Upton Sinclair’s often cited adage about the difficultly of persuading a man to entertain notions contrary to the status quo providing his salary applies to this article.
Ms Wildfire hasn’t glommed onto the Bitcoin polemic because she has any actual depth of knowledge on the subject; she has done so simply because it is sure to get readers. Readers who can’t stand watching others become wealthy holding Bitcoin, and Bitcoin holding readers who feel compelled to dispel her misconceptions so others can benefit as they have. Nothing draws a crowd like compassionate casandras attempting to persuade the willfully ignorant.
Every item of fear, uncertainty, and doubt that she decries about Bitcoin has rational and widely available counter arguments that she ignores. Her arguments, being basically only emotional arguments then, fail in that regard as well because they are built upon faulty interpretations of the way we arrived at the status quo.
The energy thing, for instance, is bogus. Bitcoin uses a small fraction of the energy the current system uses. Christmas lights use more energy. The US military uses more energy. Everyone knows that the prime mission of the military is to make the world’s monetary system use US Treasuries as layer one money. The world is tired of the dollar and won’t be surprised if the US Government pulls another monetary coup like it did at Bretton Woods and leads the charge towards using Bitcoin as the world’s layer one money. Most holders of Bitcoin are American. Most companies that are building out a crypto infrastructure are American. Bitcoin is not so much an investment as simply a reservation for a piece of the future’s most pristine reserve asset; the collateral upon which will be built a new monetary system. The price of bitcoin isn’t going up, the value of the dollar is going down.
Seldom do the little guys get to front run the big guys when it comes to having the ability to reserve a piece of such an asset. At the founding of the American colonies, the British ruling class got most of the good coastal land close to navigable rivers. Their capital and status enabled them to arrive ahead of the poor that the ruling class was driving off the land in Britain. Poor latecomers eventually had to travel above the escarpments where boats could not travel and steal less valuable land from the natives. If they were lucky enough to establish a settlement, the rich fixed the property tax system to their favor so they could hold the speculative land in the suburbs at low cost. Rich get richer… , well you know the rest.
In the case of Bitcoin, the opposite is happening. Small investors who have taken the effort to study Bitcoin cycles or have had the discipline to dollar cost average are securing substantial Bitcoin holdings at a much lower price than large institutions will pay. Thus these small holders have the ability to weather bitcoins volitility and consistantly enjoy superior and life-changing improvements in their wealth.
Good for them.
Even if Bitcoin drops 70%, just the interest many will continue to earn on their Bitcoin will exceed by orders of magnitude any interest they could earn on dollar deposits. Ms Wildfire should go ask her economists why this should be so. When she comes back with those answers she can begin to understand what’s going on.
In the meanwhile, those of you who wish to get the jump on her are encouraged to read Layered Money by Nik Bhatia and The Price of Tomorrow by Jeff Booth.