirements and FASB regulations).
This is a very rough guide as the notes to the financial statements are not there and it is still missing many features.
It is on a cash basis for profits as I mentioned before, but the net worth is mostly on an accrual basis.
Simpel Account:
Yes, I misspelled the word "simple" on purpose. The demo is of a city, but this can obviously be used for a corporation or individual as well.
I give more details about Simpel Accounting on this post.
submitted by WhyMeAndWhyNow to Libertarian [link] [comments]

anybody that uses mt gox after they open withdrawls deserves to be robbed!

with bitcoin withdrawls being halted and fiat being unable to be withdrawn for months with a few exceptions to a lucky few Its obvious mt gox is a ponzi scheme. they only pay people there money when they get new money in to pay out. This has been a problem for many months. Mark kapeles should be in jail not CEO of an exchange. does the name bernie madoff ring a bell?
submitted by bitcoinchamp to Bitcoin [link] [comments]

How a ponzi scheme works - YouTube Lessons from history’s biggest Ponzi scheme  Diana ... BITCONNECT REGALCOIN A SCAM PONZI SCHEME Bernie Madoff The $50 Billion Ponzi Scheme - YouTube Bitcoin: Ponzi Scheme?

Bitcoin, by contrast, has no intrinsic value at all. Combine that lack of a tether to reality with the very limited extent to which bitcoin is used for anything, and you have an asset whose price ... Arbistar is accused of running a bitcoin pyramid scheme with findings suggesting $1 billion in investors’ funds cannot be accounted for. Bitcoin as a Penny Stock and Ponzi Scheme. The critic makes the following statements regarding Bitcoin as a penny stock or Ponzi scheme: “Thus, bitcoins are more like “penny stock”, shares of a company with no assets, no products, and no staff; or shares in a pure ponzi schema, like Madoff’s fund. The value of bitcoin is supposed to ... When you already have a presumption that BITCOIN is a ponzi scheme, you are eliminating half of the people who think otherwise to answer your question. Let me answer this question by trying to understand your intention in asking such a presumptuou... It is absurd to label bitcoin a Ponzi scheme. Yet that is what Jim Rickards says. Ironically, Bitcoin is an anti-Ponzi setup, regardless of what it is used for, regardless of whether or not it's ...

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How a ponzi scheme works - YouTube

Bitcoin is a Ponzi scheme! In the coming recession bitcoin will collapse as people need to get their money out to pay bills and for other expenses. The question is, do these cryptocurrency ... Subprime the Musical- Series of light-hearted podcasts designed to explain the Subprime Mortgage Crisis. To learn more visit: www.subprimethemusical.wordpres... Lo Schema Ponzi - Economia di Strada di Roberto Gorini - Duration: 4:55. ... Rickards: ‘Bitcoin is a Ponzi Scheme’ - Duration: 7:28. Hedgeye Recommended for you. 7:28. Investire in Ripple - Il ... Too Good to be True- The Rise and Fall of Bernie Madoff And His Ponzi Scheme, Part 1 - Duration: 1:00:00. Massachusetts School of Law at Andover 182,510 views. 1:00:00. ... Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube.

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