Bitcoin Exchange Scam – Bitcoins Are Now Worthless

Bitcoin Exchange

After considerable thought, I’ve decided to put the Bitcoin Exchange Scammer comment back up as I believe it’s in the public interest, especially so given recent events on Bitcoin Exchanges.

For those unaware, every now and then, I receive a comment through the wonderfully inefficient Nerdr.com spam filter from someone who couldn’t quite find my email address.  That’s fine and most times it’s a small fire that’s quickly put out, or a start-up proposal to consider. All good fun.

Yesterday was a little different.  I came across a message that sent a shiver down my spine.  As much as I have discussed the pros and cons of Bitcoin, I never once realized this could be happening.  It was a comment intended for the Bitcoin Shutdown article and originated from what appeared to be an actual Bitcoin Trading Exchange owner.

Now I’d take this with a grain of salt (heck a sack of it judging by some of the comments left here last week), but it seems like the real deal from what I could dig up.  I’ve removed the Bitcoin Exchange name for obvious reasons and cleaned up the grammar and spelling as best I could.

 

THE BITCOIN EXCHANGE SCAM:

“Hi Nerdr, I could not find an email address to contact you and have some information for you.

Let me first say who this message is from.  I own and run a Bitcoin trading exchange.  Here many users buy Bitcoins and sell Bitcoins for dollars.  As you know it has been a great time for Bitcoin trading with a large rise in value over a very short period of time.

First I started like the others.  I wanted to trade the bitcoins for the dollars on the Bitcoin forum like others.  Then I started my own Bitcoin website to do this.  Some people from the Bitcoin forum used it and were happy.  Some told their friends and so on and so on.  It grew like a mushroom.  I want to say again, first it was all good and clean, no mess, very honest.

Then I had my big idea.  I wanted to make more money.  The number on the exchange.  A number.  I could change it in the programming.  Not too much, because their are other exchanges to balance, but a little would be okay to do.  So I did it.  I increased the Bitcoin value a little.  Say from $1 to $1.05.  No one noticed and many were happy to see it go up.  I was making people happy and the forum enjoyed the fun times with many dreaming big money! haha.

Now I change the Bitcoin price by hand nearly everyday now.  I increase the number and more people give me money.  Sometimes I let the files do this.  It is a miracle like I have a bank haha.  I give them numbers and they give me money. I thank god everyday.

They are greedy.  I don’t care if I cheated them.  I wonder is it bad?  I have a nice life now and will marry soon.  We will buy our first house soon with my Bitcoi money the greedy have gave me.

I am blessed to be alive.”


MY OPINION:

I’ve said it before and I’ll say it again; their are 3 main users of Bitcoin:

  • The Money cleaners/tax evaders.
  • Those involved in non-legal activities.
  • The Greedy.

It seems our friend is going after the greedy.

We all know Bitcoin is a sham, it’s a pyramid scheme, but I never thought to consider the exchanges to be on such shaky ground.  I guess something about them encouraged trust, we think of them with the same respect we hold for the DAX or FTSE 100, but when one considers why we revere these Bitcoin Exchanges the argument falls short and the mental house of cards we’ve built comes crashing down.

Bitcoin Exchange

Bitcoin Exchanges have no audit process, no way of keeping them honest, no trail and no verification procedures.  It’s just a number like he said.  It’s all trust, based on a house of cards and this is one of the issues I’ve been harping on about from the beginning.  Why do you trust the exchanges?  What gives Bitcoin it’s value?

An anonymous currency requires trust between users.  Especially when used online.  If I pay you N Bitcoins, I have to trust you will send the goods in exchange.  Think about who you will be sending those Bitcoins to.  Without trust, there is nothing.  The key to remember is the Bitcoin system relies on trust, yet you are dealing with the most untrustable and criminal of people, exactly those who seek an anonymous currency like Bitcoin.  For those who are still unaware, there is no honor among thieves except in Hollywood.

Bitcoin Scam

It is possible that last weeks Bitcoin Black Friday event (10th June 2011) was a market manipulation.  If you owned an exchange and were running low on Bitcoins, what would you do?

I’ll tell you what I’d do.  I’d drop the prices on the exchange, buy up as many Bitcoins as I could get from Idiots looking to sell, then jack the Bitcoin price right back up and make a killing.  And I’d do it everytime.

And you would too.

There are no controls, no structure and no systems in place to keep things honest on the Bitcoin exchanges.  No Securities and Exchange Commission.  No Financial Services Authority.  Bitcoin is unregulated and not the right place for a regular Joe to be placing money.  Especially when they gain little value from Bitcoins anonymity, unlike those intending nefarious acts.  Add in Bitcoin pricing volatility and you have a currency that is unusable for real world trade.

Having said that, without the Bitcoin Exchanges, how else will Bitcoin users value their “currency”?  They can’t.  Bitcoin valuation, as with any currency, requires a central base to assign that value.

A currency requires agreement on value, even if it is just perceived with little or no tangible mass behind it.

Even if it is just a database our friend can change at will.

What do you think?  Would you put your life savings into Bitcoin?

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258 Responses to Bitcoin Exchange Scam – Bitcoins Are Now Worthless

  1. Bitcoins, some say its the future with prices over 1k$ a coin.

    But let me ask you a question, you run your computer the whole day decoding algorithms which supposedly enable you to see the history of transactions, i.E. Where was the money and where it was before that and so on.

