The term “tulip mania” is now often used metaphorically to refer to any large economic bubble when asset prices deviate from intrinsic values.
Essentially what is being sold is a promise to pay, and nothing of its own value. In the language of IT, bitcoin and similar cryptocurrencies are vaporware.
You buy in, you are relying on the kindness of total and faceless strangers.
You buy in, you are relying on the kindness of total and faceless strangers.
In today’s episode, Dr. Jordan Peterson sits down with four vocal members of the #Bitcoin community for an introduction to the world of #cryptocurrencies. Together, they cover a variety of topics ranging from the intricacies of Bitcoin, other cryptocurrencies and #blockchain security, to philosophical opinions on the utility of money, ideal economics, and mapping value . . .The Cliff Notes version is that bitcoin is basically digital gold. Theoretically the value of gold equally depends on "the kindness of total and faceless strangers.”
You may object that gold has a history of being money, and that’s true - but bitcoin has advantages of its own.
Bitcoin has competitors, but it is the original, and subsequent competitors lack that first mover advantage. And the participants claimed that the “market capitalization” of bitcoin is a cool trillion dollars.
And the ephemeral nature of bitcoin could have an advantage of its own when it comes to government intrusion. You could hide gold somewhere on your property, but technology would enable the government to find it provided only that it knows it’s there somewhere and is willing to break walls, and so forth. In principle, it could be a lot harder finding the password for your cryptocurrency.
In the language of IT, bitcoin and similar cryptocurrencies are vaporware. You buy in, you are relying on the kindness of total and faceless strangers.
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Yes, and whereas banks have strict protections and fraud control measures to protect us from thieves, the crypto farms have no such protections.
If your password is compromised, tough luck, you lose $35,000 or whatever you had in your crypto “account”.
But in terms of criminal communications, crypto is a marvelous means of hiding illegal activity, and paying off partners in crime.
At another level, crypto is a scheme for the so-called crypto-miners — those who store and validate the transactions via massive calculations in their data centers — to skim money off the top of crypto transactions.
The U.S. dollar is already “crypto” in the sense of being mostly digital (non-paper and non-coins) in its use. Only 10% of money in the economy is U.S. dollar paper bills and coins.
The big difference is that the U.S. dollar has a government, banks, and financial institutions backing it with a vested interest in protecting their customers and guarding their reputation as honest brokers of the public trust.
Brandon and friends, of course, not so much.