How Bitcoin is a Scam

how bitcoin is a scam
Bitcoin

When I published that article, that was over a year ago, Bitcoin was rocking. However, there have been several disturbing and alarming facts that actually forced me to write this How Bitcoin is a Scam article. Unfortunately, it looks like all this is actually a fact and the huge Bitcoin price drop is proof of what the markets think about Bitcoin.

Bitcoin is on a roll right now. Its price has been breaking one record after the other. However, there is a question. Is Bitcoin a Scam and How Bitcoin is a Scam? Will bitcoin’s price plummet and when this is going to happen?

In this article, my aim is to answer all these questions by telling you the truth about bitcoin, and frankly, I do not care whether you like it or not, I feel it is my duty to let my audience know what I’ve discovered during my research.

I’ve always been sympathetic towards bitcoin and other altcoins. In fact, I think there must be something that could stop governments and central banks manipulate monetary policy. Bitcoin seemed that it could actually take that role and become the alternative currency-asset, that protects the ordinary folk from government and central bank reckless monetary policies.

After the latest bitcoin price surge, I decided to investigate bitcoin and find out whether bitcoin is actually worth all the hype and expectation or not. Here is what I’ve discovered.

Bitcoin has Old Outdated Blockchain Technology

Bitcoin is the oldest cryptocurrency. At the time it was developed the technology behind it was breathtaking. It is a first-generation technology cryptocurrency.

how bitcoin is a scam
Blockchain

Nonetheless, bitcoin’s first-generation technology compared to other crypto’s second and third-generation altcoin technology makes bitcoin stone-age crypto. Bitcoin can only handle transactions from one crypto wallet to another and that’s it. Bitcoin needs to innovate again otherwise it will be taken over by third-generation advanced altcoins.

Third-generation altcoins have addressed the famous Trilemma blockchain problem. The concept behind it is to improve scalability without suffering security and decentralization.

Bitcoin’s Huge Transaction Costs

The transaction costs behind bitcoin are enormous. At the moment the fee for a bitcoin transaction is $24,26. The result of this is that bitcoin is totally unsuited for everyday retail transactions. In addition, the proof of work technology does not allow more than five transactions per second whereas the visa network allows more than 24000 transactions per second.

Regardless of the huge transaction costs bitcoin is not a scalable means of payment for goods and services. It is mainly used for speculation and buying other cryptocurrencies. It is a self-service system.

Some argue that bitcoin is actually suited for the transfer of large amounts of money from one country to another. These types of transactions are under constant surveillance from authorities to stop tax evaders, human traffickers, criminals, and drug dealers from transferring large sums of money from one country to another.

There is a crackdown on these types of transactions and there is going to be a similar crackdown on international cryptocurrency transactions.

Bitcoin and Other Cryptocurrencies Are Not Assets

Investment assets like stocks, bonds, real estate, and so on, will give you income, dividends, rent, interest, and so on. Some of them will also provide a use. For example, commercial real estate will give you housing services.

how bitcoin is a scam
Commercial Real Estate

Gold and other precious metals, do not give you an income but they have a use either in the industry, jewelry, monetary use, and store of value.

Bitcoin has no use, no income, and no utility. It is a pure speculative self-fulfilling bubble on price appreciation. They call it an asset but it does not have any of the features assets have. Additionally, it is not a currency because it cannot be used as currency. It is a self-fulfilling bubble with zero intrinsic value.

Bitcoin’s Unsustainable Energy Consumption

In order for the bitcoin network to deal with the everyday transactions and carry on the mining process, the amount of energy it consumes is equivalent to the energy Argentina consumes.

The whole mining process where a number of miners compete against each other with one of them winning the task of verifying the transaction which is an inefficient process that gets put in a ledger to be shared with the bitcoin computer network. This is an inefficient way to verify transactions.

how bitcoin is a scam
Pollution

In a normal financial system, there is a small number of individuals or institutions (banks, and so on) whose job is to validate, verify, transactions and make sure there is no double-spending.

If we take into account the huge energy consumption, and the inefficient transaction-mining process and add the carbon tax to it then, bitcoin’s value should be well below zero.

Bitcoin Price Manipulation

Unfortunately, there has been an orchestrated bitcoin price manipulation operation. There have been allegations for pump and dump groups on Telegram who are pumping and dumping the price of it.

We are also aware of the tether issuance which has been bringing a billion dollars into bitcoin almost every single day money coming out of nowhere. Sadly, it looks like tether has been used to buy bitcoin, and of course, all this is not backed by anything.

How Bitcoin is a Scam

Furthermore, there is evidence for spoof trading, wash trading, and front running trading or tailgating. Right now there are several investigations undergoing on whether there has been price manipulation.

