During the 2022 Bitcoin conference in Miami the mobile payment service Cash App (developed by Block, Inc.) announced they would allow its customers to receive their paycheck earnings in bitcoin. The feature is called “Paid in Bitcoin”.
‘Paid in Bitcoin’ would allow customers with Cash Cards to customize an amount, a percentage (1% to 100%) of their direct deposits which would then automatically be invested into the cryptocurrency, effective starting April 7. Cash App integrated with Lightning Network, the decentralized blockchain payment portal in January with plans to further expand to make it even easier for customers to make instant bitcoin transfer via QR codes.
Jack Dorsey, founder of Block (formerly named Square) and a Bitcoin Maximalist spoke at the 2021 conference and said he was committed to making the crypto “the native currency for the internet”.
In addition to the Cash App feature that will convert your paycheck to bitcoin, the company has more features they plan to roll out in the following weeks including ‘Round Ups’. Round Ups would enable customers to automatically invest in either bitcoin, stocks or exchange traded funds with the change (rounded to the nearest dollar) from a debit transaction.
These new roll outs also come on the heels of a major data breach, where more than 8 million Cash App customers may have had their personal information compromised, possibly as a result of a former employee that downloaded internal reports without permission.
Bloomberg’s Lorcan Roche Kelly called Bitcoin “the first true religion of the 21st century.” Bitcoin promoter Hass McCook has taken to calling himself “The Friar” and wrote a series of Medium pieces comparing Bitcoin to a religion. There is a Church of Bitcoin, founded in 2017, that explicitly calls legendary Bitcoin creator Satoshi Nakamoto its “prophet.”
The dirty secret of religious studies is that there is no universal definition of what religion is. Traditions such as Christianity, Islam and Buddhism certainly exist and have similarities, but the idea that these are all examples of religion is relatively new.
The word “religion” as it’s used today – a vague category that includes certain cultural ideas and practices related to God, the afterlife or morality – arose in Europe around the 16th century. Before this, many Europeans understood that there were only three types of people in the world: Christians, Jews and heathens.
Above: Photo / Collage / Lynxotic
This model shifted after the Protestant Reformation when a long series of wars began between Catholics and Protestants. These became known as “wars of religion,” and religion became a way of talking about differences between Christians. At the same time, Europeans were encountering other cultures through exploration and colonialism. Some of the traditions they encountered shared certain similarities to Christianity and were also deemed religions.
Non-European languages have historically not had a direct equivalent to the word “religion.” What has counted as religion has changed over the centuries, and there are always political interests at stake in determining whether or not something is a religion.
As religion scholar Russell McCutcheon argues, “The interesting thing to study, then, is not what religion is or is not, but ‘the making of it’ process itself – whether that manufacturing activity takes place in a courtroom or is a claim made by a group about their own behaviors and institutions.”
Critics highlight irrationality
With this in mind, why would anyone claim that Bitcoin is a religion?
Some commentators seem to be making this claim to steer investors away from Bitcoin. Emerging market fund manager Mark Mobius, in an attempt to tamp down enthusiasm about cryptocurrency, said that “crypto is a religion, not an investment.”
His statement, however, is an example of a false dichotomy fallacy, or the assumption that if something is one thing, it cannot be another. There is no reason that a religion cannot also be an investment, a political system or nearly anything else.
Mobius’ point, though, is that “religion,” like cryptocurrency, is irrational. This criticism of religion has been around since the Enlightenment, when Voltaire wrote, “Nothing can be more contrary to religion and the clergy than reason and common sense.”
In this case, labeling Bitcoin a “religion” suggests that bitcoin investors are fanatics and not making rational choices.
Bitcoin as good and wholesome
On the other hand, some Bitcoin proponents have leaned into the religion label. McCook’s articles use the language of religion to highlight certain aspects of Bitcoin culture and to normalize them.
For example, “stacking sats” – the practice of regularly buying small fractions of bitcoins – sounds weird. But McCook refers to this practice as a religious ritual, and more specifically as “tithing.” Many churches practice tithing, in which members make regular donations to support their church. So this comparison makes sat stacking seem more familiar.
While for some people religion may be associated with the irrational, it is also associated with what religion scholar Doug Cowan calls “the good, moral and decent fallacy.” That is, some people often assume if something is really a religion, it must represent something good. People who “stack sats” might sound weird. But people who “tithe” could sound principled and wholesome.
Using religion as a framework
For religion scholars, categorizing something as a religion can pave the way for new insights.
As religion scholar J.Z. Smith writes, “‘Religion’ is not a native term; it is created by scholars for their intellectual purposes and therefore is theirs to define.” For Smith, categorizing certain traditions or cultural institutions as religions creates a comparative framework that will hopefully result in some new understanding. With this in mind, comparing Bitcoin to a tradition like Christianity may cause people to notice things that they didn’t before.
For example, many religions were founded by charismatic leaders. Charismatic authority does not come from any government office or tradition but solely from the relationship between a leader and their followers. Charismatic leaders are seen by their followers as superhuman or at least extraordinary. Because this relationship is precarious, leaders often remain aloof to keep followers from seeing them as ordinary human beings.
