prasad1
Active member
During the late ’90s, Silicon Valley venture capitalists and New York City investment bankers used phrases such as “monetising eyeballs”, “stickiness”, and “B2C” to justify the ridiculous valuations of Internet companies. They claimed that conventional methods were inapplicable in valuing the dot-com companies — which had no revenue — because they were entering into an entirely new economy.
Believing these people and being afraid to miss out on the gold rush, small-time investors, grandma and grandpa, and barbers and taxi drivers invested their life savings in companies such as Pets.com, Webvan, and eToys. The bubble burst, and they lost everything. Through a transfer of wealth in the billions of dollars from Main Street to Wall Street, venture capitalists, unscrupulous CEOs, and bankers had effectively enriched themselves at the expense of hundreds of thousands of ordinary investors, leaving them to despair about their futures.
History is repeating itself now with Bitcoin. This time, it isn’t just Main Street US that is about to lose its shirt; it is the developing world. Technology has made it possible for hypesters in Silicon Valley, China, and New York City to fleece anyone, anywhere, who has a bank account and an Internet connection.
The story that Bitcoin victims are being sold is one in which, on the basis that we cannot trust government-issued currencies, Bitcoin is the future of money. One hypester calls Bitcoin “a gift from God to help humanity sort out the mess it has made with its money”. A PayPal director predicts that Bitcoin’s price will reach $1 million in the next five to 10 years; asset managers say it is the new gold.
This is complete nonsense. Yes, the price of Bitcoin may yet double or even quadruple — because its price is based on pure speculation, and these stories are feeding such speculation. But Bitcoins’ market price is almost certain at some point to crash and burn, just as the dot-coms did, and for the same reason: because it is all hype. And there will be no one to turn to when it does, because no government or bank is backing it; and the people who are hyping Bitcoin will have cashed out and be long gone.
http://www.hindustantimes.com/analysis/why-bitcoin-is-the-largest-ponzi-scheme-in-human-history/story-L5z56wbz3hqxl2gIrf125H.html
I have not invested in any cryptocurrency.
