The Russian-Canadian citizen and co-founder of the Ethereum blockchain, Vitalik Buterin took to this social media minutes after Putin’s announced a “special military operation” and effectively go to war with Ukraine. Buterin condemned the Russian President on his Twitter, see the below translated post.
Translation of the post from Russian: Very upset by Putin’s decision to abandon the possibility of a peaceful solution to the dispute with Ukraine and go to war instead. This is a crime against the Ukrainian and Russian people. I want to wish everyone security, although I know that there will be no security. Glory to Ukraine.
Vitalik also included that although his company remains neutral politically, however as a human being, Vitalik has taken a personal stance on the matter. This is another example of Russian born international citizens speaking out loud and clear against Putin and his attack. (Buterin was born in Kolomna, a city near Moscow, in 1994. When he was just six years old, he moved with his family to Canada)
Очень расстроен решением Путина отказаться от возможности мирного решения спора с Украиной и вместо этого начать войну. Это преступление против украинского и русского народа.
Хочу желать всем безопасности, хотя знаю, что не какой безопасности не будет.
Bitcoin and Crypto’s reached a major turning point: why is cryptocurrency worth anything?
In a recent interview clip Jack Dorsey quietly states his opinion on the difference between people who “get” blockchain and crypto, and those that will forever be married to the past:
This is the simply stated portion that says it all:
“People who have questions in the world, people who have curiosity (and are) recognizing that the current systems, wether they be corporate financial systems or the government financial systems just aren’t working for them…”
Although the context of his statement is regarding bitcoin as the native currency for the internet, and in particular how people are responding to the fact that financial systems “just aren’t working for them” it is, nevertheless, a perfect statement of how the world is changing.
It has already changed into two distinct groups: those that are clinging to the status quo, since it has worked very well for them, and those that want to find a new and better way, because, in most cases, the current system did not work for them.
It’s important to realize that this statement is not coming from a disgruntled outsider, but from the hugely successful founder of Square, now called Block.
The fact that a large group of highly successful business leaders, such as Jack Dorsey and Elon Musk, although benefiting massively from the current financial systems, are at the same time embracing a new way of thought and action for the future, is at the crux of the issues addressed in this post.
Buffet vs Musk & Dorsey and the zero sum mindset of Malthusian Capitalism
There is a war waging between those that are open to, and welcoming of, bitcoin, crypto, blockchain, DeFi and other new financial innovations and those that reject all of it and would like nothing more than to see it stopped, by any means necessary.
The derision, insults and disdain lobbed at bitcoin, crypto and anyone that believes in them, by the “old guard” epitomized by Warren Buffet and Charlie Munger are now well known and documented:
A few quotes:
“Probably rat poison squared.” — Warren Buffett in Fox Business interview at 2018 meeting
“I think I should say modestly that the whole damn development is disgusting and contrary to the interests of civilization” – Charlie Munger vice chairman at Berkshire Hathaway
“I certainly didn’t invest in crypto. I’m proud of the fact I’ve avoided it. It’s like a venereal disease or something. I just regard it as beneath contempt.” – Charlie Munger vice chairman at Berkshire Hathaway
Interestingly, if you look deeper at the interviews and quotes, you’d see that, in spite of the headline grabbing hyperbole, it’s the price speculation that is at the heart of the criticism.
The comments that crypto and bitcoin “don’t produce anything” are ridiculous on their face, as if the fiat dollar “produces” products, services or anything else.
Oh, wait, the dollar does “produce” inflation (loss in value), and has done so very dependably over the last 100+ years.
Take a stat so well known that it is almost a cliché, any way you put it: a 2013 U.S. dollar (the year the federal reserve was created, not coincidentally) would be worth more than 16x what a dollar is worth today. One has to ask where that value is now?
Bitcoin, however, has over time only gained value. A lot. If bitcoin is rat poison, maybe the fiat system and the federal reverse are the rat?
100 year old billionaires are, aparently, not inclined to speak from enlightened self-interest. Or, to be kind, perhaps they are blinded by the success they enjoyed in a system that favors anyone at the top of the pyramid, one built on value theft?
