Ponzi schemes shut down.

[Tommy T.]

2 minutes ago, earthdome said:

With the caveat to only invest money you can afford to lose, the price of bitcoin got down to $3150 USD last Nov 2018 and within the last month was back up to $14,000 USD. Currently trading at $9900. So you could have made a tidy profit.

Very true... but you could have also lost your shirt if you invested to "not miss out" when it was just at $14k +.

Sadly, I keep hearing about all sorts of scams/schemes to "get rich quick," "earn" 30% interest in just a couple of years. For me it's exactly as you say - invest only what you can afford to lose. And also, if it looks too good to be true, it is. Same advice over and over again. I hope somebody benefits from that.

[earthdome]

38 minutes ago, Tommy T. said:

Very true... but you could have also lost your shirt if you invested to "not miss out" when it was just at $14k +.

Sadly, I keep hearing about all sorts of scams/schemes to "get rich quick," "earn" 30% interest in just a couple of years. For me it's exactly as you say - invest only what you can afford to lose. And also, if it looks too good to be true, it is. Same advice over and over again. I hope somebody benefits from that.

Of course you should do your due diligence and understand what you are investing in. With regards to crypto as a techie, computer programmer, etc. I understand the technology but also understand how volatile the price can be on such a speculative asset. At 10 years old it has matured a great deal more than the early adopters thought it would. There now are a growing number of investment firms who are hedging their bets by obtaining small positions in bitcoin and some of the better established 'alt coins' as they are called.

[Dave Hounddriver]

I agree that Bitcoin is speculative, but I don't see it as a Ponzi scheme since it has undergone the test of time.

A person should definitely keep their money in a currency issued by a government, am I right?  Take the Argentinian Peso for example.  Ummm, no that's a bad one.  How about going with a more stable country like Germany or USA.  That works unless you are buying Papiermarks or Confederate dollars.  Hmmm.  I guess all currencies can fail under the right circumstances. Even the price of gold could be a Ponzi scheme as it depends on being able to sell it to the next person to get your cash back.  I believe the lesson that history is teaching us is that there is no guaranteed investment or currency.  There are only degrees of security.  A Ponzi scheme is about a 1 on a scale of 1 to 10 rating security of your money.  The reason it gets a 1 is that some people actually get their money back.  A work buddy of mine from 20 years ago is a rich S.O.B. today and he got his start buying into a stock swindle when it first started and getting out when he had 1000 % return.  He was smart enough to know it was to good to be true.

[Tommy T.]

1 hour ago, Dave Hounddriver said:

I agree that Bitcoin is speculative, but I don't see it as a Ponzi scheme since it has undergone the test of time.

 

Bitcoin is definitely not a Ponzi scheme. It is not an investment vehicle at all in theory - it has just been speculative because of some investors seeing an opportunity for possible growth. The earlier problem with Bitcoin (I think it's safer now) was that some enterprising hackers jazzed the system and stole Bitcoins from  a few sites that worked with them. Ponzi scheme relies 100% on new "investors" or it will collapse. And they all collapse because there in not an infinite number of suckers....I mean investors.

1 hour ago, Dave Hounddriver said:

A Ponzi scheme is about a 1 on a scale of 1 to 10 rating security of your money.  The reason it gets a 1 is that some people actually get their money back.  A work buddy of mine from 20 years ago is a rich S.O.B. today and he got his start buying into a stock swindle when it first started and getting out when he had 1000 % return.  He was smart enough to know it was to good to be true.

You are very right... all investments carry degrees of risk.

And that's the problem here in P.I.. L tells me that no, she does not believe in nor will invest anything in these schemes/scams. However she tells me there are those, like your buddy, who got in early when one was new and made out like bandits. Then they told their "friends" about it and thereby perpetuated it.

It's like the my co-worker many years ago crowing about investing in silver when the Hunt brothers were manipulating the market... He got in late, maybe made a little money at first, then the bottom dropped out. He got very quiet then...

It seems to always be the poorest who are targeted and, unfortunately, only a few of them are smart enough to either get out or not invest more than once, get the bonus cash out and let the original continue so they have not lost anything and have a chance to gain. And, when your tricycle or taxi driver or brother-in-law is telling you about this fantastic investment plan? Run for the hills!!! It's way too late when everyone is talking about their secret investment - more advice that bears repeating...

If you want a fascinating read, there is a book about the original Ponzi man and scheme... He actually did it twice and was caught twice, yet was going to try again, but failed...

Edited July 26, 2019 by Tommy T.

[Tommy T.]

I should add that Bitcoin, by definition has a limited quantity right from the initial design. There will only ever be a certain number (I am too lazy right now to look that number up) ever available. That, in itself, makes it possibly speculative, but totally unlike Ponzi schemes. As so many other things, we may not know the true outcome of this - and other crypto currencies until far into the future... It will certainly be interesting to observe...

[hk blues]

4 hours ago, earthdome said:

With the caveat to only invest money you can afford to lose...

I know this is often said, but I don't really think it's realistic - people tend to invest to increase their income/capital and not many can afford to lose it

[Tommy T.]

10 minutes ago, hk blues said:

I know this is often said, but I don't really think it's realistic - people tend to invest to increase their income/capital and not many can afford to lose it

Maybe I can respond with another thought that I was taught years ago? It was suggested to me - and I read this often too - that it is better to invest in yourself than any outside investment. Again... this won't work for everyone, but it certainly worked for me. Start your own small business perhaps. I see that a lot here now with so many flogging things on FaceBook, for example. It's maybe a start?

Responding directly to your comment though, hk, I think it is a realistic caution for unsophisticated people who are looking to make a lot of quick, easy money. Here, even 1k pesos is a lot considering that is more than many make in a day. So I think, for example, if someone has 5k in a bank account or under their mattress, then maybe trying their luck with 1k might be reasonable risk? Then they don't lose all. At least that is my thinking on this. Does that make sense?

[robert k]

I don't like the way the bitcoin exchanges handled the situation after they were hacked. Taking a little from everyone's account, doing it before letting anyone know they were doing it. That's something a government might do? I thought bitcoin was supposed to be different than government currency? Who's to say they won't double the maximum permissible amount of bitcoin in the future?

[Jack Peterson]

5 minutes ago, Tommy T. said:

unsophisticated people who are looking to make a lot of quick, easy money.

 Tom you may remember that early on in this Topic I told of a consortium of Coworkers of my Wife Paid in a Little over 1 Million pesos to the Kapa issue and now Bank Accounts are closed they are never going to get any return, Thing is, that 4, of the 8 concerned have really over stretched themselves in Investing, ( if you can call it that) that foreclosures notices have been issued as they are so far behind that there was no hope of Recovery, To a large degree, I can (said with tongue in cheek) understand the aforementioned unsophisticated and again to a degree Partially Educated or uneducated people  Doing the wrong thing BUT Educated and prime Job holders getting caught out with their trousers down, Unbelievable  

[Tommy T.]

7 minutes ago, robert k said:

Who's to say they won't double the maximum permissible amount of bitcoin in the future?

Exactly! That is why it is a bit scary since it is totally unregulated. But, having said that... look what government regulations seem to do... That's as far as I will go talking politics here...