Bitcoin is a Ponzi scheme—the Internet’s favorite currency will collapse.
Slate – –
An even more fundamental problem with bitcoins, and indeed any private currency, is that there is no way to limit its supply. True, bitcoins cannot be manufactured beyond the limits set by Nakamoto. But there is no way to prevent future Nakamotos from creating bitcoin substitutes—say, bytecoin, or botcoin. If merchants are willing to accept bitcoins, they will be willing to accept the substitutes, especially as bitcoins become scarce and consumers scramble for substitutes. Nakamoto must have realized this because there are not enough bitcoins to substitute for the currencies around the world. The currency can only succeed if it is expanded or supplemented. But if there are no constraints on substitute digital currencies—and there aren’t—then the value of bitcoins will plummet as the subs begin to circulate. And once it becomes clear that there is no limit, people will realize that their holdings could become worthless at any moment, and demand for bitcoins and the other currencies will collapse, ending the experiment. Go to story
Bullion and Bandits: The Improbable Rise and Fall of E-Gold
Wired – KIM ZETTER – Jun 6, 2009
As Jackson envisioned it, E-Gold was a private, international currency that would circulate independent of government controls, and stand impervious to the market’s highs and lows. Brimming with evangelical enthusiasm, Jackson proclaimed it a cure for the modern monetary system’s ills and described it at one point as “an epochal change in human destiny” and “probably the greatest benefit to humanity that’s ever been thought of.” Go to story
excerpt from garden conversation, New Vrindaban, June 28, 1976:
PRABHUPADA: Gresham’s theory: “Bad money drives away good money.” You know this? This is a economic theory. “Bad money drives away good money.” Because nowadays bad money, that paper money, is going on, that gold coins no more in existence. Formerly we have seen gold coins in our childhood. You have not seen any. We have seen.
PUSTA KRSNA: Collector’s items.
PRABHUPADA: Huh?
PUSTA KRSNA: Collector’s items.
PRABHUPADA: Collector’s?
PUSTA KRSNA: Only someone may have one just as a collection. You can’t get them.
PRABHUPADA: Formerly in the currency, when you go to take some exchange, it was the etiquette of the teller to ask you, “What you want, silver money, gold money or paper money?” It was their duty. If you say “I want gold money,” they will pay in gold money. Not only it is written in the paper, “I promise to pay,” but the promise was kept. If he wants, “Give me payment in gold,” they will pay. And now, to keep gold, hoarding gold, is illegal. So you cannot ask. This is going on, legalized cheating. You have to accept this paper money. That’s all. Don’t ask for gold. And there is no honesty at all. I can take paper money for my convenience sake, but how you can force me to take paper money? That is not honesty. So dishonesty begins from the government. You cannot keep gold. If you have kept gold, there will be searching, and if it is found that you have gold, you’ll be punished. In India it is now being done. There is no freedom even at your home, in your private life. Formerly, any common man could keep gold according to his desire. There was no such thing. Sometimes he would hide it even within the ground, because there was no bank. At least in India this was the practice. If you have got some gold, you keep it somewhere confidential within the ground so that it may not be stolen. So everyone should have right to keep his money as he likes. Why government should interfere? Therefore you see the Bhāgavatam, rājanyaiḥ-dasyu-dharmānaḥ: The government men will be like rogues and thieves. By law they will take away. It is now going on in India. I think here it is also? You cannot keep gold. Why I cannot keep gold? If I have secured gold, I can keep it. I want gold. You write, “I promise to pay,” so there must be gold coins. I must have. So many difficulties will come in the kingdom of māyā gradually. It is already come.