The Abundance of Money and the Effect on Bitcoin

With negative interest rates and non-stop money-printing, there has been an abundance of money. The reality is that the financial system has been flooded with money. All that money went to the stock market and cryptocurrencies. Yes, the never-ending money-printing by the Fed helped the creation of the bitcoin bubble. Nonetheless, right now there is a shortage of money affecting bitcoin.

how bitcoin is a scam
Dollars

Bitcoin is not a Decentralized Currency

This is another of the bitcoin myths. The reality is that 70% of bitcoin mining is done by six mining firms based in Russia, Belarus, and China. This is an oligopoly. Russia, Belarus, and China are three countries where there is no rule of law and they are all strategic rivals to the United States.

This is not decentralization. True decentralization should apply to all bitcoin operations. Decentralization in mining, in exchanges, in wealth, and in development. The vast majority of bitcoin wealth is concentrated on a very small number of people-companies. I call it the bitcoin oligarchy.

Sadly bitcoin has become a highly centralized system with a very small number of people owning it, controlling it, and manipulating it. All that goes on in countries where there is no rule of law.

What Bitcoin is, or What Bitcoin is Not

Bitcoin is not a currency, it is not a unit of account, it is not a scalable means of payment, it is not seen as a numeral, it is not a stable store of value and it is certainly not a hedge against risk. Some people still argue bitcoin is a hedge against risk. We did not see that during February and March last year when we had the collapse of global equity by 30% and 40%. At that time bitcoin went down 50% and other cryptocurrencies 60%.

The Ripple XRP Cryptocurrency Scam

A month ago Ripple, its chairman, and CEO were all sued by the US Securities and Exchange Commission. Allegedly they illegally marketed and sold securities worth $1,3 billion. According to SEC Ripple raised capital by selling XRP in an unregistered securities offering. In addition, Coinbase was also sued because knowingly sold XRP as unregistered security and on top of that gained commissions on these sales.

how bitcoin is a scam
Ripple

The Bitcoin Bubble

The bitcoin bubble is set to explode and many assets will suffer a big blow. There is going to be a bloodbath. This is because bitcoin’s market capitalization is over $1,4 billion dollars. Back in 2018 during bitcoin’s previous collapse, from $20,000 to $3,000 bitcoin’s market capitalization was only at around $200 million.

Final Words

I’ve always been sympathetic to Bitcoin. I thought it could become an alternative to fiat currency and change global payments forever. In the past bitcoin was the holy grail of cryptocurrencies, the number one. If bitcoin collapses and if the ongoing investigations find price manipulation, and it looks like it will, I do not think bitcoin will be able to recover again. What could also happen is that bitcoin might take the whole cryptocurrency industry down.

Cryptocurrency Market News – Unstoppable Altcoin Rally

Cryptocurrency Market News - Unstoppable Altcoin Rally
Cryptocurrencies

The latest cryptocurrency market news is very exciting indeed. We are actually witnessing an unstoppable altcoin rally. No matter what Bitcoin is actually doing, (right now is just below the $1,2000 mark +2,42%) it seems more and more like the cryptocurrency may be in the midst, of what could become an extended “alt season”: a period in which altcoins outperform Bitcoin in terms of price.

For example, Tezos, Cardano, Stellar, LEND, ChainLink, Ethereum, Kyber Network, Compound, and so on, are some of the many cryptos that had a magnificent performance.

Reasons for the Altcoin Price Rally

  1. There is a positive sentiment around alternative cryptocurrencies. The outlook and the prospects for the future in altcoins never looked better.
  2. There is also a massive demand for decentralized finance-related tokens. The crypto market is expanding rapidly with more and more money pumped in.
  3. There is also a large number of new investors coming into the crypto market. People who weren’t interested and even treated the crypto market with skepticism, are now keen to take the plunge and invest.

Ethereum Rally Benefits Altcoins

The current Ethereum rally has and will benefit altcoins. Most analysts expect the Ethereum rally to continue well into the third quarter of 2020.

Ethereum options data suggests traders are expecting the crypto to get over the $400 mark.

The Ethereum options open interest increased by 5 fold over the past 3 months to reach $337 million. Options are a sign of what professional traders expect to take place on the market. Professional traders invest big and their impact on the market is always significant.

In addition, futures contracts also favor a bullish Ethereum. A bullish market will display the base of a future at or below 5%. Right now the ETH futures annualized basis, has been sustaining levels above the 10% for the past. That means Ethereum is at a very bullish momentum.

As a result, investor’s confidence is soaring and we are seeing the results.

Altcoin’s Rally is Backed by Data

  1. The FTX exchange’s index of 50 low capitalization cryptocurrencies, the so-called shitcoin index, is up 111% this year.
  2. According to Binance Futures, data investors are holding long contracts. As a matter of fact, over 50% of traders are holding long contracts on LINK, ADA, KNC, and COMP.
  3. As stated by CoinMarketCap, the overall cryptocurrency market now stands roughly at $295 billion. Bitcoin dominates the index at 60,5%.

