Bitcoin Is A Faith-Based Religion

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Posted: Jan 03, 2020 10:16 AM
Bitcoin Is A Faith-Based Religion

Source: AP Photo/Gillian Flaccus

Bitcoin is a free market construct. But it is primarily based on faith.

China Crackdown

In Bitcoin Sinks Below $7000 on China Crackdown I posed this issue.

If and when central banks crack down on digital currencies it will be lights out. People keep asking me what can central banks do. The question should not come up as the answer is obvious: ban transactions in Bitcoin.

If the US banned bitcoin transactions, people would still have their digital coins, but they would effectively be worthless. One could not buy anything with bitcoin other than barter transactions. There would be no way to get money in or out, at least in the US.

To that I have countless replies along the lines that Bitcoin is decentralized so my idea is preposterous.

If governments ban transactions in Bitcoin does one get money in or take it out? OK you still have your Bitcoins, but what the hell can you do with them?

No one has answered my questions. They just tell me it can never happen.

I have been asking simple questions for years. None off the bitcoin true believers has given a satisfactory answer.

Question of the Day, Month, Decade

Peer-to-Peer

So far, peer-to-peer is the only answer.

OK but that presumes one can find a person willing to barter who has what you want and is also willing to hold more Bitcoin in exchange.

But how does one sell for cash?

Understanding My Message

Failure to Understand

Even if one manages to get money out via the black market in some illegal transaction, how does one get the money in a bank when they are likely going to hove to explain what they are doing with amounts of cash over $10,000.

Millennial's Fake Gold

Vitaliy Katsenelson calls Bitcoin the Millennial's Fake Gold.

Reflections on Hindsight

Katsenelson poses similar issues as mine, notably, "Governments tend to look at Bitcoin and other cryptocurrencies as a threat to their existence. First, governments are very particular about their monopolistic right to control and print currencies – this is how they can overpromise and underdeliver. "

But this is my favorite line, "It is crystal clear to me, with the benefit of hindsight, that I should have bought Bitcoin at 28 cents. But you only get hindsight in hindsight."

Faith-Based Prophecies

Faith-Based Rationale

On what are those $1 million to $4 million projections based?

  1. Price Follows Hash Rate
  2. Alleged scarcity
  3. Central Banks and Governments are Powerless to Stop Bitcoin

Yet, no one has properly addressed point number three.

Price follows hash rate is a proven joke, yet it came up again today.

Hash Rate Hits Record

CoinTelegraph via ZeroHedge commented

Bitcoin Kicks Off 2020 More Secure Than Ever As Hash Rate Hits Record

Commentators, including Keiser Report host Max Keiser, have also claimed that hash rate highs will ultimately produce new Bitcoin price highs.

That's more misplaced faith. Price hasn't followed the hash rate for years.

Central Banks to the Forefront

The issue of central banks came up again today.

Please consider ECB’s Weidmann Urges Euro-Area Banks to Battle Facebook’s Libra

European Central Bank policy maker Jens Weidmann called on banks to come up with cheaper and faster systems for transferring money to combat alternatives such as Facebook Inc.’s Libra, and said there’s no pressing reason yet for the ECB to develop its own digital currency.

I’m not in favor of always immediately calling on the state” to come up with solutions, Weidmann said in an interview with German newspaper Handelsblatt published Thursday. “In a market economy, it’s up to companies to develop products that meet customer demands.”

Weidmann, who heads Germany’s Bundesbank, has long called for caution over private-sector digital currencies and his comments echo concerns among officials from Europe to the U.S. over Libra, a planned digital token backed by multiple national currencies.

Weidmann Translation

In case that was not obvious, I offer this proper translation: "I am immediately calling on the state to deal with the threat of cryptocurrencies".

ECB President Christine Lagarde and BOE Chime In

ECB President Christine Lagarde -- in common with Bank of England Governor Mark Carney -- has said central banks should consider whether it makes sense to launch their own digital coins, and she may make that question part of a wide-ranging strategic review planned to start this month.

OK, believe what you want, and you will, because if you are a true believer, Bitcoin is now an act of faith.

Meanwhile, the ECB and BOE flashed another warning card today.

Not to worry, you still have peer-to-peer bargaining.

No Faith in Fiat

Method of Central Bank Attacks

Addendum

Change the title to remove faith-based Global Warming. Created too much of a sideshow.