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Bitcoin: A False God

Updated on April 19, 2017
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I love Bitcoin -- the idea -- but not as money. A a functional form of money, sure.

I just wanted to get that out there. In case you think I'm bashing it. I'm not. I'm just bashing the idea that it is actual money. And hoping to save a lot of people some money-ache.

The Future is Near?

You will be using cryptocurrency, maybe even bitcoin, whether you like it or not -- in the not so distant future. At least that’s what Frisco d’Anconia implied in The Coin Telegraph piece titled: “Ex-advisor in Brussels: Cryptocurrency Mass Adoption Slow But Unstoppable.”

Frisco d’Anconia had a “chat” with Matthias Klees, “a founding member of LocalCrypto.”

But before I go there, I need to tell you that Frisco d’Anconia is more than likely a reference to “Francisco Domingo Carlos Andres Sebastián d'Anconia,” a fictional character in Ayn Rand’s novel, Atlas Shrugged.

Pseudonym

It’s an interesting choice of a pseudonym, since the fictional character was a child prodigy who inherited his wealth, but could have made his own way and later bankrupted the family business in order to keep it out of the moochers' hands. Moochers being the socialistic governments like those currently dotting our globe.

Back to the thrust of this article. Integration. Mass adoption, but without critical examination.

So let us criticize. Isn't all of Bitcoin just a pseudonym?

Source

Geo-Location?

Matthais Klees is apparently working on the integration part. He and his group are attempting to assist with the acceptance of bitcoin and cryptocurrency by utilizing geo-location services.

In other words, the first step in using cryptocurrency is to locate a shop or service that actually accepts this form of payment. Hence the location angle.

It’s a bit like putting the cart before the horse, however. Driving mass adoption, by spreading the word. This form of marketing can work in the long run, provided the products are useful, but as of press time, cryptocurrency is a volatile and unstable as ever. They are “iffy” at best. It’s like fiat-fiat currency.

Sales Pitch

So what is Klees selling?

In a sense then, people like Klees and promoters the world over for that matter, are selling the “snake oil” in hopes that one day soon it will magically morph into gold dust. This, they imply will work better, if you simply adopt and “mass adoption” would be better.

Hold the juice, please. I need my Vitamin C. I call it Vitamin “Clarity.”

Shallow Grassroots

A grassroots movement using social media and even a wide range of consulting efforts will not bring cryptocurrency into the mainstream, if the underlying service -- the cryptocurrencies -- continues to falter. In that sense, the prognosticators of plenty, those who foresee a new world using some version of a blockchain based payment or service system may be preaching. They may be going on “faith” or blind belief.

Decentralize

Some will say that cryptocurrencies are not faltering, but have, at least in 2016 and a bit of 2017, soared to incredible heights...and then sunk again. Volatility. Great for day-traders, but downright rotten for currency. To state otherwise is disingenuous.

And is that not the point of cryptocurrency? To replace or at least compete with state fiat currencies? Or are you on the side of state adoption?

The decentralization goal, as Klees implies, should be our focus. To keep ourselves pent up in our respective regions -- he means countries -- even if this is the most modern form of decentralization in our societal constructs of today is passé. This over generalization appears to be as vague as the article itself.

Just what does Klees or for that matter, what is Frisco d’Anconia implying? If I were a gambling man I would say both are referring to a future border-less world where value in the form of cryptocurrencies are readily and cheaply exchanged between world citizens.

No, I didn't say “New World Order.”

Source

Perhaps there is a less dubious distinction here. Perhaps Klees foresees a decentralized world monetary system, one lubricated with cryptocurrencies, exchangeable via automated decentralized blockchains of both the public and private flavors. In that manner, the regionalists, as Klees labels them, maintain their respective autonomy, but do not control all of the purse strings of all of the citizens.

Not so fast.

The next rub, as it were, always seems to come in at “decentralization.” That keen buzzword. Does it remind us of something else? Maybe we could substitute another word? How about “faith?” Meaning, to blindly believe that decentralization is like a healing balm that will mystically make everything alright.

Decentralization is one of the false pillars of cryptocurrency. We are reminded that it’s just great. It is strong, able to withstand earthquakes and 51% attacks and hacking, but are we really convinced? How many times has bitcoin been tweaked or forked, for example? Who runs bitcoin or Monero? Is the software -- the code -- solid?

It is bantered about, argued about constantly in the Cryptosphere and then it’s just set aside as gospel. The sobering fact is that these systems, though appearing fantastic, promising privacy, acting like cash, are in no way perfected. They are not even decentralized in the true meaning of that idea.

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Fewer Nodes!

When many people think that bitcoin is decentralized, they misunderstand. You are not in complete control. That software, if you care to download it and keep your computer on for a week doing so, does not give you complete autonomy.