Several commentators have noted that Bitcoin inventor Satoshi Nakamoto resembles a sort of prophet. Nakamoto’s true identity – or whether Nakamoto is actually a team of people – remains a mystery. But the intrigue surrounding this figure is a source of charisma with consequences for bitcoin’s economic value. Many who invest in bitcoin do so in part because they regard Nakamoto as a genius and an economic rebel. In Budapest, artists even erected a bronze statue as a tribute to Nakamoto.
There’s also a connection between Bitcoin and millennialism, or the belief in a coming collective salvation for a select group of people.
In Christianity, millennial expectations involve the return of Jesus and the final judgment of the living and the dead. Some Bitcoiners believe in an inevitable coming “hyperbitcoinization” in which bitcoin will be the only valid currency. When this happens, the “Bitcoin believers” who invested will be justified, while the “no coiners” who shunned cryptocurrency will lose everything.
A path to salvation
Finally, some Bitcoiners view bitcoin as not just a way to make money, but as the answer to all of humanity’s problems.
“Because the root cause of all of our problems is basically money printing and capital misallocation as a result of that,” McCook argues, “the only way the whales are going to be saved, or the trees are going to be saved, or the kids are going to be saved, is if we just stop the degeneracy.”
This attitude may be the most significant point of comparison with religious traditions. In his book “God Is Not One,” religion professor Stephen Prothero highlights the distinctiveness of world religions using a four-point model, in which each tradition identifies a unique problem with the human condition, posits a solution, offers specific practices to achieve the solution and puts forth exemplars to model that path.
This model can be applied to Bitcoin: The problem is fiat currency, the solution is Bitcoin, and the practices include encouraging others to invest, “stacking sats” and “hodling” – refusing to sell bitcoin to keep its value up. The exemplars include Satoshi and other figures involved in the creation of blockchain technology.
So does this comparison prove that Bitcoin is a religion?
Not necessarily, because theologians, sociologists and legal theorists have many different definitions of religion, all of which are more or less useful depending on what the definition is being used for.
However, this comparison may help people understand why Bitcoin has become so attractive to so many people, in ways that would not be possible if Bitcoin were approached as a purely economic phenomenon.
China is at the forefront of government opposition to cryptocurrencies
The central bank of China stated as a declaration that all transactions involving Bitcoin and any “virtual” currencies illegal, according to the AP.
This seems to be an escalation of the various methods being used to block and prohibit the use of any currency or “money” outside the direct control of the Chinese government.
In a notice released by the central bank the reasoning was elaborated on – stating that digital currencies such as Bitcoin, Ethereum and others disrupt the current financial system and encourage and help facilitate money-laundering and other crimes.
“Virtual currency derivative transactions are all illegal financial activities and are strictly prohibited,”
–the People’s Bank of China
The price of Bitcoin fell, to $41,180, in the hours after the announcement. Other major cryptocurrencies also fell. . Ethereum dropped almost 10%, falling from $3,100 to around $2,758.
Those levels appeared to be a short term low as there has been a recovery bounce since the initial reaction selloff.
China is gearing up for it’s own ‘innovations’ involving digital currencies and transactions
This clampdown follows the banning of Bitcoin mining and an exodus of a large number of Chinese mining operations, many relocating to the US, Europe, Southeast Asia and elsewhere. At the peak, Chinese miners accounted for around 3/4 of the world’s electricity consumption related to crypto mining, according to the Cambridge Bitcoin Electricity Consumption index.
That share is still the highest, though far lower, with the USA being the second largest consumer of electricity used for Bitcoin mining.
There is a worldwide “showdown” of sorts building, with cryptocurrency adherents touting, often with great resolve, the privacy, anonymity and “freedom” of using the coins, while many governments, China, and Turkey being outspoken, consider the potential losses that could come from allowing private actors to control financial transactions.
Although fiat currencies all have cash, paper bills, that can also be used anonymously, the potential criminal laundering has government controls and laws in place to minimize (or at least attempt to minimize) the magnitude of the problem.
tumbles
Governments getting increasingly worried as crypto adoption continues to expand worldwide
Many governments, including the People’s Bank of China, are developing electronic versions of the local fiat currency, such as China’s yuan for example. to facilitate cashless transactions which, unlike with Bitcoin, can be more easily tracked and controlled by the local authorities, communist or otherwise.
Calls and warning are also building with Regulators in many countries, including the US, warning of the dangers and emphasizing that they want cryptocurrencies to have greater oversight.
For example, Gary Gensler, chairman of the Securities and Exchange Commission, recently said that investors need more protection in the cryptocurrency market, calling the current state of the largely unregulated market “rife with fraud, scams and abuse” and compared it to the “Wild West.”
The SEC has already cracked down on cases of alleged freud involving crypto, but Gensler believes that the agency will need more authority from Congress to and funding to adequately regulate the market..
As a result, miners have been moving operations out of China.
Two years ago, China alone accounted for around three-quarters of all the electricity used for crypto mining, by far the most in the world, according to the Cambridge Bitcoin Electricity Consumption index.
