The general population won't interact with the bitcoin network at all. They'll make and receive payments via payment processors.
People will have the same protection from being screwed over by those payment processors as they currently do being screwed over by Paypal. (As I understand it, that's actually not very much protection at all... yet people still use Paypal.)
I've been directed to that Wikipedia article many times, and the way it describes a Ponzi scheme as working just doesn't match up with how Bitcoin works.
Bitcoin is a payment network. To make a payment, you buy some bitcoins on an exchange, then you send them to someone, who sells them on an exchange. At the end of that, you've paid your $x and the other guy has his $x.
The Wikipedia article on Ponzi schemes describes them as being fraudulent investment operations. Payments in Bitcoin don't involve making investments (you send your bitcoin away immediately after buying it), and in any case they don't have any promise of magically giving you back more money than you put in. Given that, I don't see how you can describe it as a Ponzi scheme.
There is another significant distinction between Bitcoin and a Ponzi scheme. In a Ponzi scheme, you put money into it with the expectation of getting more money out than you put in. In Bitcoin, you don't do this -- or rather, nothing in Bitcoin will tell you that you can.
If you can point to the bit of Bitcoin that attempts to give you this expectation, then great: please do so. However, please don't point at a person pulling a scam involving Bitcoin -- that would be like pointing to Charles Ponzi to explain why the US dollar is a scam. Similarly, please don't point to all the speculators: they are essentially the same thing as Wall Street day traders, and they don't make the US dollar a scam either.
Bitcoin is a payment network. To make a payment using Bitcoin, you buy some bitcoins on an exchange, then you send them to the seller, who sells them on an exchange. Where is the scam in all this? You paid your $x, the seller got his $x. That's not a scam, that's mission accomplished.
It's actually just about stable enough, but okay... if I make an investment in a company and the company hasn't become successful yet, was I scammed? Personally, I don't think the answer to this question is "it hasn't made me money so far, so yes" -- I think the answer depends more on whether the company was scamming me or not, and just because a particular investment hasn't been profitable so far isn't enough to make it a scam. In fact, even if the investment never becomes profitable, it doesn't necessarily mean the investment was a scam, it just means the investment failed.
"It hasn't reached its goals so far" isn't enough, by itself, to make Bitcoin a scam.
It's decentralized. There's no controlling entity that can tell you who you can or cannot pay.
Another thing it allows you to do is change which company you use for payments, and yet still make payments to all the same people you could before. If you want to buy something from somebody that uses Paypal to take payments, then you're kinda stuck with using Paypal. With a Bitcoin-based system, you could pay them via a different company.
This is like asking "what's the point of SMTP when we have Gmail?"
If you said "real money" to mean bank notes or coins: yes, except not really. Giving some notes to somebody on another continent is an expensive business that involves flying over to them. I guess you could mail them through the post, but I don't see many people doing that.
Yeah, you're right, people don't have bitcoins and don't know what they are. That's how things should work; most people won't interact with bitcoins themselves, they'll do so via payment processors. For instance, these guys will take payments for you, and deposit dollars or euros into a bank account of your choice. On the customer side, the payment will be done by a similar provider who takes a credit card, bank transfer or whatever and makes the Bitcoin payment for you. Neither the customer or the merchant need to know anything about the protocol used to move money between their respective processors. This is similar to e.g. bank payments, where you can pay a bank account belonging to a different bank without knowing anything about the interbank protocol.
Are you attempting to claim that Bitcoin is a scam because there are people pulling scams with it? (In so much as "gambling on something with a volatile price" is a scam.) This is like arguing that US dollars are a scam because Charles Ponzi pulled his eponymous scam using them.
Bitcoins can actually be of any value and Bitcoin will still function just fine. The price is completely irrelevant, which means it doesn't matter if there's hype, speculation or whatever driving the price up (or down). Your $10 transaction is still a $10 transaction, whether it happened to use 10 BTC or 10 mBTC behind the scenes.
Do you really think there's no value in being able to move money around? To make payments to people who aren't in the same room as you?
If so, then I disagree; I believe that's useful. A lot of people use services to make payments online, so I don't think popular opinion is with you either.
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.
A little thought experiment: an exchange takes in $100 for 100 v-coins valued at $1 each. The v-coin value inflates to $2 and the investors decide to exchange their v-coins back to dollars... how many v-coins can be exchanged before the exchange is insolvent? HALF! DUH!
This is not how exchanges work. Exchanges operate as markets; if somebody decides to sell their v-coins, they need a buyer to sell them to (that is, another user of the exchange, not the exchange itself.) If nobody else on the exchange is willing to pay that price, then nobody goes insolvent -- the seller just has to take their v-coins to wherever the people willing to pay $2 are.
It's in 29.0. Just be aware that your data will be encrypted using the password you use to login to Sync, so ideally your password needs to have the same amount of entropy as your current sync key (meaning you'll need to get it from your existing browser anyway.)
Also, I can't quite get my head around how you can do authentication with a password, use the same password as an encryption key, and keep that key a secret from the party doing the authentication. There's a document describing the protocol here if you want to have a go at working that out.