You are merely a link, a node among the dwindling lot of nodes. Even if you use an online, more centralized bitcoin wallet, you must be one with the bitcoin system. You cannot, say remove your bitcoin record from the system.

Bitcoin is always out there, protecting you, making certain that you can, at some future date, come back, log on and spend your bitcoins. You know, the ones and zeros everyone has on their respective ledgers. Well, maybe not everyone, but certainly a lot of giant Chinese Mining firms.

Commie Coin?

Bitcoin then is a community coin. A communal coin. Do you see where I’m going? No you don’t, because just as there has never been a purely communist country, there has never been a purely decentralized bitcoin.

The center of control still remains with the developers, at least in the sense that they can change the code. They can, at any time, reprogram bitcoin or Monero. Especially, Monero. And you have zero input -- except for the fact that you can vote with “your feet.” You can walk away and refuse to use a particular cryptocurrency, for example.

Go ahead, be proud. Don’t vote. Make that statement.

If you want to label bitcoin right-wing or leftist, you’d probably need to err to the left, however. Leftist regimes utilize concentrated power structures. The governing, even in socialist countries, is often concentrated in some fashion, into a few hands or just one Great Father.

Bitcoin has a few core developers, but don’t worry, you are free to mine away and use the system with little cost to you. So bitcoin is left of middle.

The threat that developers of any particular cryptocurrency will act in a way that destroys their own source of wealth, seems alien to many. Why would they do that? What outside force or internal bit of wrangling could devalue a cryptocurrency.

Where's my Cash?

Unfortunately, like bank failures, cryptocurrencies also go belly up or break up. Witness Ripple Labs and Stellar. Jeb McCaleb once worked for Ripple, but left to form Stellar. Witness the Ethereum DAO incident. A well known vulnerability issue that tarnished the crypto-fuel forevermore, if I channel Edgar Allan Poe.

Spin the Bitcoin

Then there is the justice angle to consider. If a bank goes out of business in the United States for example, depositors can file for a return of their funds. They can even charge bankers with fraud in certain circumstances. In short, if there is a culprit, he/she can often be located.

In the world of cryptocurrency how does one go about retrieving lost funds? If bitcoin is like cash -- a one way transaction -- the receiver of the funds can abscond with said funds with near impunity. There are complicated work-arounds, third party guarantors, but even these do not solve the problems if the third parties in question do not find in your favor.

If the core developers of bitcoin (or any cryptocurrency) act in bad faith and live outside the jurisdiction of interest, is it a crime? By what right can one nation call bitcoin money and another, property? Then presume to justify persecution of bad actors, when their country has no opinion on the matter and no extradition treaties with the persecuting nations?

We can rebuild it

These problems of volatility can be overcome, however, if the underlying code of cryptocurrencies can be stabilized. If any cryptocurrency can maintain a modicum of trust, enable the users to eject bad actors who fund terrorism, for example, but at the same time keep our transactions private, then we might be on a better road.

But it might need to be a road made of metal. Gold perhaps.

We must change how we view cryptocurrencies. We must not allow ourselves to be blinded by the profits generated by the balloon of cryptocurrencies expanding and contracting, like living organisms. We must look deeper, into the bowels of this thing, before it releases them.

Oh Crap

The efforts being made by banks and governments to utilize blockchain technologies should serve as a warning to us. Already, these systems are awash in mountains of electronically recorded and ever duplicating monetary fiat units. Units that serve only to further devalue the currency in circulation. Now they will undoubtedly inject another layer of cryptocurrency monetary units while quietly absorbing the old money and at that point they could have near carnal knowledge of all of your transactions.

A Brave New World for sure.

Golden Crypto!

Cryptocurrency, if it can be securely structured in such a way as to be acceptable by the consumer at large, where it is always and immediately exchangeable for a specific amount of gold, even if only from a few large vendors, provided that gold is the legal tender of the region, then I think it would actually be unstoppable as a functional monetary unit. Like a gold reserve note. At the same time and this is unfortunate for the speculators, they would need to switch to gold speculation -- which is not as profitable -- and the fiat cryptocurrencies would burst like so many rotten and bloated crypto-corpses.

But it’s just my opinion. Many of us have them and the other thing too.

© 2017 Jack Shorebird

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    • jgshorebird profile imageAUTHOR

      Jack Shorebird 

      20 months ago from Southeastern U.S.

      Thanks Larry. I don't even presume to understand the nitty-gritty, but I think I get the big picture -- in my own way.

    • Larry Rankin profile image

      Larry Rankin 

      20 months ago from Oklahoma

      This stuff is hard for me to comprehend sometimes, but I always find your analysis interesting.

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