Expect more government announcements involving crypto and new ways to try to control or inhibit its proliferation
The looming showdown appears heading for a significant and dangerous climax, with both sides, crypto enthusiasts and private holders and users of the coins on the one side, and, in some cases, terrified governments on the other wanting to outlaw and stamp out the entire sector.
In the US this will be difficult, with so many high profile and powerful individuals and companies already embracing the idea that the future will contain, at least for the foreseeable time frame, both the government controlled fiat system and the surging and diverse cryptocurrency systems.
Receives Lots of commentary: Support, Suggestions, NFT Requests and Memes
Actress, producer, entrepreneur – and now a recently, new owner and proponent of the Ethereum (ETH) cryptocurrency. Aside from her characteristically ebullient tweet announcing her purchase there has, as of yet been little verbiage to to expand on her reasoning or perspective on the space.
Also not clear how she arrived at the choice of ETH rather than the obvious #1 crypto BitCoin.
While some twitter reactions were slanted toward the negative, implying that her entry into the space implies some sort of over commercialization that is a sign of impending decline or decay.
This could well be a possibility but there appears to be more going on here beneath the surface.
Though most of the attention toward Cryptocurrencies revolves around speculation on a given coins price vs. the US $, there is much more to the phenom than that very recent trend. Even after the mania and the get-rich-quick schemes are long gone the use and existence of Bitcoin and Blockchain is likely to go on.
A new cryptocurrency called “Pi” (π) allows anyone to “mine” the currency from a cell phone. With over 23 million “Pioneers” mining the goal of 100 million is in sight and when reached the coin will launch. Until then there is no price for the coin and it can only be earned by mining with your phone.
The egalitarian and decentralized concept behind the coin is new and could take cryptocurrency to a whole new level, all without price speculation being the main driver. Learn more about Pi here.
Witherspoon launched Hello Sunshine back in 2016 to provide a digital space to showcase women storytelling.
The company recently sold, earlier this year, for a whopping $900 million. And it sounds like she’s using some of that payout to test the crypto waters.
The “Legally Blonde” actress took to her social media account to trumpet the news, “Just bought my first ETH! Let’s do this #cryptotwitter”. As of this writing the current price of 1 ETH is $3,942.21 (although prices can fluctuate quickly in either direction).
This is not far off the all time high of over $4100 that was breached in May of this year.
Her tweet was liked instantly by 60k and her followers quickly sky rocketed, now at 2.9 million.
Many took the opportunity to comment on her account giving the actress a taste of Crypto Twitter (which as you read the comments, you can see are quite intense).
Vocal Youtuber, social media star, brother to Jake and “boxer” Logan Paul didn’t waste any time by responding to Reese’s tweet offering her a NFT of the World of Women collection (a project aimed to foster diversity within the NFT space).
This is not likely without a self-promoting aspect as Paul launched his new native ZOO” crypto token for his NFT game called CryptoZoo.
welcome to the club Reese 👊🏼 DM me your Eth address, I’d love to gift you this @WorldOfWomenNFT because y’all could be related. And it’d be badass for your first NFT project pic.twitter.com/epA0EZQdXG
Another high profile blonde added to the Crypto Twitterati conversation with her preferred takes in digital coin.
It’s just more evidence that the crypto future is not going to disappear anytime soon – there are just too many strata of society that are taking a stake in the continued existence and growth of blockchain and crypto.
Other crypto coin users were compelled to let Witherspoon know how they feel, flooding her account with tweets explaining the benefits of competing crypto coins, sending unsolicited pitches for a varie f the obvious choices including Bitcoin and Dogecoin.
DogeCoin is likely best known as the crypto alt-coin that Elon Musk has often championed from his twitter account, along with Mark Cuban and others.
During his stint hosting Saturday Night Live the billionaire (Musk) also broadcast his involvement with the Doge, and has received the moniker “DogeFather” as a result.
Hey @ReeseW in case you didn’t know when the founders started eth they kept 70% for themselves. Think of it like a tech company. #bitcoin however, the founders kept nothing and it’s actual fair sound money empowering humanity and way more important than any tech company.
Above: Jack Dorsey & Elon Musk – Photo – various / tesla / Twitter / collage Lyxotic
Possibly staged “Twitter feud over BitCoin” leads to portentous upcoming event: “THE talk”
Although both Jack Dorsey, head of both Twitter and Square, and Elon Musk are long standing and staunch BitCoin advocates, a lot of chatter around the internet has painted Musk as having gone soft on the crypto currency.
Th narrative that has been put forth pits his loyalty to Bitcoin as somehow incongruous with his support for DogeCoin, the somewhat less serious AltCoin variant he has openly championed.
Intermingled with this straw-man charade, is the also over-hyped idea that the energy used by BitCoin mining is a factor in global warming and therefore a stain on Musk’s otherwise high profile positive sustainable energy resumé.
While many article have shown this argument to be blown out of proportion at best, apparently the whole world (China, if you’re listening) has seized on this talking point as a way to damage BitCoin’s popularity and pedigree.
The attempt to use this argument to undermine BitCoin’s adoption progress and futuristic pedigree appears to have already backfired, however. For example, at the recent BitCoin conference in Miami, Jack Dorsey announced plans to invest in a sustainable energy powered BitCoin mining facility.