One very big caveat, however, is clearly that the “everything bubble” is bursting, price speculation always ends in price crashes, and the massive gains in the value of various cryptocurrencies are a symptom of a larger systemic emergency, rather than a quality inherent to crypto itself. There’s that.
The gap between this kind of thinking vs. that of the forward looking cryptocurrency proponents, and what they consider to be positive innovations, is vast. In a time where divisive thought is nearly ubiquitous this is not news.
However, the fact that the legions of those that “get it” are as large as they are, and that they are constantly growing, has clearly taken the debate past the point of no return.
To get the full view of this divide it’s important to look also at just how the nearly 100 year old duo of Buffet & Munger got to be the “legends” that they are.
All the best known names they are associated with, from the initial Berkshire Hathaway purchase in 1962 to more recent investments in companies such as CocaCola, GEICO Insurance, RJ Reynolds Tobacco, Sees Candy, Clayton Homes and so on, paint a clear picture of extreme hierarchal and exploitative capitalism that is solely based on making themselves and shareholders rich, and doing it on the backs of consumers.
In an example of the thinking of those that do not worship the duo, in The Nation, David Dayen wrote: “America isn’t supposed to allow moats, much less reward them. Our economic system, we claim, is founded on free and fair competition. We have laws over a century old designed to break up concentrated industries, encouraging innovation and risk-taking. In other words, Buffett’s investment strategy should not legally be available, to him or anyone else.”
Exactly this kind of double standard, corrupt to the core, is built on systemic greed founded on a Malthusian “zero-sum mindset”. This is what has led millions to conclude that the system just isn’t working for them.
Being championed ad nausea for this lifetime of “achievement” is part and parcel of the status quo that many, from many in the 99% to the “nouveau 1%”, such as Elon Musk, Jack Dorsey, Vitalik Buterin and many others, are actively seeking alternatives to.
That distinction, being rich and powerful and yet not satisfied with the legacy of corruption and greed, is at the heart of the new wave of thought that has made bitcoin, crypto and DeFi a force to be reckoned with.
Moreover, seeing the state of the world that centuries of this kind of thinking has engendered, it’s natural for the young and more enlightened to want to search for other ways for things to work, ways that perhaps champion something other than monopolistic greed and exploitation.
In a recent Interview Elon Musk addressed precisely this issue – how many in the current system are focused on prospering at the expense of others and maintaining a zero-sum mindset. In the clip he outlines how important it is to understand the failure of that approach.
The idea that crypto will disappear is wishful thinking by those that cling to the systems of the past
A clip of Harrison Ford speaking at the Global Climate Action Summit was banned on some platforms as incendiary. Why? Because he passionately accuses those that are financially linked to fossil fuels of working to spread disinformation and misinformation, in order to perpetuate their massive incomes, even while the planet is on the brink of climate disaster.
Blocking this opinion, from a rich and famous film star, no less, is typical in the way that the established system works to suppress the idea that you should do anything about the fact that “it’s just not working” for you.
This is the same divide, mentioned above, that is nearly all pervasive today, but will never stop innovation in thinking about financial systems. It will not stop DeFi or DAOs or crypto or bitcoin.
It will not stop sustainable energy from becoming an ever bigger part of the world’s energy infrastructure. The point of going back has long since passed.
How money works according to Musk
Jack Dorsey has an understated and somehow “quiet” way of expressing revolutionary ideas. Elon Musk, on the other hand, is well known for controversial and flamboyant statements, and especially tweets.
But to get a taste of just how radical his thinking really is, particularly to those that disagree, you have to dig deeper into lengthy interviews, such as those with Lex Fridman, where he reveals his thinking more specifically on money, crypto and the governments role in the system of money.
Coming from the wealthiest person on earth, some may find it odd, yet his thoughts on crypto vs fiat money are well documented. It’s just this kind of stance, taken by so many in the “new” establishment at the top of the current financial pyramid, who also see the necessity for change toward new ideas and systems that can so away with the worst of the status quo, well represented above by Buffet & Munger and other “crypto haters”.
