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Cryptocurrency Exchange Vircurex To Freeze Customer Accounts
Powercntrl (458442) writes "Vircurex, an online exchange for Bitcoin as well as other cryptocurrencies is freezing customer accounts as it battles insolvency. While opinions differ on whether cryptocurrency is the future of cash, a Dutch tulip bubble, a Ponzi scheme, or some varying mixture of all three, the news of yet another exchange in turmoil does not bode well for those banking on the success of Bitcoin or its altcoin brethren, such as Litecoin and Dogecoin."
Vicurex is tiny. They only did US$30,822 of business in the past 30 days. The corner pawnbroker is probably a bigger business. The corner gas station definitely is.
Bitcoin may be a future currency (though I doubt it is The Future of Currency). It may be a very bad high risk investment (though calling it a Ponzi scheme would be giving the players far too much credit). Whichever it is, or wherever in between, it is no more or less what it was in the (nearly imperceptible) wake of Vicurex's failure.
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Copied and pasted from the Bitcoin FAQ, since the site seems to be broken at the moment:
Is Bitcoin a Ponzi scheme?
In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.
A ponzi scheme is a zero sum game. Early adopters can only profit at the expense of late adopters. Bitcoin has possible win-win outcomes. Early adopters profit from the rise in value. Late adopters, and indeed, society as a whole, benefit from the usefulness of a stable, fast, inexpensive, and widely accepted p2p currency.
The fact that early adopters benefit more doesn't alone make anything a Ponzi scheme. All good investments in successful companies have this quality.
Short selling.. it is a scam especially 'naked' shots - where you bet on the price before you have the contracts in place.
The idea of a "naked" short doesn't really exist. You have a standing contract with your broker. You don't "create" shares when you sell short, you borrow them from your broker on margin. And, if your broker doesn't consider your position solid enough, they can demand you cover the short at any time.
Short selling has a stigma of negativity around it, but keep in mind that once a company issues stock, it makes little difference what actually happens to that stock on the short term (beyond those few investors who own enough of it to actually have a real voice in shareholder voting). Yes, a short position bets against a company - But that company doesn't win or lose either way. Neither does the lender of the stock you short. Short selling merely serves to increase liquidity of a security that would otherwise have remained uselessly tied up in someone else's portfolio.
Oh, and they still skim 10% off, and they're still old white guys in charge of the exchanges.
Do you have any idea what you talk about here? Who skims 10% off, and how? To give you an idea of the reality of the situation, I reallocated a sizeable chunk of my IRA two weeks ago. "They", including all aggregate parties who could possibly count as "them", skimmed a total of 0.0391% ($7 trade and $0.04 bid/ask spread) from the transaction. Wow, those evil old white bastards! It'll take me at least two hours of my average expected return to cover that!