Defining Fraud - The Strange Case of Nakamoto's Bitcoin - Part 1

[SalBayat]

Hi everyone,

I have written an article about Bitcoin (and crypto) from the perspective of investment fraud. It may be of some small use to the community in helping to explain why crypto systems should be banned. I would very much appreciate any insight or criticism you may have.

In summary, Bitcoin and all of crypto amount to a form of investment fraud. However, they are not a type of fraud which we have seen before, they are a new and much more potent fraud, which I refer to as a Nakamoto Scheme. There are four (so far identified) key characteristics that make the Nakamoto scheme unique. These characteristics originate from Nakamoto's use of a corrupted (one might say inverted) form of proof-of-work, in short, the technology itself is rotten.

If our goal is to combat harmful technology, then I argue that we should describe Bitcoin (and crypto/web) for what it is, a new, and very harmful, form of investment fraud.

https://salbayat.org/the-strange-case-of-nakamotos-bitcoin/

A very large thanks to @rufuspollock for prompting thoughts about ponzi schemes, crytpo, and Bitcoin, and @sdiehl for being encouraging, extremely helpful, and inclusive.

I ended up writing part 2 of this article first, but as I used some economic modelling to look at Bitcoin's electricity usage, I thought this might be of more interest to the community. I will release part 2 in the coming weeks, it addresses the shared characteristics that appear in forms of investment fraud such as Ponzi, pyramid, and Nakamoto schemes.

Regards,

Sal