Elon Musk has also stated via his twitter account that Tesla would resume accepting BitCoin payments, as soon as more miners switch to renewable energy. This coming after he had announced, to great fanfare, that Tesla would accept the cryptocurrency and then, in May, reversed the decision after backlash from those who pounced on the issue to try to tarnish Tesla’s sterling reputation as a proponent of the transition to sustainable energy.
Though not yet confirmed 100%, the Twitter exchange between the two titans implied that the “talk” would take place in conjunction with the “The B Word” BitCoin conference, which kicks off on July 21, 2021. Sponsored by Ark Invest, Square and Paradigm, the big name speakers and hype already building, along with the timing, coming on the heels of a huge peak then “crash” in the crypto markets, looks to be a watershed event for Bitcoin and cryptocurrencies in general.
Details on whether the exchange between the two will be live on stage or via video conference have, as of yet, not been revealed.
Twitter and Square CEO Dorsey tweeted Thursday about an upcoming “The B Word” bitcoin event, and Musk responded to it. It’s unclear if the event, which kicks off on July 21, will be virtual or in-person.
The potential for drama as the two discuss a topic on which they, for the most part agree, is a smart way to hype the event, both the conference itself and the monumental meeting for “THE Talk”.
Regardless of any fireworks or revelations coming out of the event and the meeting between these two incredibly influential business leaders, the upshot is that all of the above is a net positive for BitCoins progress toward more widespread adoption and acceptance.
Critical mass may already been achieved for crypto in the US
The overly manic focus on price fluctuations notwithstanding, there is a rapidly growing sense that the #1 cryptocurrency as well as all related coins and activities are reaching the point, in the US, that it will be impossible to return the genie to the bottle.
Any attempt to block or outlaw, in totality, the emerging world of crypto-finance, is likely to fail. Realizing this there appears to be a faint whisper of capitulation on the part of both the government in the US and among the “old guard” establishment, namely Wall Street.
Dorsey’s take, as quoted from his appearance at the BitCoin conference in Miami:
“Governments are trying to block cryptocurrency use to avoid losing hold of power”
“It can’t, and it never will.” — musing on the likelihood of Wall Street controlling bitcoin.
“That’s why we don’t deal with any other currencies or coins — because we’re so focused on making bitcoin the native currency for the internet.” — when asked about payments provider Square’s ambitions for bitcoin.
In Netflix top 10 recently as the premonitions keep cropping up
First, to be clear, this series was produced by Crackle (Originally Sony Crackle) and in-all 3 seasons were produced between 2016 (first premiered on September 6, 2016) and 2018. It stars Adam Brody, Edi Gathegi, Otmara Marrero, Martin Freeman, Ron Perlman, Addison Timlin, and Mira Sorvino.
On November 15, 2017, the series was renewed for a third season which was released on November 1, 2018. On May 4, 2021, all three seasons were made available on Netflix and surged up into the top ten in spite of the age.
The correspondences are loose, as is the connection between the subject matter and the real world analogs. The series is dramatic and emotional more than technical and the title “StartUp” is a bit meh. It conjures up images of Silicon Valley nerds and other tech bros and lame plots with outdated “dot-com” plot twists.
“StartUp” could not be further from any of that. Set in Miami (great first choice) it has the reputation of that city for money laundering, drugs and financial crimes as a backdrop.
Ultimately it’s about life and loss, the life and death struggle to find the “American Dream” and at the same time has connections to Crypto, Alt Coins, Web 3.0, The Dark Net, the criminal underworld, specifically financial crimes, Silk Road and, of course, tech start ups and venture capital.
The intertwining of this trio from disparate backgrounds is awkward but at the core of the story
It begins with “Izzy” Isabella Morales, who is a genus code crunching hacker who’s struggling to try to launch a crypto coin, “GenCoin” that she has been working on for over five years, since her time on scholarship at Stanford.
There’s not a lot of detail about her code and I don’t recall the term “blockchain” being mentioned, but they do mention bitcoin throughout the show and, considering it was around 2016 during production it is interesting to see where much of the plot fits 2021 far more.
A kind a linking character in the show is FBI agent, Phil Rask played by Martin Freeman who serves, wonderfully, to give exposition and a factual tour of the Miami crime scene and how he, and the FBI are swimming in a virtual ocean of corruption. If you can’t beat ‘em, join ‘em appears to be his motto as he is actively soliciting bribes from the jump.
Nick’s father, who is both well connected in the upscale world of financial corruption that operates openly within the big banks and corporations of the established Miami elite, is put into a jam by Agent Rask, forcing him to search for a fast escape from Miami.
Reluctantly, Nick is pulled into his father’s criminal dealings, the last thing he ever wanted, and as a result crosses paths both with FBI Agent Rask and, ultimately, invests in Izzy’s GenCoin project using his Dad’s dirty money. Once Izzy connects to Nick Talman (Adam Brody), the plot takes off.
Ronald Dacey who is a Haitian “gang leader” has a special, unique and unexpected role to play in the series. He is the human embodiment of the way the system favors the white collar criminals at the top, including the FBI, in this case, while the poor minority populations, epitomized by the tough Haitian ghetto in Miami, are forced into drug dealing and violent turf wars just to survive.