Government is a corporation in the limit
In yet another interview excerpt, Musk goes even deeper into his belief that – in his exact words: “if you don’t like corporations should really hate governments”
While this particular statement arose out of a spat with Senator Elizabeth Warren regarding taxes, the overall concept of challenging the status quo and the, clearly failed, systems perpetuated, remains in play.
Web3, and how Web2 and legacy financial structures are linked
Although fraught with infighting – the typical bitcoin vs. Ethereum vs. Doge vs. Shiba Inu internal debates and criticisms are not on the magnitude of the division between those that generally support and benefit from, for example, status quo financial structure and fossil fuel business, vs those that favor Blockchain and Sustainable energy.
Further, the spirit of the clash between Web2 and Web3 rests not on the tech or the systems themselves, which it can be argued are the same, but on the beliefs and intent of each camp.
The surveillance capitalism business models of web2, epitomized by Facebook and Google are diametrically opposed to the spirit and stated goals of web3, just as bitcoin was created out of a time that, not coincidentally, corresponded to the 2008 crash and crisis born of the greed and corruption of the legacy economic establishment.
There are two distinct camps that have emerged.
Those, such as Tesla and Elon Musk, that reject the traditional holy grail of shareholder value and instead embrace, for example, a more enlightened mission “to accelerate the transition to sustainable energy”. This aligns with any individual choosing the support crypto as a “Hodler” or at least believer, vs. those that support the legacy systems of finance, the fossil fuel industrial complex and Web2’s exploitative business model.
This divide is the ultimate test of our time and it will only grow in stature and importance.
The correspondence between forward looking innovation in all human thought, communication and action is already too big to stop and cannot be wished away.
There will undoubtedly be setbacks to these new directions, and there will be attacks using more than insults, such as those quoted above, but the time for the unstoppable force to be quelled is long since past. Coke and a smile? No thanks.
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.
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.
Haters like Buffet and Mark Cuban’s cheerleading are off base and spreading confusion
Disclaimer first: This opinion article is not investment advice and does not advocate buying any investment vehicle or currency
There are so many misconceptions propagated far and wide these days that it’s hard to choose a place to start. First it’s important to recognize that crypto currencies are not stocks or companies, yes that’s obvious but one of the biggest “anti” argument these days is that there’s an absurdity to the aggregate total value of a “coin” being more than the market cap of the stock of a particular company.
“Ethereum is now worth more than Bank of America”, this nonsense comparison goes, as if the market cap of a stock and the price of a coin times the number of coins in existence has any meaning whatsoever.
Following this logic, however, beneath all the hype, both pro-crypto and anti-crypto, lies a hidden thread to an actual underlying truth.
Though based on obvious common sense, this thread is potentially confusing and convoluted, to say the least. But without seeing it clearly the misconceptions will just keep getting more ridiculous.
In order to illustrate the conundrum a bit of background is needed. For example:
Stocks, in the US are priced in dollars. But how are dollars priced? Isn’t just as accurate to say that when the “price” of the DJIA moves higher (3,4050 at this writing) it is the value of the dollar, in relation to the DJIA that went down?
While this requires a kind of mental gymnastics, these are only due to the constant bombardment meant to keep you from seeing this 100% valid way of viewing stock valuations based in dollars.
There’s another kind of tacit misinformation and that is stating that “inflation” is only relevant when it’s measured by the government. For example if the “bull market” that began in 2009 and continues into 2021 represented a huge increase in stock prices, that is asset inflation.
The inverse of asset inflation is a reduction in dollar value. Less shares of a given stock can be bought for the same number of dollars. The dollars are worth less.
And further, crypto, such as BitCoin is measured as having more or less value in dollars. Who is to say the massive rise in the dollar “value” of BitCoin is not representative of a decline in the “intrinsic” value of dollars.
The truth is often hidden in plain sight and that is what drives traditional markets
And that is precisely the point. BitCoin’s existence, which is locked in the mind of Satoshi Nakamoto (if he indeed exists) was indicated cryptically (no pun intended) to be a kind of answer to the instability of the global financial system as was evidence in the crisis of 2008. Taking place nearly concurrently with the birth of the idea of BitCoin.
