Do you want to make more money? Sure, we all do! And since the means of eking out even a subsistence living are increasingly being doled out to refugees, repatriates, and robots, why not ditch that lemonade stand and hop on board the Bitcoin rocket, like all the hepcat investment gurus are doing? From a price of under $2000 at the start of 2017, this greatest thing since tulips or pet rocks has unprecedentedly increased tenfold, standing at nearly $20,000 in the middle of December. Sure, as of Dec. 21st it began a seemingly precipitate $5,000 slide, prompting Peter Schiff to advise jumping off the train, as Bitcoin’s value as an alternate means of exchange is compromised by its being ‘too slow, too expensive, and too vulnerable’. Who you gonna listen to: the guy who accurately predicted the subprime meltdown, or crypto-currency bug Marcus Pittman, who assuaged his followers’ fears with the Warren Buffett-like adage ‘Free markets are volatile’? And you don’t think he’d heedlessly risk Apologia’s Mountain Dew-pizza-and-Oreos slush fund, do you? Perish the thought!
In all seriousness, I too was intrigued by Bitcoin’s possibilities when it first began making a serious mark five years ago. A currency beyond the Fed’s control, freely generated, freely traded, and out of the hands of the taxman? Tempting, if more than a little utopian, perhaps. And there can be little doubt that it does have some potential – as a hedge against the collapse of the petrodollar, if nothing else. Still, there is also little doubt that the current razzle-dazzle pumping insane quantities of air into this fragile balloon also underlines some inherent weaknesses in the entire concept – and some troubling questions for Christians. Let’s briefly touch on a few such issues.
- Bitcoin’s Underlying Value is Murky. At best.
If you were to ask twenty-five adherents of Bitcoin what the currency’s inherent worth is, you are likely to receive fifty different answers. (They’re a little fuzzy on the whole concept themselves.) In its early days, the answer seemed to be ‘the inerrant and immutable laws of mathematics’. As it is a little difficult to purchase a compound in Wyoming with the Pythagorean theory, though, this rationale was quickly scrapped, and no satisfactory explanation has ever replaced it. The common consensus now seems to be that which I saw from a Fox News analyst a few weeks back: ‘Bitcoin has value because it is perceived as having value.’ Or, as zerohedge recently put it: Bitcoin serves as the gold of the Millennial generation because, quote, ‘central banks cannot print it’, yet is more appealing to them because, quote, ‘gold is analog while Bitcoin is digital’.
You will forgive me if this does not sound like the attributes of the coin of the realm to me. While its disciples will hotly contest it, Bitcoin’s lack of a generally agreed-upon real-metal value renders it as much of a fiat currency as any Monopoly money backed by the empty promises of the issuing government, and nothing more. To the layman, there is little to differentiate Bitcoin from a Paypal account crammed full of dollars, yet unlinked to any brick-and-mortar bank account. Given God’s injunction against the use of ‘divers weights and measures’ in His law, this should be especially problematic for Christians – not the least because, as Bitcoin is supposedly a currency but is being traded like a commodity or a trendy stock, it isn’t exactly clear whether Bitcoin is a weight, a measure, or neither.
- Where is Bitcoin’s founder?
You are the creator of a crypto-currency whose astronomical climb in large part has driven the much-lauded ‘best year ever’ for stock and money indices across the board. It has been declared the ‘wave of the future’ by everyone from Bill Gates to Peter Thiel. Why aren’t you an instant media celebrity, appearing on every talk show on the planet, making the short list of Time’s Man of the Year, cameoing in movies and TV shows, etc.? Well, perhaps he’s an introverted sort who cherishes his privacy. I can understand that. Wouldn’t you at least try to release a statement or two over your creation’s performance, owing to pride in your work if nothing else? Instead, Satoshi Nakamoto, Bitcoin’s alleged creator, has only been seen in public on very rare occasion and has denied having any involvement with the currency at all. Perhaps this adds to Bitcoin’s decentralized mystique in the eyes of investors. To me, it suggests either a Howard Hughes level of lunatic reclusiveness, or a conspiracy of silence with onerous connotations. And neither scenario fills me with confidence.
- If Bitcoin is all that and a kettle of fish, where is George Soros?
Bitcoin is such a viable alternate means of exchange that it is worth more than its peak price of $20,000, its boosters herald. That being the case, why hasn’t George Soros cornered this lucrative market yet? Currency trading and manipulation is his stock in trade, after all! ‘Well, he’s almost 90! He merely has no interest in getting richer!!’, the boosters counter. No, that won’t fly. This destiny-grubber would never pass up an opportunity to consolidate his infernal power yet more fervently. As the motivational posters put it: ‘Chase the dream, not the money!’ Let us wait and see if he’s sitting on a Bitcoin short he’s planning on making public to send the price tumbling down directly into his lap.