It turns out that Izzy, Nick and Ronald are not really that far removed from one another as they soon find out that a big chunk of the money Nick got from his Father turns out to belong to Ronald and his “gang”. The money was supposed to be laundered and managed by the bank where Nick’s father worked.
In an intense climax of the initial establishing episodes, the unlikely three, like a crypto-criminal Mod-squad end up as partners in the start up that they create to launch Izzy’s Gencoin.
GenCoin comes across as a kind of mini-Ethereum or alt-coin ahead of its time, and at the same time there is a dramatic interaction where the anti-government and grey-market potential and meaning of crypto is, albeit simplistically, superimposed on a critique of the social structures of the status quo.
Once again epitomized first by Miami corruption and criminal financial history as a way to underscore the desperate need, and also from the point of view of the show’s heroes, who decide to fight for a massive world changing digital transformation.
Though disconcerting at times, personal struggles and pain are superimposed over the passionate striving of the main characters
So, while all of this and the show in general, is dramatic with endless plot twists and great long-form character portrayals by the stars, particularly Ronald played by Edi Gathegi and Isabelle Morales played by Otmara Marrero, the correspondences that jump out during the show seem to emerge in strange and sometimes eerie ways.
For example, at one point they attend a huge “crypto convention” in Miami (first time in Miami after previously being held in LA) and, while they are not particularly successful in that instance, the size and stature of the show mirrors the conference that is happening literally as this article is being written (June 4-5, 2021) also in Miami (!).
While the BitCoin conference has been around since 2019, that year the number of attendees was only 1900 and is expected to be far more this year. While it is a coincidence that Miami was chosen in 2021 for the first time, it is a bit uncanny when watching a 5 year old episode where the exact conference is held in the exact location…
Another interesting corresondence has to do with events that transpire in the second and third seasons (spoiler alert). Through wild, dramatic twists and turns Gencoin is no longer the focus and the trio re-unite to launch a second tech project “Araknet” which is portrayed in the film as a kind of “dark-web 3.0 network”.
Interestingly, there are several very current projects that, while not directly a mirror of Araknet, have many of the same qualities and goals, though with less dramatic and sinister details. The biggest is that Dfinity and Internet Computer are trying to “extend”the current public internet network rather than launch a separate “private” Web 3.0 that has decentralized privacy at its core.
The DFINITY Foundation is a not-for-profit scientific research organization based in Zurich, Switzerland, that oversees research centers in Palo Alto, San Francisco, and Zurich, as well as teams in Japan, Germany, the UK, and across the United States. The Foundation’s mission is to build, promote, and maintain the Internet Computer.
One example is “Internet Computer” which is being developed by Dfinity, a start up in Switzerland. They are developing, in simplified terms a kind of blockchain based “internet 3.0” hence the cute catchy name.
Araknet promotional marketing from “StartUp” sounds again, bizarrely considering the time frame, like what you can read on the Dfinity web site today.
A slightly less direct correspondence is Helium. A project to crate a separate iOT network using long-range wireless nodes to create a decentralized wireless infrastructure.
The show emphasizes heavily the human drama and struggles of three special individuals as they try to find a path through a world of financial corruption, explosive technology changes and a disire to fight for freedom more so than individual wealth or power exclusively.
The show deserves its popularity and the attention it has been given. I would recommend it with the warning that the prophetic foreshadowing of today, while remarkable, is not the primary through-line of the narrative.
Norton has announced integrated Ethereum mining software
Norton Antivirus software, and the company that makes it, NortonLifeLock , best known for being bundled annoyingly in new Windows computers, has announced via press release that they intend to bundle a feature they call “Norton™ Crypto”.
The feature which they say will be added to Norton360 starting tomorrow for “early adopters” to begin mining from within the already installed software.
They are also, with a very helpful tone, declaring that they will also bundle an ethereum wallet which will be safely stored in “the cloud” so it won’t be lost.
They do not specify any minimum computing requirements but they do say that :
“Norton Crypto is expected to become available to all Norton 360 customers1 in the coming weeks.”
Yo’ dude this shit’s getting real
So, although this comes off as a somewhat desperate attempt to try and maintain relevance after likely millions of forced installations are never monetized (just a guess) it nevertheless could send millions of civilians into crypto mining without “just a few clicks”.
This brings up so many questions immediately it’s a bit mind-boggling. Although the first media reactions, predictably, mention “environmental” issues and take a negative tone, doubting why anyone would want to risk “taxing” the computer’s GPU for such a task.
Of course questions such as how mining efficiency would be affected by millions of “micro-miners” there is also the question of why wouldn’t a virus software subscriber want to essential use their idle computer resources to pay for the software itself (cut to happy Norton execs congratulating themselves on the genius idea).
Above:Photo Credit / Norton
Could there be another story here? Mainstream experience with crypto, demystifying the blockchain?
Further and more interestingly. If more mainstream software companies and even service subscription software companies follow suit and millions if not hundreds of millions of average people begin collecting small months ethereum “dividends”, even if only $10 per month, how easy is it to put the Genie back into the bottle, so to speak?