Top Performing AltcoinsCryptocurrency Market News - Unstoppable Altcoin Rally

  • Aave’s LEND token has increased by over $1,200% so far this year, due to a huge increase in usage since the launch of the main net this year. I think this will be the token with the highest returns so far.
  • Another example of another token that has seen extraordinary gains is ChainLink. LINK’s price started climbing at a rather steady rate since March however, LINK’s bull run started in July. Right now LINK sells at $14,17, a 517% increase since the beginning of the year. Last thirty days performance had a monthly increase of 131%
  • Cardano, ADA, saw a 30% price increase during the last thirty days. Cardano has seen its price triple in the last three months from $0,047 to $0,14.
  • Kyber Network, KNC, had an increase in its price from $1,35 to $1,71 in just seven days and it has also tippled its price in the last three months. From $0,56 to $1,71 right now.
  • Compound, COMP, started trading at $129,51 and within seven days went to $177,50. That was a 39% increase. In the last thirty days, Compound gained over 80% from $94,51 to $177,50.
  • Tezos, XTZ, had a seven-day price increase by 26% from $2,97 to $3,63. In 90 days Tezos went from $2,57, to $3,63, a total increase in value of 43%.
  • Stellar, XLM, had a 2,3% price increase in the last week and in the last 90 days saw gains over 40%
  • Zcash, ZEC, had a magnificent seven-day run with gains over 11% and total 90-day gains of 124%. It went from $42,37 to $94,00

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Final Words

The Altcoins outlook is excellent. More people are interested in altcoins now and as a result demand for cryptos is neverending. All these combined with the positive sentiment, are a good recipe for more altcoin gains.

As we see altcoins can offer high returns but they are volatile. One day they are breaking one record after another and the next day, they could suffer unprecedented losses. If you are thinking of investing there, the best will be to invest money you can afford to lose.

Disclaimer: The author has no money invested in cryptocurrencies whatsoever.

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Famous Crypto Owners

Famous Crypto Owners

Famous Crypto Owners
Cryptocurrencies

As Bitcoin and altcoins in general turning into a booming industry, it comes as no surprise when many celebrities and billionaires, with disposable income, have chosen cryptocurrencies to invest. Successful businessman, famous actors, politicians, and even musicians are proud crypto owners.

Bill Gates

Famous Crypto Owners

Bill Gates is no stranger to all of us. He is an American businessman, computer programmer and philanthropist. He is the co-founder of Microsoft. He is one of the most well-known Bitcoin invested public figures in the world.

Madonna

Famous Crypto Owners

Madonna is known as “the queen of pop” and rightly so. She needs no further introduction. Madonna is one of many public figures spreading the word about how easy and secure cryptocurrency is as a payment method.

Sir Richard Branson

Famous Crypto Owners

Sir Richard Branson is a British business magnate, author, and philanthropist. He founded the Virgin group. His net worth is over $5.1 billion and he is a Bitcoin advocate and investor.

Peter Andreas Thiel

Famous Crypto Owners

Peter Thiel is a German-American entrepreneur. He is the founder of Pay Pal, Palantir Technologies and so on. His net worth is $2.3 billion and he has over $20 million invested in cryptos.

Lionel Messi

Famous Crypto Owners

Messi is a well-known Argentinian and Barcelona football player. Messi became a brand ambassador for Israeli company Sirin Labs in 2017. Sirin Labs is producing the world’s first crypto smartphone and the footballer is backing it.

Gwyneth Paltrow

Famous Crypto Owners

The American actress and singer is a well-known crypto advocate, in fact, she was the face of the Bitcoin wallet, Abra.

Michael Novogratz

Famous Crypto Owners

Michael Novogratz is an American ex-hedge fund manager of the Fortress Investment Group. Currently, his investment in Bitcoin and Ethereum is worth $250 million. He is a long-standing advocate for cryptocurrency investment.

Floyd Mayweather

Famous Crypto Owners

Floyd Mayweather jr. the boxing legend does not need an introduction. He has promoted several ICOs including Stox, Hubii Network, and Centra. Mayweather is well known for using Bitcoin, Ethereum, and other cryptos for his everyday purchases.

Tim Draper

Famous Crypto Owners

Timothy Draper is an American venture capital investor and founder of the Draper Fisher Jurvetson (DFJ) His net worth is 1 billion dollars. Draper is a Bitcoin enthusiastic advocate and investor.

Bjork

Famous Crypto Owners

Bjork is a musician and singer from Iceland. In 2017 Bjork encouraged fans to buy her new album with Bitcoin. According to reports she accepted Bitcoin, Litecoin, Dashcoin, and AudioCoin as payment.

Eric Schmidt

Famous Crypto Owners

Eric Schmidt is an American businessman and a software engineer. He is known to be the CEO of Google from 2001 to 2011. His net worth is 14,3 billion. He is another cryptocurrency investor and advocate.

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