Does Bitcoin’s price come from some actual value it has? Or does it come from the fact that it is largely controlled by a few whales? In the early years everybody knew whales controlled Bitcoin. They would maintain a floor under the price and sell into pumps. What about today? Has it become ‘freedom coin’, or is it still a massive pumpndump scheme?
Microstrategy corporation owns 70,000 bitcoin.
Block Obe owns 140,000 bitcoin.
Greyscale owns 570,000 bitcoin.
Worse, the scam is an open secret among the corporate entities pulling people into the scam.
Bitcoin, like anything, has some elements that everybody understands, and some that not everybody understands.
This page will list some of those things and clarify the part that some people ignore.
1) People in industrialized nations have been trained to be stupid in some regards for thousands of years. It has reached the point where vast sectors of society have an enforced stupidity that young people can latch on to. In other words a young person can ‘join a powerful gang’ by demonstrating this stupidity, and they can have confidence that their gang of fellow stupid people are in control and will back them up.
Here is an article in the news today about a popular gold supporter and his son.
His son says “Your understanding of money is flawed. You think the key determinant of a money’s soundness is possession of ‘intrinsic value’, a nonsensical concept. What differentiates sound money from fiat money is the former’s emergence on the free market rather than by coercive State edicts.”
Peter Schiff says “Losing money on bitcoin will be a costly, but valuable part of his education.”
Who is right?
Everywhere in the universe, on every planet, intrinsic value is the only long term value anything has, unless you pretend otherwise.
So, on every planet, anywhere in the universe, Peter Schiff is right.
But industrialized economies are built on pretending, and forcing others to pretend, that things have value based on the force of the gang that has control.
Even industrialized language has incorporated elaborate deceptions which serve to enforce the training. If you argue with an indoctrinated person there is no way to win. Their stupidity is not only deeply trained, but the surrounding society has been trained to support stupidity. They will conflate the meaning of ‘value’ in the sense of ‘money’ with other meanings which have developed over hundreds of years.
Junior Schiff is trying to say that a new, better gang has emerged, and he will be happy to explain why his gang is better than the previous one, he just doesn’t understand why gangs don’t win the biggest fights yet.
The logic of the younger Schiff is unseasoned. He has been indoctrinated by one gang that he has been led to believe will ‘win’. But at the end of the day he is trying to be a gangster, or at least playing that role, in exchange for what he believes will be a financial payday and some moral clout.
The concept of ‘money’ in the form of currency is not an archetypal thing unless you attach it to something that preceded the existence of money.
In other words if all money ceased to exist suddenly, it would have no real effect except on those constructs which depend on it. The idea behind fiat, bitcoin and other gang scams is to coerce ‘some other group’ into pretending along, and then trash that group in the end, leave them as bag holders in the fiat and bitcoin scenarios.
If people were trained for thousands of years to believe that they could not buy or eat food unless they clapped their hands three times first, that would become an integral part of eating.
If that structure was suddenly abolished all sorts of mayhem would ensue. Millions of people would experiment with trying to eat without clapping their hands first. Some would starve, some succeed. But then they would wonder how they could buy food without clapping first, since that requires an unnatural transaction i.e., ‘not clapping’ that they believe cannot be done.
Money serves the purpose of managing scarcity in crowded places under the control of ‘authorities’.
The world now has a collection of competing consolidating melting pots, or one melting pot if you prefer, and also a number of already consolidated tribal societies.
Science has created solutions to almost every human problem, except the problem of ‘lack of space’, ‘lebensraum’ or any number of other dangerous phrases which loom over societies.
That problem will only be solved properly by opening up outer space to colonization, but how can those who do not know why intrinsic value is real value expect to survive without money in outer space?
Bitcoin has already been cornered by a consortium of corporate interests, basically ‘coercive state edicts’ without the moral constraints that develop in governments.
Many corporate actors have fueled the run up in bitcoin since 2017. Of course VanEck has covertly bought a large amount of bitcoin before announcing it wants to start a bitcoin fund.
Known corporate interests already control ~5% of the bitcoin supply https://bitcointreasuries.org/
‘Satoshi Nakamoto’ has roughly another 3% to 5%.
In the worst case scenario the lesson the younger Schiff will learn will not be ‘the importance of intrinsic value to money’, but rather ‘the reason why corporate control is even worse than government control’.
At least the younger Schiff has a safe retreat, i.e., the talisman phrase ‘decentralize’, as he watches corporations decay into tyrannies.
Here are two articles claiming gold has no intrinsic value.
Their arguments are inaccurate.
A rock that you use to hold open a door has intrinsic value but probably no value as a currency. It has intrinsic value because it, alone, by itself, is useful without anybody having to pretend or convince you.
Gold has intrinsic value for a number of reasons, but primarily because it is useful for things. All around the world, since prehistory, different cultures and people have stumbled upon gold and used it for something.
Bitcoin does not have any use, in fact it does not even exist, except when a group of people agree to pretend it exists and agree to pretend it is a commodity or pseudo commodity. If those same people decided to call it something else, goober money for example, and pretend it was useful only for keeping track of marble production in a certain country then that’s what it would be and do. Bitcoin requires a group of people to all pretend the same thing, then onboard others. Intrinsic is the opposite of contrived or pretended value.
2) Some people try to use ‘store of value’ as a feature of bitcoin.
A Store of Value, in a decentralized economy, must necessarily have intrinsic value.
In a centralized fiat economy people can be forced to pretend fiat currency has some inherent worth. In other words a government can say ‘use out currency or we will kill or imprison you’.
But in a decentralized economy there is no armed group threatening people and forcing them to continue using the currency.
So anything used as a store of value must have some real value in and of itself. It cannot be something which has no value aside from a group of people pretending it has value.
3) Before the most recent bitcoin halving there was a pump crew promoting a supposed bullish factor called ‘stock to flow’.
This refers to the effect that new supply of something has on that thing’s value. For example if an endless supply of some component used to make refrigerators is always available free then there is no impact on price, but if refrigerators need a material that is only mined in one country, and that country’s production of the material is declining, then that material’s supply trend will push prices up.
Bitcoin is not something that is, or ever will be, used as a component of any product. Nor does it have any use whatsoever, for anything.
It’s ‘demand’ is entirely among speculators, people who believe they will be able to sell it for more than they bought it for.
In 2013 a bunch f people tried to promote bitcoin as a currency. It never caught on because of its long block time and other factors.
In 2017 a bunch of people created an add on program that shortened the confirmation time, sort of, and tried to promote bitcoin as a currency. It never caught on because by then there were hundreds of digital currencies better suited to be used as currencies.
Now, 2021, nobody really pretends Bitcoin has any use as a currency, so people who are pumping it try to push it as a store of value, like real estate, commodities etc.
Nobody can conjure real estate or commodities out of thin air. Anybody who has a computer can create a digital currency. Just as there were dozens of digital currencies which were popular before bitcoin which then dwindled when better digital currencies came along, so also bitcoin will dwindle when its pump crew runs out of hype and better coins come along.