Posted on 07/07/2025 5:34:45 AM PDT by delta7
People continue to ask if Bitcoin will replace the dollar. They believe that the recent surge in Bitcoin indicates that it will topple the USD as the world’s reserve currency, but that is merely propaganda. You must understand that Bitcoin is simply a trading vehicle, not a currency. I cannot stress that point enough. My opinion has been unpopular, and clients have walked away due to my stance on crypto. That’s fine, as I am not in this for the money. I can only adequately inform my clients of the unbiased truth and hope that those willing to listen will heed the computer’s warnings.
To begin with, there is much speculation about the founder(s) — Satoshi Nakamoto – who created Bitcoin (BTC) on June 3, 2009. The mystery person or group (or government agency) has been MIA since 2011. Yet 1 million Bitcoins remain in their original account, untouched. His wallet is estimated to be worth over $81 billion at the time of this writing, and if this is indeed an individual, he or she is one of the top 15 richest people in the world. They have never moved a fraction of a BTC from their account. So, one wallet contains 5% of all mined bitcoin. Will this person or entity perpetually hold?
They expect us to believe some mysterious Japanese man created the blockchain technology and simply evaded all world governments. They claim Bitcoin is an anti-government vehicle, but it is a bureaucrat’s dream because it allows them to track where funds are coming from and going. In 1996, the US government released a white paper entitled, “How to make a mint: the cryptography of anonymous electronic cash.” Released by the National Security Agency Office of Information Security Research and Technology, this document explains how a government agency could create something like Bitcoin or another cryptocurrency. They had been attempting to create one for years and then magically Bitcoin came on the scene.
I encourage anyone interested in crypto to read my article regarding this study. Blockchain was created with surveillance at the top of mind.
HowtoMakeaMint2
Bitcoin’s price is akin to the problem that existed when the bubble burst in 1966 with mutual funds because they were listed back then. The value can change at a volatility rate of 10x that of the dollar, making it a highly dangerous instrument as a store of wealth. It is solely a trading vehicle until they weigh it and the value is changed.
In 1966, investors bid the mutual funds up beyond net asset value, so during the crash, people lost everything when they thought it was a secure investment. The net underlying assets may have dropped 20%, but they paid 20% over the net asset value and then sold at 50% of the net asset value. Many mutual funds crashed 70-90%, whereas the Dow drop was 26.5%. Ever since mutual funds have no longer been allowed to be listed. You go in and out at net asset value. Bitcoin must change its structure, or it will never become a valid currency with a stable store of value, which is supposed to be the whole point. It is just an asset class of high volatility.
I have not been bullish on digital currency, as it’s a trading vehicle no different than any other commodity or stock. Sure, a profit could be made, and many have had great success. We do include Bitcoin in our models, and those subscribed to Socrates will see that our arrays are picking up on Bitcoin next year.
Bitcoin is a trading vehicle that is no different from wheat or cattle. It is NOT a store of wealth, as it fluctuates like everything else. It rises and falls no different than any other trading instrument. It is not a “store” of value maintaining some constant value to park your money. We need to get realistic here. The concept of Bitcoin replacing the dollar fails to comprehend what makes something the world’s reserve currency. I will write a piece explaining that aspect since it is crucial to understand.
So, your comment isn’t about the article but about the people who will actually comment about the article.
Interesting.
https://groups.csail.mit.edu/mac/classes/6.805/articles/money/nsamint/nsamint.htm
18 June 1996
CONTENTS
INTRODUCTION
1. WHAT IS ELECTRONIC CASH?
1.1 Electronic Payment
1.2 Security of Electronic Payments
1.3 Electronic Cash
1.4 Multiple Spending
2. A CRYPTOGRAPHIC DESCRIPTION
2.1 Public-Key Cryptographic Tools
2.2 A Simplified Electronic Cash Protocol
2.3 Untraceable Electronic Payments
2.4 A Basic Electronic Cash Protocol
3. PROPOSED OFF-LINE IMPLEMENTATIONS
3.1 Including Identifying Information
3.2 Authentication and Signature Techniques
3.3 Summary of Proposed Implementations
4. OPTIONAL FEATURES OF OFF-LINE CASH
4. 1 Transferability
4.2 Divisibility
5. SECURITY ISSUES
5.1 Multiple Spending Prevention
5.2 Wallet Observers
5.3 Security Failures
5.4 Restoring Traceability
CONCLUSION
REFERENCES
If I were younger and more energetic, I’d be tempted to go into competition with Bitcoin. I would market Sphinx Karma Credits, which are as securely backed as Bitcoin.
I promise to be honest and reliable and to hide all transactions from the government, so my guarantees are as solid as Bitcoin’s. Double pinky promise. Cross my heart and hope to die.
Now all I have to do is get enough willing “investors” to buy in. I still can’t figure out how Bitcoin managed that.
Replace? Short answer …. No!
The wheels of all of this began turning in '71 when the US dollar, THE global currency, was no longer backed.
So, your comment isn’t about the article but about the people who will actually comment about the article.
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Yes, reason? The internet website Bitcointalk has thousands of threads listing financial authors whom criticize Bitcoin. Their Armstrong thread has thousands of negative Armstrong posts, FR is even mentioned, and they even mention “ 917601”.
It gets better.
They also state they contacted the founder of FR to have “917601” banned and removed from FR, weird huh? Some real whack jobs on Bitcointalk, there is even one thread that states 917601 is in fact Martin Armstrong, delusional.
Bitcoin owners are a strange lot.
