I am struggling to understand whether Bitcoin is a scam and what this means. A conversation with an East African colleague provided me with a bit of a pointer:
When my colleague was a boy, a stranger arrived in his village and offered the villagers $20 for every chameleon they could find. The stranger claimed they were for foreigners who wanted them as pets. The chameleon buyer returned every week and bought chameleons, as promised, from excited villagers at $2 a pop. Gradually the chameleons became scarcer and scarcer - but he told the villagers he was waiting for the buyer and keeping the chameleons nearby. One day a new stranger arrived in the village, promising to buy chameleons at $50 a time. The locals again got very excited, but as the chameleons were largely hunted out and to get over their supply problem, the villagers somehow got hold of the first stranger and offered to buy his chameleons back at $20 a time. You can probably see where this is going: apparently the villagers endedup with a lot of chameleons and not much money.
Is this a reasonable parallel for Bitcoin?
Apparently there was a relatively happy ending for chameleons which survived as they were replaced in the wild.
My final point is that possibly a lot of asset classes started out as scams, but ended up as real stores of wealth: gold, diamonds, fine art and fine wines.
When my colleague was a boy, a stranger arrived in his village and offered the villagers $20 for every chameleon they could find. The stranger claimed they were for foreigners who wanted them as pets. The chameleon buyer returned every week and bought chameleons, as promised, from excited villagers at $2 a pop. Gradually the chameleons became scarcer and scarcer - but he told the villagers he was waiting for the buyer and keeping the chameleons nearby. One day a new stranger arrived in the village, promising to buy chameleons at $50 a time. The locals again got very excited, but as the chameleons were largely hunted out and to get over their supply problem, the villagers somehow got hold of the first stranger and offered to buy his chameleons back at $20 a time. You can probably see where this is going: apparently the villagers endedup with a lot of chameleons and not much money.
Is this a reasonable parallel for Bitcoin?
Apparently there was a relatively happy ending for chameleons which survived as they were replaced in the wild.
My final point is that possibly a lot of asset classes started out as scams, but ended up as real stores of wealth: gold, diamonds, fine art and fine wines.