Wondering about Bitcoin, what it is? Is Bitcoin a better currency – than the US dollar? The answer in short is, Bitcoin is not a currency at all; rather, it is a get-rich-quick scheme whose value is based on speculation and market trending.
Forbes: Bitcoin is an Asset, Not a Currency.
from Forbes: “Bitcoin advocates like to claim it is on its way to becoming a widely accepted currency that ordinary people can use for daily transactions.” “usually the asset being valued also has an actual underlying use: you can invest in gold or use it to make jewelry or electronic components. Bitcoins have no uses other than allowing people to hide wealth, conceal (often illegal) transactions, and make and lose money by trading them.”
Here is the question. What is the underlying asset-value of a Bitcoin? Gold, commodities, even an I.O.U. from some major Federally Insured Bank or a BIG Corporation? In trite – NO!! The underlying value of a Bitcoin is more like the value of a place in the makeup of a multi-level pyramid scheme where the product (value) you are selling and the product you own in a Bitcoin – is the right to sell the “right to sell”. You are selling this right to others who want to sell your “right to sell” too – and on and on and on.
In fact, new Bitcoins are created and dispersed as a winners reward, without any other underlying value. They are given a few new cyber-coins at a time, to tech companies with intense computing power, who solve complex mathematical puzzles! HA!!
You know, pyramid schemes like described are illegal in the United States!
So why do people want to buy Bitcoin? Well simple, to sell Bitcoin! There are some other reasons:
- to make a profit on the speculation (buy low – sell high) on special Bitcoin exchanges
- to mask illegal transactions for illegal activities like drugs, porn, weapons, tax-evasion
- to short circuit having massive or illegal transfers be seen by any central bank
People compete to “mine” bitcoins using computers to solve complex math puzzles. This is how bitcoins are created. “Currently, a winner is rewarded with 12.5 bitcoins roughly every 10 minutes”
CNN Money further framed this crypto-asset as “Bitcoin is a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto. Transactions are made with no middle men – meaning, no banks!”
No one knows the future of Bitcoin and whether big central banks will be authorized to begin regulation of Bitcoin but for now, if someone in is willing to pay the asking price then the Bitcoin seller wins and dupes someone else into cyber-buying their cyber-coin for real assets back to the seller.
As long as the price keeps going up then sellers win buyers risk and repeat. However, if prices begin to go down and if sellers watch Bitcoin prices plummet; then what?
If they then try and turn in their digital Bitcoin wallets to the Bitcoin entity (and who, where, what are he, she, or they), then what? The answer is not gold, no silver, or platinum, not even any US dollars, Rrather, it will be a digital website sign that says OUT OF BUSINESS and why? Because the Bitcoin intrinsic value is – you will get 1/10th of 1/100th of nothing but smoke in a mirror! There is no underlying value to a Bitcoin, other than the right to sell the right to sell it! That is the only charm of a true pyramid scheme … and of Bitcoin, it’s a bite.