When millions are not “irresponsibly” using dollars or euros to purchase cryptocurrencies, but rather, instead “earn” a few extra dollars, once the coins are traded for local “hard” (read: fiat) currencies, here and there for each computer or GPU they own, can the whole thing, like green stamps, air miles, credit card loyalty program be suddenly outlawed?
As appears everywhere more and more on a daily basis, isn’t crypto, via Bitcoin, Ethereum and many various alt coins, become more and more woven into the financial system? Isn’t the number of people who own, buy or even mine crypto exploding exponentially on a daily basis?
Isn’t this just one more sign that the trend of crypto becoming “normalized” and woven more and more deeply into the fabric of our lives is not likely to reverse itself?
Yes. That’s the answer. More news tomorrow, probably.
The TikTok indicator is saying crypto is here to stay…
It was, astoundingly, less than a month ago, May 8th, 2021, that Ethereum reached an all time high of $4,169. That was two days after Dogecoin, full of Musk momentum, hit .69 cents, after starting the year around .10 cents. Bitcoin had peaked about a month earlier at $63,674 on April 12th.
As is so often seen in manias, bubbles and feeding frenzies, at the time you could not find a person in America who was not talking about crypto. The proverbial shoe-shine boy was now your cousin, your uncle even your grandmother and they were all bursting with FOMO after reading the articles, especially the ones about the Dogecoin millionaires, who had made fortunes starting with a tiny sum.
Now, many of those same people are seeing a typical reversal, correction, bear phase, whatever you want to call it, and they are just as convinced of crypto’s demise today as they were that it was a sure-thing less than a month ago.
The kids get it and are not backing down
Much like TikTok itself, the later arrivals to the huge phenomena that is Crypto are the old and out-of-touch, not the young and fast. Interestingly, an anecdotal survey of young and successful crypto “influencers” on TikTok and other social media are not shocked about the downturn. They get it.
Many have been learning about and actively involved with the crypto world for years. There is a real sense that the corrupt events that led to the financial crisis and near collapse in 2008 shaped their thinking and hardened their resolve to search for a better way. Crypto’s ideals and independent foundations have provided that in a real, tangible way, it seems.
While the mainstream of the media and the bulk of the financial establishment swing from an almost grudging respect to complete derision and rejection, it appears to be the underlying concepts and ideologies that present such a stark contrast in the perspective of up and coming generations.
While perhaps no less vulnerable to the excitement of 20,000 % gains and other sensational enticements, there is a somewhat surprising depth and resolve that is demonstrated in a level headed and clear thinking allegiance to the reasons crypto was created in the first place.
The outlandish price gains (and drops) are only window dressing
At the core of the question of crypto’s eventual widespread adoption and long term success lies a simple truth: fiat currencies and the governments that print them are a big problem for the world’s future. And, naturally, the new generations of the future will be those that are most affected.
What Elon Musk recently called “The true battle… between fiat & crypto” is one that Gen-Z appear to understand in ways that 100-year-old billionaires like Warren Buffet and his side-kick Charlie Munger do not. Or maybe they just side with the financial establishment they helped build, to the bitter end.
For any reading this that also “get it”, it would be wise to understand that, even at this early phase in the future of “the true battle” there is an army rising. It is not one of suicidal fossil fuels and battlefield tanks but one of ideology and belief in the possibility of a better way.
The army that will stand up for the survival and continued development of cryptocurrencies and blockchain and “DeFi” are not a few random conscripts, they are the generations of the future and they have chosen a side.
For that reason, all signs point to an unlikely permanent collapse of cryptocurrencies and an impossibility of banning or stopping them. It is already too late to prevent their eventual rise.
Above: Photo by Michael Krahn on Unsplash with elements added by Lynxotic
Coming after a frenzied run-up the hand wringing is no surprise
I many ways it seems as if Bitcoin and Cryptocurrencies appeared suddenly in 2021 out of the head of Zeus. Protean and fully formed, with billions and trillions in market caps, and all your sisters, brothers, cousins and even the Uber driver climbing aboard.
And the FOMO blog posts, where every hour an innocent reader is assaulted by a story, perhaps true, perhaps exaggerated and certainly foolhardy in retrospect, of an innocent putting their life savings into Dogecoin and suddenly having, theoretically, huge gains at their disposal.
Meanwhile, craggy faced, ancient stock market mavens would interject famous last words that now appear to be wise. However, all that notwithstanding, this week’s crash is nothing new or unexpected.
In reality, as can be seen from the graphic below, provided by Visual Capitalist, there have been so may crashes / corrections and doomsday prognostications since 2012 in Bitcoin that it seems like a miracle the there’s any thing such as Crypto at all.
There’s a reason it’s not dead and it’s in the DNA
The resiliency, far from a shock to those that have been around more than a fortnight, is kinda the point. When Satoshi Nakamoto built the system architecture of Bitcoin and since then inspired the over 8000 new crypto entities that have been developed, it was, just like the internet itself that was build to survive WWIII, supposed to be as indestructible as possible.
Like physical gold, which is considered have been adopted as a store of value partly due to its indestructibility and immutability (alchemy notwithstanding) the volatility and sometimes violent-seeming life story of Bitcoin is a necessary adjust to its role in finance, commerce and even individual monetary survival.