That's such a big change in direction that I don't think it's reasonable to consider Firefox 29 the same browser as previous versions, and I don't think anybody should automatically move from one to the other.
XP x64, a Phenom II X4 at ~3 GHz, and enough memory that 32-bit Firefox can't use it all.
It's hard to do a proper comparison between my two profiles, since they have completely different tab sessions and the Nightly one has three times as many extensions enabled, but I believe current Firefox versions do use quite a bit more memory per tab than 3.6 does. They handle it far better though.
Jank is the term Mozilla uses for occasions when the browser UI locks up for noticeable periods of time. On Firefox, this is often the result of the garbage collector kicking in, but there have been major improvements in the GC since 3.6 (it runs for shorter periods of time and is interruptible, so it's a lot less noticeable.)
I have a 3-row tab bar from Tab Mix Plus, Tabhunter for finding tabs with specific titles, and an extension that colors tabs into groups when middle-clicking on links. I use BarTab to delay-load tabs (and, importantly, to unload tabs that haven't been focused for a few hours.)
Of course, the reality is that most of these tabs sit around being essentially glorified bookmarks, so I'm not really navigating them so much as just leaving them sitting scrolled off the top of the tab bar.
I have ~350 tabs in my Nightly install and it's not unstable at all. Heck, I have 1400 tabs open in my main Firefox 3.6 install, and managed to get it to 2400 recently, and it's not crashy either. Admittedly it's a bit janky due to the garbage collector (which has improved massively since 3.6), but what do you expect with 2400 tabs open? Firefox does not appear to be inherently crashy with many tabs.
If you're seeing crashes, please post some of your own crash reports so we can see if there's any obvious common cause in them. The overall crashes per ADI reports don't tell us much about how crashy Firefox is compared to other software, without also having similar reports from other software to compare with.
Yep. It's a payment network. It doesn't need to satisfy the requirements for real money, it just needs to satisfy the requirements for making payments.
How would you feel about a "Bitcoin wallet" site that stored your balance in USD? With the actual funds being held in a Bank of America or HSBC or whatever bank account?
It doesn't exist in a lot of other cases either. Paypal is my usual example, but there's other similar cases. Games with microtransactions perhaps, or active DRM like Microsoft's PlaysForSure. The company can screw you over in all of these cases too.
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The general population won't interact with the bitcoin network at all. They'll make and receive payments via payment processors.
People will have the same protection from being screwed over by those payment processors as they currently do being screwed over by Paypal. (As I understand it, that's actually not very much protection at all... yet people still use Paypal.)
I've been directed to that Wikipedia article many times, and the way it describes a Ponzi scheme as working just doesn't match up with how Bitcoin works.
Bitcoin is a payment network. To make a payment, you buy some bitcoins on an exchange, then you send them to someone, who sells them on an exchange. At the end of that, you've paid your $x and the other guy has his $x.
The Wikipedia article on Ponzi schemes describes them as being fraudulent investment operations. Payments in Bitcoin don't involve making investments (you send your bitcoin away immediately after buying it), and in any case they don't have any promise of magically giving you back more money than you put in. Given that, I don't see how you can describe it as a Ponzi scheme.
There is another significant distinction between Bitcoin and a Ponzi scheme. In a Ponzi scheme, you put money into it with the expectation of getting more money out than you put in. In Bitcoin, you don't do this -- or rather, nothing in Bitcoin will tell you that you can.
If you can point to the bit of Bitcoin that attempts to give you this expectation, then great: please do so. However, please don't point at a person pulling a scam involving Bitcoin -- that would be like pointing to Charles Ponzi to explain why the US dollar is a scam. Similarly, please don't point to all the speculators: they are essentially the same thing as Wall Street day traders, and they don't make the US dollar a scam either.
Bitcoin is a payment network. To make a payment using Bitcoin, you buy some bitcoins on an exchange, then you send them to the seller, who sells them on an exchange. Where is the scam in all this? You paid your $x, the seller got his $x. That's not a scam, that's mission accomplished.
It's actually just about stable enough, but okay... if I make an investment in a company and the company hasn't become successful yet, was I scammed? Personally, I don't think the answer to this question is "it hasn't made me money so far, so yes" -- I think the answer depends more on whether the company was scamming me or not, and just because a particular investment hasn't been profitable so far isn't enough to make it a scam. In fact, even if the investment never becomes profitable, it doesn't necessarily mean the investment was a scam, it just means the investment failed.
"It hasn't reached its goals so far" isn't enough, by itself, to make Bitcoin a scam.
It's decentralized. There's no controlling entity that can tell you who you can or cannot pay.
Another thing it allows you to do is change which company you use for payments, and yet still make payments to all the same people you could before. If you want to buy something from somebody that uses Paypal to take payments, then you're kinda stuck with using Paypal. With a Bitcoin-based system, you could pay them via a different company.
This is like asking "what's the point of SMTP when we have Gmail?"
If you said "real money" to mean bank notes or coins: yes, except not really. Giving some notes to somebody on another continent is an expensive business that involves flying over to them. I guess you could mail them through the post, but I don't see many people doing that.