Seeing the dollar as having a “stable” value and measuring a companies value, via it’s share price, is, let’s just say, perhaps 100 times more absurd than the Dogecoin dog.
Why? Because, for nearly a century the dollar is not backed or moored to anything but the government’s hope that it will retain value and laws that prohibit you and I from using other vehicles as “legal tender”.
The data (and opinions) on this are seemingly endless and yet absolutely critical to understanding our monetary system and where crypto may or may not fit in.
Horseshoe Nails and The Isle of Yap
Many interesting historical facts point toward the reality that money and coinage has always been just as much about the abstract belief in the system, more than any particular “intrinsic” value.
On the Micronesian Isle of Yap there was a functioning monetary system based on huge stones. A New York Times article, published in 1971 described the curious system:
“Every piece has an owner, and everyone knows who the owner is. Even when the money changes hands, it usually stays put. Yapese stone money is the largest and heaviest “coin” in the world.
In earlier days, brave islanders paddled by canoe 300 miles across open ocean to Palau where they cut slices from huge stalactites and brought them back as money. The value depended on how many men were drowned bringing them back. Nowadays, value is usually determined by measurements. We heard various versions, ranging from $10 radial inch to $42 a foot.”
Another article explains that many “wealthy” home (hut) owners displayed their money by leaving it leaning against the front of the house, where all could see the prosperity.
And, as for the prevention of fraud and corruption in any monetary system? Could any be more corrupt than the one that led to credit default swaps and mortgage-backed securities imploding and all the BS that nearly brought down the world’s banking system?
And that is not new either. In the 1800s traveling bank examiners journeyed throughout the US to check on the gold reserves claimed by various banks. More often than not, they found far less gold than was claimed (in today’s fractional banking system little attempt is made to reduce the leverage in the system).
A common, clever, trick to try to “leverage” what little gold was actually on hand was to pile gold coins and ingots on top of a bed of horseshoe nails, hoping that the examiner would weigh the entire concoction only, and never notice the bogus hidden attempt to bolster the weight.
Bitcoin’s system at least attempts to circumvent this typically human brand of fraud and corruption.
In the article “What is Cryptomining” on Techspot a chart was published to illustrate how Satoshi Nakamoto tried to solve the classic trust delimma with the proof of work mining system.
“For example, if Alice has $100 at the beginning of the day, she could promise Bob, Charlie, and David independently that she’d send them each $100 by the end of the day. While Alice could show them that she owns $100 and they’d all be content and agree to the transaction, Alice only has $100. Thus, if at the end of the day, the public ledger (which once finalized is set in stone, so to speak) includes 3 transactions initiated by Alice for $100, the system would be broken and no one would want to use it.
With a centralized system such as in modern day banks, there would exist a single ledger that can validate how much money a certain individual has, and thus it can guarantee that the customer cannot spend more than they own. When talking about a decentralized, peer-to-peer system, however, who’s there to stop a clever individual from spending their money multiple times quickly before getting caught?
To address this potential issue, crypto miners enter the playing field. Essentially, miners play the role of the decentralized banker, and will perform the required gruntwork to ensure that the system is functioning as expected without double-spending. In return for their work, they will be rewarded with some cryptocurrency.”
Buffet, Cuban, Musk & Munger
In clonclusion, Buffet, Munger and The Wall Street Journal may have knowledge and experience but they have also derived benefit from a system that favors those already holding capital, one that also has a tendency to crush those trying to build it.
So, it’s fairly obvious that they are “talking their book” and data mining to produce a self-congratulatory outcome, when they expound on all the reasons that they hate crypto (Munger even called it “disgusting”).
As for Musk and Cuban, what’ve they got to lose? At least they “get it”, at least they are open to the idea of a future that has crypto as a part of the financial system. But where will they stand if there is government resistance in a big way, and if attempts to stop the entire crypto movement or “de-fang” it in ways that make it less viable as a true alternative to the status quo? That, my friend, will be the 1000 BitCoin question.