Not for the faint of heart, perhaps
While the mainstream and those forces opposed to the adoption or survival of Bitcoin and Crypto are out in force pointing to the “unsuitability” of Bitcoin and other cryptocurrencies for any “legitimate” use as a trade or savings vehicle, the progress so far, in spite of the obvious fact that volatility has always been baked in to the situation, is an obvious refutation of that viewpoint.
Will the current drop in dollar values relative to Bitcoin end it’s popularity and strip it of the respect it has thusfrar earned among many? In a word, no. In essence what is happening is, as many have foretold, what happens often and repeatedly, the excess attention and dollars that were pumped into crypto by you brother, sister, cousin and Uber driver are now getting blown out, since those were more speculation and psychosis than any kind of vote for viability or permanency.
And, why not? Where was to concern, shock and hesitation by the masses when the prices seemed to only rise for weeks and even months across so many products and coins it was impossible to keep count? Why was to feeding frenzy and the mania-like piling on not ignored as an anomaly?
The herd does as the herd will do. Diamond hands and Paper hands will ebb and flow as long as the rivers flow to the sea and humans herd like buffalo. And, in all likelihood, dollars and euros and yen will be long forgotten when the last bitcoin is transferred to the final wallet in the sky.
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Lynxotic does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
If you are stuck on the word ‘fiat’ this post can help you (everyone else too)
In a single, 14 word reply to a follower (@TheRealShifo) that asked “Yo Elon what do you think about the peeps who are angry at you because of crypto?” He gave a simple answer that is the often unmentioned, yet most important, question regarding crypto vs. fiat, government issued, currency such as the US dollar.
Looking around during the ongoing frenzy surrounding crypto and digital finance you’ll see countless ‘news” stories and blog posts comparing, or pretending to compare cryptocurrencies, especially the two biggest Bitcoin and Ethereum (as coin sometimes referred to as “Ether”) and they virtually always quote the “price” fluctuations of those coins as a certain number of dollars and cents.
Interestingly I have yet to see any of these “comparisons” use the reverse valuation method, such as, “the US dollar is currently worth .00002703 Bitcoin. Can you imagine everything using that as a standard – CNBC quoting stock prices in Bitcoin, your house is “worth” 32 Bitcoins (if you’re in California, for example).
The reason this comes off sounding strange and ridiculous is that all communication related to the US dollar, which has been a fiat currency since abandoning any “backing” (such as gold) and continuing on by decree (or fiat) of the government with no backing other than than decree, also carries a decree (tacit) not to undermine it in public.
So when Elon says:
“The true battle is between fiat & crypto. On balance, I support the latter.”
The true battle is between fiat & crypto. On balance, I support the latter.
Simple and straightforward and yet intentionally shrouded in mystery
Musk is directly comparing crypto, generally, and fiat currencies around the world that “float” against each other. And by inference, doing so in terms of the difference between a fiat currency like the US Dollar and a crypto currency, like Bitcoin.
A fiat currency is money that is not backed by a physical commodity like gold, but instead backed by the government that issued it. Most modern currencies, such as the U.S. dollar, euro, pound and yen, are fiat money.
from Wikipedia
The term fiat derives from the Latin word fiat, meaning “let it be done” used in the sense of an order, decree or resolution.
— common Definition
The fact that Bitcoin was created as a digital alternative to fiat money stands at the forefront of that point. The fact that it was designed precisely to counter the drawbacks and dangers of a system based on fiat paper money (or digital ledgers of those paper dollars such as your bank balance or any method to keep track of how many “imaginary” paper dollars you “have”) is exactly the real issue at hand.
photo credit: twitter
It’s no secret that many attack those goals and intentions superficially and dismiss the entire discussion with a wave of the hand. They willfully use the complexity of the cryptographic solutions, at the heart of cryptocurrency, as a way to gloss over the real and substantive problems being targeted.
They prey on the ignorance of the majority to try and discount out of hand any value at all for the movement and the various products.
Opening up the door to this exact exchange and characterizing it as a “battle” in one fowl swoop clarifies and simplifies the real issues and the real reason for the existence, and according to many, including Elon Musk, the need for monetary “reform” or change via a shift toward crypto.
Opening up the door to this exact exchange and characterizing it as a “battle” in one fowl-swoop clarifies and simplifies the real issues and the real reason for the existence of, and the need for, monetary “reform” or change via a shift toward crypto.
D.L.
The “price” of Bitcoin or any other crypto currency on any given day has almost nothing whatsoever to do with that debate.
Speculation abounds but not just in Crypto
The “price” is a function of, mostly, speculation and scarcity, due, in the case of Bitcoin to the mining cap, or at least a perceived scarcity. And additionally the various perceived advantages of crypto such as privacy, decentralization, use of block chain systems, etc.
But the price is like the smoke above the battlefield, not the reason for the battle or any indicator who is winning or who is on the side of might or right.
Two major questions that arise from this tweet and the potential shift toward a clearer and simpler dialogue on crypto are the following:
Is crypto generally, and Bitcoin / Ether more specifically established and entrenched enough to withstand the coming backlash from governments that feel threatened and other status quo institutions that will do whatever it takes to discourage or even stamp out crypto usage?
