Real wealth is houses, land, cars, food, services, etc. Wealth gets created and destroyed, sometimes both in quick succession, as when a cook prepares a meal that gets eaten right away.
Bitcoin does not create any wealth. Its contribution to productivity, by (allegedly) being a more efficient payment instrument is tiny. In fact, the contribution of bitcoin to world's production of wealth, so far, has been humongously negative: 100 times (at least) more wealth has been destroyed by the bitcoin network than has been created thanks to it.
It is not because of that tiny positive contribution that large early adopters have become wealthier, either on paper (if they are still holding) or in reality (if they cashed out). