The Argument Against Crypto Currencies

“Coins” that are not backed by a government representing a rule of law and an army to enforce it, at the end of the day do not have any real value. Dollars and any other denomination are representative of their respective economies and ability to enforce ownership. Just look back at the origins of “money”. They were all actual coins representing some general or king, backed by actual economic might (erg gold and trade). And these coins would collapse when their empires collapsed. What is Bitcoin representative of? Nothing. It solved partially for the ownership problem by rephrasing it as a collective coordination game theory problem, quite elegantly, but that is only half a solution. Until any coin actually represents something, like a country adopts it as fiat, it is basically worth nothing. It is a science experiment.

Cryptos are intangible electrons. The dollar is backed by faith in the US economy. Cryptos are valued in dollars! Dollars are not valued in Crypto.
The only ones endorsing crypto are the miners and the brokers who get a fee for service from the speculators. They are barkers trying to get others to take all the risk in speculating on the direction of the market. Blockchain is not crypto.

It may not be the future of money, but it is the present of fervent speculation. A currency that gulps megawatts of energy, is severely limited in transaction volume and speed, backed by nothing except hope and faith, and now, we learn, isn’t even fungible because you can blacklist specific units of it and make it impossible to interchange. Doesn’t sound like the future of money to me.

Also, after 15 years or so, you can still barely do anything with Bitcoin other than exchange it for other crypto or fiat currency. Almost no merchants will accept Bitcoin for payment. (Crypto evangelists like Elon Musk accepted it for t-shirts in the online shop, product with a huge margin.) The volatility of cryptocurrency makes it too risky to use as a currency. I can’t understand the argument against most fiat currencies. I’d rather accept dollars that might annually decline by 5-10% occasionally, 2-3% normally over a cryptocurrency that could decline in value by 60% in a matter of weeks. I’m not saying it’s worthless or hasn’t stood the test of time.

If people thought keeping their money in regulated banks is unsafe, crypto is the wild west. I struggle to understand why Crypto has gone up in value and realize there is an underlying value in Crypto for money laundering, illegal activities, circumventing sanctions, and government currency controls. I suspect Crypto will be highly regulated or banned by many countries.

“Bitcoin is a commodity backed monetary asset”.

This is simply incorrect. Bitcoin is a set of binary digits stored on a network of computers, and is not redeemable into any commodity. Any value it has depends on the willingness of others to buy it with real currency, i.e. the sort you can buy groceries with, and this is subject to the volatile whims of crypto enthusiasts.  Gamble if you wish, but don’t confuse it with investing.

New School are simply buying the Emperor’s new clothes….it’s great gig for those in on the scam but it will go to Zero because well it is NOTHING NOTHING at all. It is just a few electrons on a drive….it’s origins are extremely shady…made up name Satoshi…started as a utility failed and hey presto a store of value…that’s when it went full ponzi…it meets all the definitions of a ponzi and then some. This generations glistening IPO–looking for the get rich quick and live like an emperor. Seem like a great deal until everyone sees the emperor has no clothes. It will die it’s just a matter of when. The only thing sustaining it is the greater fool theory…hey some got rich and well played…hope they diversified. Gold will still be here end of this decade Bitcoin will not…. there is no way that thing is getting out of this decade…none of the crypto’s will. But be warned central bank crypto is a poison all of it’s own if it comes….There is simply no need for it other than nefarious reasons on government and Central Banks part…

As one of my financial advisors says, “No one rings a bell to tell you when the crash is coming. Luna, Bitcoin, FTX, Dogecoin, etc. LGB coin going for $0.0000000008″

The whole crypto universe seems to be populated by fraudsters and people who are too greedy or lazy to understand what they are buying. I really don’t care very much who loses or how much as long as the losses and economic effects remain within the La La world of crypto. That said, SBF appears to be a particularly predatory creature in the crypto swamp; I do hope he spends many, many years in prison.

But when the press and general public talk about it, they tie it to crypto assets themselves. That damage will take time to undo. Once again, crypto class assets evolved to be stored and transacted by the OWNER of the asset, not an intermediary. That’s why it was decentralized and trust less from the start. Anyone with access to the internet can store and transact crypto assets in the same way people can do with cash or gold, but without physical limitations of cash gold. Companies like FTX perverted this concept and used public’s confusion and trust based on regulated asset to perpetrate fraud.

So much crypto wiped out, just in the past few months…

• Three Arrows Capital (3AC) failed
• Voyager Digital failed
• Celsius Network failed
• FTX crashed and burned.
• BlockFi bankruptcy
• Terra failed
• Hodlnaut failing
• Zipmex failed

The future of crypto assets is probably tied to institutions and applications which leave the owner in control and supervision of what happens to their assets, while abstracting custodial complexity and user experience away from them.

What’s the mechanism that’s propping up Bitcoin? Despite the constant influx of crypto bad news, it’s been suspiciously tightly rangebound at 16-17k all through the FTX collapse.

It’s hard to believe that anyone is putting money into Bitcoin at this price in the current environment. So are the crypto whales simply really stubborn at holding, as they like to claim? Or is there something else going on?

Is it possible that they just generate more “stable coins” out of thin air, still pegged to 1USD, and use them to keep buying bitcoin to prop up the price? As long as people do not question the peg, this looks like a real demand. Not saying this is the case, but I wonder if it could explain the current situation if true?

Cryptocurrencies were developed to evade government regulations and taxes. The phonies who continue to push for this market are the Charles Ponzi’s of our time – people who scam billions from stupid investors anxious to lose their money. In the last months alone, over $100,000,000,000 in REAL dollars has been siphoned off by the founders of FTX and Binance… Perhaps another $200BB in the last year. And it’s getting worse. Meanwhile, gangsters like Kris Marszalek and Sam Bankman-Fried and Changpeng Zhao are allowed to go free. No jail time. No penalties yet. Or ever.

Tether and Binance. One and/or both will have to break for Bitcoin to aggressively decline. The sad part of the whole FTX sordid affair was that it had little to do with the actual crypto. It may as well have been widgets. A very traditional financial fraud scheme was perpetrated at scale using methods well known to traditional financial markets without any traditional regulations or oversight.