Intellectual decay, Bitcoin edition

Bitcoin is again capturing headlines, due to its recent dramatic surge in price, and to the notable personalities and institutions that have hitched their wagon to the crypto train.

Who invented it, and why, are questions open to debate. What seems incontrovertible, however, is that Bitcoin is a massive speculative bubble, a latter-day tulip mania, a Ponzi scheme that requires ever-increasing infusions of new cash. This need is so great that the bagholder of last resort may very well be that endless fount of liquidity, the U.S. government itself. Witness the declarations of President-elect Donald Trump and others indicating the possibility of purchases by the Treasury. Moreover, it appears that enormous sums are already being channeled from Bitcoin into government bonds, via “Tether.”

Does anyone still claim that Bitcoin is a form of money? In the heady early days, many naive Libertarian types succumbed to the hype, proudly announcing a “digital gold,” a ticket to financial freedom, beyond the control of rapacious governments and central banks.

Although most of the major players currently are big-money types who cynically (and now openly) manipulate the suckers, one can still find die-hard coiners of the old school. In a recent debate, Peter Schiff went head-to-head with Robert Breedlove, a youngish defender of the faith. Schiff easily demonstrated that Bitcoin is in reality “nothing,” and has none of the key characteristics of true money.

The one exchange between the two men that stuck in my mind was related to the notion that a good money must have value. Both debaters were in agreement on this point. Schiff, however, emphasized that the object used as money must have a value apart from and prior to its use as a monetary instrument. Naturally, gold fulfills this requirement (and all others); Bitcoin does not, because it has no existence, so you can’t do anything with it, other than buy and sell it. It has a price, but it has no value.

The response of the crypto advocate: “value is subjective.” In other words, it has value because we say it does. No need for any practical application in the physical world—that’s dinosaur thinking.

Subjective value, forsooth! Bitcoin is a widely-touted alternative to fiat currency. A delicious irony presents itself: Does this "subjective" business not sound suspiciously like the basis of the fiat dollar, indeed of all fiat currencies? Here, take this piece of paper with a number printed on it, backed by nothing, but don't worry, the government says it has value.

Somewhat reminiscent of modern art, is it not? A silly person tapes a banana to the wall and calls it art. You say: Wait a minute, it doesn't fulfill any of the requirements of art. Ahh, my friend, don't you fret, it's all subjective.

Come to think of it, there are countless examples of collapse along these lines, where reality and quality go out the window. Welcome to the modern world. Ersatz everywhere you look.

I wonder just how far the level of intellect had to decay, in order to reach this cerebral wasteland devoid of logic and rational thought. How far did the decay need to progress before huge numbers of otherwise bright and educated people signed up for the digital utopia? They can already live most of their life on line: shopping, social interaction, entertainment, even the carnal pleasures. Why not have money exclusively on line as well? The digitization is already well advanced, so let’s push it just a bit further, and erase any remaining link with “meatspace.”

Instead of Bitcoin, they should have named it Smartcoin. Everything else, from cars to refrigerators, is becoming smart; in other words, subject to endless complication and breakdown.

The transition from crypto currency to central bank digital currency (CBDC) is obvious at this point. Put it in the basket with lockdowns, social media censorship, unrealized capital gains, elimination of cash, destruction of small business—all paving the way for the digital gulag. You say you want to deal with real people using real money? Hahahahaha…..