Just one post from Bitcointalk.org, over three hundred pages of threads. Their “ detective “ work is delusional. I can assure everyone Delta7 on FR ( me) is NOT Armstrong, but just one that follows his ECM cycles.
“Bitcointalk.org
Let me start with this one:
delta7
delta7 is the alias for who seems to be a central figure in that Armstrong cult.
In that forum, at the time of Feb 02 2024, he has posted (republished) 134 armstrongeconomics.com blog pages out of his 493 articles there in total.
He likes to introduce himself as an Armstrong follower who greatly benefited from Armstrong. Example:
delta7 in “Has Europe Just Committed Suicide?”
Quote
Be sure to visit the website for imbedded graphics, charts, supporting documentation, key dates.
I have followed Martin for 25 years- he has been spot on, so spot on he is the only independent financial “ expert” to have been called upon by more than a dozen governments...from the US (Volkner, Trump) to China to Australia to England ( he was personal friends with Thatcher and is credited with saving the Pound when Soros destroyed it).
When challenged, we see replies of a style that some people here are all too familiar with: delta7 in “Has Europe Just Committed Suicide?”
Quote
I have read Armstrong’s forecasts for 25 years- even back when they were paper newsletters.- uncanny.
Those that criticize him are “ unaware” of history and cycles. I post his articles from his website.
His computer Socrates is legend in governments and financial institutions.
Interestingly, delta7 has been member since Sept 2002, but there is a 16 year gap of his publications (articles and comments) that includes Martin Armstrong’s 11 years that he served in prison.
It should not be any surprise for anyone who studied this forum that ...
delta7 is in fact Martin Armstrong himself!”
I want my electrons and I want them now!
Only about 8% of the “dollars” out there in the economy are physical entities, the rest are virtual.
Bitcoin has few if any physical manifestations, it is a chiefly virtual entity.
Bitcoin *has the ability* to replace the dollar as the reserve currency of choice, but that is wholly dependent on the world’s economic drivers accepting, promoting, and bringing to fruition this event.
Finally, you and I don’t disagree: There are a lot of whack jobs in those forums. That is why after about ten minutes, you should stop reading them. There is “nothing new under the sun” with bitcoin. If you understand the concepts, and the technology, it makes some sense.
Will it “replace” the dollar? Not any more than it will replace the yuan, yen, or euro. For the average person the exposure to bitcoin will be minimal.
Will it become a vehicle to transfer value without involving banks? Yes. That is already happening. It is faster, cheaper, and it cannot be stopped by sanctions.
I usually don’t engage on these threads because there are a ton of misconceptions about Bitcoin specifically and digital currencies in general.
And, I do tend to roll my eyes at much of what Armstrong says. But, people can believe what they want.
I want my electrons and I want them now!
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Reminds me of the famous Dutch Tulip bulb crash. “ Tulip Bulbs” were a financial asset, 1634-1637, until they suddenly weren’t. FOMO and herd mentality. It is the first recorded financial speculation mania gone bad, suddenly and unexpectedly .
Today we have evolved even lower, intangible electrons on a screen is somehow considered “Wealth”….to each his own.
he makes some good points. Of course, bitcoin is a trading vehicle. But, if you think about it, so is every currency....what makes bitcoin unique is that there is a finite supply. In that regard it is unlike every other currency in the world. Every one of them.
Even so, it is true that for now it is a bit too volatile to be a true store of value....but....so is every other asset. There is no true store of value. That’s sort of part of the human condition.
But bitcoin has now been above $100K for like 2% of its life. For many of us, especially those who got in early, it has functioned nicely for us - as a store of value and a creator of wealth.....
Good advice. As we are still free to “ invest” in whatever we choose is what has kept Trade and Commerce thriving for 4,000 years….paper currencies, Gold, equities, commodities, tulips, electrons, etc….all sectors end up “ correcting” each other over time.
Bitcoin?
I’m still waiting for ANYONE to show when/how A1S10 was Amended that gold/silver was lawfully superseded by fiat paper ala non-govt entity known as Federal Reserve
Now, if anyone wishes to take Bitcoin, that’s outside of any govt purview
The use of BTC bears resemblance to Gresham's law. As far as other coins, all are securities and not commodities because more coins can be issued, unlike BTC. The $ has aspects of a security because the quantity of dollars may be diluted. So BTC is the better money than sheetcoins or fiat money.
Armstrong has a point about BTC volatility and store of value. However, all currencies, especially fiat, fluctuate in value. The $ has been an exception, certainly when it was backed in gold or when Breton Woods was in place. So Armstrong's comparison assumes an historical aberration.
Just because it has the word Coin in it doesn’t mean it’s Real Money ,LOL
Bitcoin’s value comes from the widespread trust in its security, scarcity, and predictability. ROFL
Why does bitcoin have any intrinsic value?
I ask this but never get an answer. I do get why people who own bitcoin promote it so hard, they are looking to drive up the value of their investments.
A gold or silver coin has value because of the precious metal they contain.
A Gold backed security has value because in theory you could exchange the paper for a certain amount of gold.
Even a fiat currency like the dollar has value because it is backed by the most powerful military in the world and the taxing and legal authority of the Government.
However crypto-currency seems to have value because they claim that it is anonymous from the government. Honestly I doubt that, but even if it is currently true as technology advances it that value will likely disappear.
So what is the value of bitcoin? I ask this in all sincerity.
Trump will make it a predominated currency. But the dollar will still be available to use. Trump really bitcoin. He’s making a bunch of money off of it.
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