Yeah, you're right, people don't have bitcoins and don't know what they are. That's how things should work; most people won't interact with bitcoins themselves, they'll do so via payment processors. For instance, these guys will take payments for you, and deposit dollars or euros into a bank account of your choice. On the customer side, the payment will be done by a similar provider who takes a credit card, bank transfer or whatever and makes the Bitcoin payment for you. Neither the customer or the merchant need to know anything about the protocol used to move money between their respective processors. This is similar to e.g. bank payments, where you can pay a bank account belonging to a different bank without knowing anything about the interbank protocol.
Are you attempting to claim that Bitcoin is a scam because there are people pulling scams with it? (In so much as "gambling on something with a volatile price" is a scam.) This is like arguing that US dollars are a scam because Charles Ponzi pulled his eponymous scam using them.
Bitcoins can actually be of any value and Bitcoin will still function just fine. The price is completely irrelevant, which means it doesn't matter if there's hype, speculation or whatever driving the price up (or down). Your $10 transaction is still a $10 transaction, whether it happened to use 10 BTC or 10 mBTC behind the scenes.
Do you really think there's no value in being able to move money around? To make payments to people who aren't in the same room as you?
If so, then I disagree; I believe that's useful. A lot of people use services to make payments online, so I don't think popular opinion is with you either.
Not if it's not wrong -- and nobody who has ever said that to me has been able to explain why it was wrong.
Maybe you'll be the first. Can you explain why that FAQ entry is wrong, and explain what it is about Bitcoin that makes it a Ponzi scheme?
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.
This is not how exchanges work. Exchanges operate as markets; if somebody decides to sell their v-coins, they need a buyer to sell them to (that is, another user of the exchange, not the exchange itself.) If nobody else on the exchange is willing to pay that price, then nobody goes insolvent -- the seller just has to take their v-coins to wherever the people willing to pay $2 are.
It's in 29.0. Just be aware that your data will be encrypted using the password you use to login to Sync, so ideally your password needs to have the same amount of entropy as your current sync key (meaning you'll need to get it from your existing browser anyway.)
Also, I can't quite get my head around how you can do authentication with a password, use the same password as an encryption key, and keep that key a secret from the party doing the authentication. There's a document describing the protocol here if you want to have a go at working that out.
They were both announced at the same games conference.
As covered on Slashdot previously: Australis is landing. If you read the official blog post you'll get the impression that this is all about improvements, but if you pay a bit more attention you'll see it's actually more about removing most of the in-browser customizability.
That's such a big change in direction that I don't think it's reasonable to consider Firefox 29 the same browser as previous versions, and I don't think anybody should automatically move from one to the other.
If you currently have automatic updates on, this release of Firefox is the one where you probably want to turn them off.
XP x64, a Phenom II X4 at ~3 GHz, and enough memory that 32-bit Firefox can't use it all.
It's hard to do a proper comparison between my two profiles, since they have completely different tab sessions and the Nightly one has three times as many extensions enabled, but I believe current Firefox versions do use quite a bit more memory per tab than 3.6 does. They handle it far better though.
Jank is the term Mozilla uses for occasions when the browser UI locks up for noticeable periods of time. On Firefox, this is often the result of the garbage collector kicking in, but there have been major improvements in the GC since 3.6 (it runs for shorter periods of time and is interruptible, so it's a lot less noticeable.)
I have a 3-row tab bar from Tab Mix Plus, Tabhunter for finding tabs with specific titles, and an extension that colors tabs into groups when middle-clicking on links. I use BarTab to delay-load tabs (and, importantly, to unload tabs that haven't been focused for a few hours.)
Of course, the reality is that most of these tabs sit around being essentially glorified bookmarks, so I'm not really navigating them so much as just leaving them sitting scrolled off the top of the tab bar.
I don't, I'm just really, really lazy about closing them. Firefox copes with it just fine, so there's no pressing need to.
I have ~350 tabs in my Nightly install and it's not unstable at all. Heck, I have 1400 tabs open in my main Firefox 3.6 install, and managed to get it to 2400 recently, and it's not crashy either. Admittedly it's a bit janky due to the garbage collector (which has improved massively since 3.6), but what do you expect with 2400 tabs open? Firefox does not appear to be inherently crashy with many tabs.
If you're seeing crashes, please post some of your own crash reports so we can see if there's any obvious common cause in them. The overall crashes per ADI reports don't tell us much about how crashy Firefox is compared to other software, without also having similar reports from other software to compare with.
Yep. It's a payment network. It doesn't need to satisfy the requirements for real money, it just needs to satisfy the requirements for making payments.
Case in point, Mt Gox also lost a significant amount of USD balances. Apparently the regulation surrounding the dollar didn't actually help much.
How would you feel about a "Bitcoin wallet" site that stored your balance in USD? With the actual funds being held in a Bank of America or HSBC or whatever bank account?
Paypal isn't covered by FDIC insurance either.
Do you refuse to touch them too?
It doesn't exist in a lot of other cases either. Paypal is my usual example, but there's other similar cases. Games with microtransactions perhaps, or active DRM like Microsoft's PlaysForSure. The company can screw you over in all of these cases too.
Yet people still use them.
What stops any company from doing this?