- The Fallacy of Bitcoin ‘Mining’
Apparently realizing that the elegance of Bitcoin’s faith-based system might be lost on some boorish skeptics, proponents enthuse about the process of mining to increase the monetary supply. Put simply, after purchasing specialized hardware, a Bitcoin miner solves deliberately difficult and time-consuming math problems. At the problem’s correct completion, he is awarded a set number of Bitcoins for his troubles, and the entire process is linked to the Bitcoin ‘blockchain’, thus creating a supposed basis of value and reliability. This sounds fantastic…if you have a doctorate in applied mathematics yet have only held part-time stints as a Starbucks barista since 2010. The uninitiated might see little practical difference between this practice and an old wildcatter computer simulation game. Well, scratch that: the computer game at least doesn’t consume as much power as a midsize European nation does in a year, nor does it throw off so much heat in the process of operation that it can be used to heat Siberian houses in the winter. (Bitcoin proponents see this last point as an asset, as a non-fossil fuel source of thermal energy. I sit here shaking my head sadly and hoping they change the batteries in their smoke detectors regularly.) The process also seems open to fraudulent claims of mining completed, especially in the non-hardware-driven Cloud. All in all, the process seems best designed for hipsters who want to claim they know all about what blue-collar work is with a straight face.
Don’t have thousands of dollars in the mad money fund to purchase one Bitcoin? No problem! Just plunk down a couple hundred bucks and buy yourself a sliver of one, as each individual Bitcoin can be split into a hundred million separate pieces. Hmm – haven’t I heard of this practice before? Oh, yeah: that’s what Lehman, J.P. Morgan, Goldman Sachs, et al. were doing with their toxic assets, and bundling the resultant oleo into derivatives. And just as it only took a sliver of devaluation on the worst of those assets to send the entire ponzi scheme into freefall, so too would it take only one portion of a counterfeit crypto-currency for the market to reverberate with panic and collapse overnight. But that won’t happen this time, because….well, you just gotta believe, is all! Even barter systems need systemic confidence to function properly, ya know!
One of Bitcoin’s fundamental problems as a measurement of wealth is that for all practical purposes, it lacks the physicality of a base metal. As zerohedge put it, in the article posted before: ‘Ownership of Bitcoin doesn’t give you ownership of the technology. I, without a single Bitcoin, own as much Bitcoin technology as someone who owns a million bitcoins; that is, exactly none.’ And thus we are back into the realm of fiat currency again. Unless you own the printing press, you’re leasing that dollar, not owning it.
- (((They))) love the concept.
Though Lloyd Blankfein, Goldman Sachs CEO, warned against the potential for Bitcoin fraud at the end of November, the phenomenal returns that followed shortly thereafter were apparently sufficient for him to change his mind entirely and announce that GS would open a Bitcoin trading desk a mere three weeks later. As they operate as the financial industry leader, it is fair to assume that the other investment banks are making similar plans to follow in their path, the reservations from the likes of Morgan Stanley to the contrary. And while it’s true that Israel recently prohibited the trading of Bitcoin on its stock exchange, the reason they did so appears to be because they have plans of introducing a national crypto-currency of their own – the key difference being that this one would be ‘centralized’, according to the linked article. If I had to wager a guess, I would say that this digital shekel would also do double duty as a particularly virulent form of malware. But I digress. Jumping the shark on this worthy endeavor, a (((Russian entrepreneur))) has recently introduced the first crypto-currency designed exclusively for Judaic use – the wittily named Bitcoen! I guess Israel will have to name their competitor ‘Briscoin’ or something in response.
And why wouldn’t Jews in general have a massive Tribal-crush on Bitcoin and its variants? It’s easily transferable to an almost pathetic degree. Most important of all, it coincides (cohencides?) perfectly with the transnational, border-free, ethnically muddied, culturally unicameral gulag both libertarians and Trotskyites have been lusting after for decades now. Where gamuts for international consolidation from fractional reserve state banking to the United Nations have not been able to entirely close the deal, perhaps cryptos will be able to do so.
In closing, while it is not my intention to dismiss the potential of this technology out of hand, it well behooves us to observe the current maelstrom from the sidelines until things simmer down considerably. If it’s on the radar, rest assured there’s chicanery afoot. As Ron Paul recently put it in a cautionary article:
I look at the problems we face. I think they’re gigantic and people are desperate and looking everywhere. Why would they buy bonds that pay negative interest rates? Why would they buy stocks, and say, well this time it’s different? Cryptocurrency is a reflection of the disaster of the monetary dollar system.
But what does that ol’ sourpuss know, right? Far more preferable is the bovinely supine and meatheadedly enthusiastic psalm of praise from that Nobel-winning economist Dr. Pittman, posted on Facebook on Dec. 11th:
I imagine the Bitcoin chart looks a lot like the peaks and valleys of the sanctification of the world in time and space. Many deep and dark valleys but always upward momentum.
Awww! That warms my heart almost as much as my mining software warms my basement!! Buy, buy, buy!!!