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Bitcoin Hoax, Scam?
Could it really be, that something with such a large following and high flying valuation could actually be a hoax or a scam? Well, it wouldn’t be the first time.
Philosophically, the conceptual foundation of money or currency is elusive at best. It is intangible in a physical sense on top of the fact that it is intangible in an abstract-hypothetical, or metaphysical sense. This, of course, from anyone’s experience, does not mean it is not practical in its usage. It relates to nearly everything, and nearly everything relates to it. Therefore, it is not only an economic principle, but a symbolic and even psychological aspect of human existence. On this point, the monetary system is a reflection of the human character.
Trading and bartering are a concept intertwined with coexistence in all life’s forms. Time and timing are concepts that skews and changes the act, or lack thereof, of the trade or barter. The human invention of currency facilitates much needed flexibility and pervasiveness of trading. Money exists between the trade; a place holder, if you will.
There surely are many scams out there involving bitcoin, but could it be that bitcoin itself is a hoax? If one merely inquires on the true value of bitcoin or crypto-currency, one of the most common arguments by proponents of bitcoin is to strip away the metaphysical foundation of fiat currencies: A bit of slight-of-hand whataboutery, at best. The argument goes like this: currencies are inherently unstable, because they are the product of human political fiat.
But, if this is true, Bitcoin as a decentralized currency lacking fiat, makes it more unstable because it is the product of highly spread out and varying speculation rather than a more relative and agreed upon decree. Is Bitcoin a hoax? Well, a hoax would need a contrary reality, whereas Bitcoin is a bit more ethereal in its nature.
So often the most seemingly altruistic offerings often turn out to be pyramid scheme-esque ploys with selfish intents. Even the stock market itself exhibits characteristics such as these; full of “irrational exuberance” that spread like wild fire, which abruptly vanishes once the fuel is gone. The term cult is typically reserved for spiritual followings. But make no mistake, they exist around nearly everything; even say, in the oval office, one could argue. We are all susceptible to this phenomenon. It’s a common occurrence that we all get swept up in the whirlwind of our own emotional passions and forget to pay attention to the underlying fundamentals. It’s also important to remember that these are just the tip of the iceberg, as the real world is full of other people who have their own motivations and agendas.
Cults tend to attract (or seek) troubled or lost souls. In a post-modern epoch of such extensive and broad financial inequality, of course it makes sense for a cult to emerge around monetary value itself for those that are “lost” or “searching”. It is not a coincidence that the most notorious cults of the 20th century were those that were founded in the midst of major crises.
Cults also attract (or seek) popular and influential personalities. This appears to be foundationally innate in that it is a vicious cyclical feature. A popular and influential person is likely to be attracted to a cult because of his or her ability to attract the attention of others. The cult’s ability to cultivate and sustain this attention will be a key factor in its success.
Currencies are traded in pairs because they are relative to each other, and that is why relative interest rates and GDP, can cause movement in them. Bitcoin contains neither of these features.
Bitcoin and other cryptocurrencies feature a value which, like anything of value, is subjected to the nature of supply and demand. But as its value is increasing, this process appears to be fueled by demand for its increase in price. Increase in demand because it is driven up by demand (See Bitcoin Cult).
One of Bitcoins main use cases (approximately 46% of bitcoin transactions) is illegal activity. This should be a concern when considering its adoption, and will be considered by governments on whether to allow its further adoption. Regulatory risk is always something to consider.
Bitcoin cannot be replaced once it is lost. Supply cannot be replenished and it is estimated that approximately 20% of all bitcoin, about 140 billion USD, has been lost forever.
Cryptocurrency gets its value through conversion of a fiat currency value into the digital currency. It’s value is not independent. It’s “value” is in it’s use case, which is cannot be derived from GDP or interest rates like other “real” currencies. It’s use case is that its leger system is decentralized and distributed. Ironically, in order to actually convert fiat currency to a cryptocurrency, there are only centralized authorities to do this. Seems a little bit contradictory and convoluted (See Bitcoin Scam)
Of course Bitcoin and other cryptocurrencies do have a lot of excitement around them for good reason. One of the main reasons is that it is a use case and interesting application of blockchain technology. Blockchain technology will have major ramifications and varying applications, wide reaching and diverse. It is fair to say it is here to stay, whether it is used in cryptocurrency or not. It can and will be applied to nearly any type of transactional interaction, effectively automating and securing it.
An emerging application of blockchain technology that is groundbreaking and exciting is in the NFT (Non Fungible Token) market. Currently this uses cryptocurrency protocol but there is no reason that this cannot be separated entirely. The digital age has made information ubiquitous and redundant. We have been engulfed in that concept since the dawn of the internet. But blockchain technology may change this concept forever!!!
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