    But here’s another thing, bitcoin is completely anonymous, to make it simple I decoded that my bitcoin was previously with account number “xyz123″, but wait, who owns that account?, Mr. Obama or Mr. Osama’s kid?, bitcoin doesn’t ask anything when you signup for their worthless currency.

    So who is making money from bitcoins?
    Mafia, The underground ( dealers and people selling stuff like that), they’ll ask you for your bitcoins, then sell your bitcoins back to you at spiked prices.

    I may sound funny, but again bitcoin is a ‘virtual’ currency with no ‘real’ value, those who wish to claim that its $1k+ right now, I’d like to know who (rather which authority) created that value?
    Nobody did, its just people asking that kind of money for the bitcoins because there are buyers.

    Some arrogant fools may label me as the one inside a box, rather you are the one in a box, thanks to bitcoins Mafia is getting richer and common people are getting poor.

    Good luck mining some worthless piece of junk, I’d rather work my bass and make some real money.

  2. Lol,
    I bet all you guys feel like real your moms bedroom entertainment in a long shape on your forehead today….
    Hahahhahah, thanks for the great read, hahaha.

  3. The US dollar is the dirtiest currency in the world and you come up with those comments you are just a person with lack of vision and probably a Statist.

  4. The greatest scam in human history is the us dollar.

    • I would agree with this, but the difference is that the usd has nuclear weapons, millions of military, and untold other sources of violence at its disposal without anyone to threaten their use of any such weapon to protect its “valuation”. There is NOTHING that protects bitcoin and all the nsa has to do is shut down all the exchanges, and arrest those who have been traced through exchanges through hosting companies, and the owners of such exchanges. Without these cash points in existence people are holding something of no more value than a txt file on their computer, with a lot more risk to it once the globalist marxist usa powers make it illegal to own bitcoins which mark my word they will do, associating the ownership of such with tremorism and other bs propaganda lines they throw around daily.

  5. I disagree about where did the money come from

    if you have a supermarket, ppl pay cash and leave, you as seller wouldn’t ask who are they

    it is a wallet, why should you know who I am!

    Its the future currencies for sure, the stronger, marketed well, logical cap, will rise

    mine logically, before its late, and you will only follow, just like having a master card today, where you never hold that money or gold in your hand, but you spend, and receive ;)

    another point, no transaction fee, or exchange rate, use TONGA MONGA COIN in japan and then use it again in USA.

  6. Gold and Silver is MONEY (physical in hand) for more than 6000 years!!
    The rest is currency Fiat paper, as for bit coin for more than 2 years I try to find out who invented it!!!
    All the answers I got, is some Japanese sounding name!
    Is this a person, or a group of programmers??????
    Nobody has ever met the person or group, nobody knows!!!!!
    This alone is biggest RED FLAG I have ever seen!!.

    • The original complete concept work was done by Satoshi Najamoto. His work built on the work of many others in the field of Cryptology. It’s not a new concept, but he did combine many parts to make the Bitcoin currency theoretically complete.

  7. Bitcoin = scam.

  8. I believe we can get to the point of a stable Bitcoin currency.

    Scammers will eventually get pushed out of the market as I see a reputable escrow service on the horizon. This will be part of the solution, for a fee of course.

    You cannot force people to be honest, however it’s not that difficult to make being dishonest more difficult every day.

    Think back to the days before paypal for example.

    42Jcel.

    • Why would an escrow service be reputable when being unreputable leads to a massive multiple in profit with no downside of regulation?.

      • Maybe an escrow service would be reputable, simply for the fact that there are honest people who want to provide an honest service for a modest profit. There are those people out there, you know? Not everyone is greedy and some of us really are interested in “the greater good”. Hard to believe, huh?.

        • What’s a modest profit? Would Bill Gates say he was going for a modest profit too? We’re all greedy dude, for money, for power, just some admit it and others don’t.

  9. I would prefer a byte coin for the simple fact that a byte coin should contain at least 8 bit coins and is more compact which will save on electrons having to move fewer coins through cyber space. Thus inconveniencing fewer electrons.

  10. Can you trust any currency. Our government prints money that doesn’t exist every day, and we are completely at their mercy. How is that any different?.

  11. Hello, I am neither a money launderer, dealing in non legal activities OR greedy, and i have been trading bitcoins for about 3 or 4 months now. Personally, I just see it as a minimum investment with good or great return possibilities. Like Gold, Silver, Stocks and bonds, you can either gain or lose money depending on the market. Personally, I don’t see my investing ALLOT of money in bitcoins, but I do find it fun and exciting to buy and sell this virtual currency and would love to see more people accepting them.

    If bitcoins suddenly dissappeared tomorrow I would be dissapointed, but would only be out about 20 bucks. I buy them low and sell them higher and try to make 5 or 10 bucks out of the exchange. But mostly I find bitcoins are just a fun thing to play around with. Sure, my 0.001 bitcoin might have some real value someday, but it’s really not about the money, it’s about the game ;) .

    • The exchange doesn’t magically create value. Your profit of $5 to $10 is coming from the next potential sucker who thinks it’s easy money. That’s why it’s called a pyramid scheme….