Will the very battle itself, that Elon Musk says is the current “true” battle, bring even more attention to the weaknesses and problems with the current fiat money system and thereby increase, perhaps inadvertently yet massively, the size of the battle and its stakes?
Alternative systems of trade have been tolerated in the US for some time now. How are those air miles doing? What about the chips and points for perks you got at the Indian Casino? Is it too late to outlaw all crypto without causing a revolution in the streets?
The other side of the (clipped) coin
It is truly surprising to see how little is to be found in the media about the deeper reasons for the rise of crypto. How it sometimes seems like direct criticism of fiat currency is almost taboo.
Naturally any internet search will find many “rabbit hole” sources for all kinds of information critical of the current monetary system, the same system the near total collapse of which in 2008 inspired the creation of bitcoin.
It appears that Elon Musk is emphasizing, in a subdued manner, exactly the way that the nonsense-furor over huge price gains or declines is completely missing the actual point. The “true battle”.
Many stories in the media and millions of private comments are currently following a kind of convoluted logic – first the popularity of crypto (which is linked to the unpopularity of the very messed up fiat system) artificially and massively increases prices in many crypto assets.
This “bubble”, a typical outcome of human herding behavior in financial markets, inevitably bursts or sees large setbacks. Then the coin or crypto system itself is blamed for the human stupidity and greed that caused the distortions of price, just like happened in the dot-com bubble and the 2007 housing bubble and subsequent crash.
The difference is that the crypto bubble, in an interesting way, is in reality due to a surge in skepticism toward fiat currencies, a boom in the prevalence of mistrust toward governments and a combination of fear and greed that is growing, not dissipating.
Although many have rightly criticized Elon Musk’s tweets and odd Saturday Night Live appearance, and there is a kind of mini-backlash (growing?) against all things Musk, in this case it is a healthy and wise tweet that we have shown above.
Reframing, or more aptly refocusing the discussion away from prices and speculative profits and back to the real reasons that cryptos were initially created and why it has gained such massive support is a welcome shift. That this reframing comes from the likes of Musk himself, is fitting and who better to put forth a message to simplify and clarify the nature of the real “battle” at hand.
The following video has some interesting data and arguments for, and mainly against, the fiat regime under which we have lived for most of the last century. Although, in a sense, a kind of advertisement for Gold and Silver, the overview is nevertheless accurate and does not exaggerate the dangers and issues that revolve around the fiat system.
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Lynxotic does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Odd facts that illustrate the world today where Elon Musk says BitCoin is “less dumb” than cash. He’s right. Cash also known a “fiat currency” is a piece of paper with a promise to pay on demand nothing in exchange when presented.
It does have a legal framework behind it, meaning you go to jail if you try to use your own version. There’s that.
The Tesla CEO said that investing in Bitcoin is a “less dumb form of liquidity than cash” after his company bought $1.5 billion of the cryptocurrency.
“To be clear, I am not an investor, I am an engineer,” he said on Twitter. “I don’t even own any publicly traded stock besides Tesla.”
The idea that Tesla and other companies are having concerns over the stability of cash, and concerns over the effectively negative interest rates in the mean time is clear.
Bitcoin may not be a solution that will be permitted by the Government (think gold in 1934). But a reckoning is a-comin’ and it will get interesting.
There is no doubt that Elon Musk is a genius who is doing great things. Perhaps it is his genius for finance that is most underestimated, however, considering his funding success throughout the years.
Some stats:
Regulatory Credits, aka, Carbon Tax credits, as per CNN:
It’s a lucrative business for Tesla — bringing in $3.3 billion over the course of the last five years, nearly half of that in 2020 alone. The $1.6 billion in regulatory credits it received last year far outweighed Tesla’s net income of $721 million — meaning Tesla would have otherwise posted a net loss in 2020.
“Based on our calculations, we estimate that Tesla so far has made roughly $1 billion of profit [on Bitcoin holdings] over the last month…To put this in perspective, Tesla is on a trajectory to make more from its Bitcoin investments than profits from selling its EVs in all of 2020…” source: Wedbush’s analyst Dan Ives
SpaceX income in U.S. Gov contracts and subsidies:
LA times estimated that already by 2015 Various Musk led businesses took in over 4.9 billion in government income:
“Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., known as SpaceX, together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times. The figure underscores a common theme running through his emerging empire: a public-private financing model underpinning long-shot start-ups.” – LA Times
“The research note titled SpaceX: Raising Valuation Scenarios Following Key Developments, listed the company’s recent $1.9 billion funding round and the “continued momentum in winning government contracts” (mainly from NASA and the U.S Department of Defense) as key reasons for its revision of SpaceX’s value. The note doesn’t bother to mention important financial details like SpaceX’s current revenue or estimated revenue for 2020 or even 2021. Or whether SpaceX is profitable or not.”
According to @elonmusk "Bitcoin is almost as BS as fiat money." So Musk regards both #Bitcoin and fiat as BS. I agree, I just think Bitcoin, which is digital fiat, is even more BS than the paper fiat issued by central banks. #Gold is not BS. It's real money and better than both!
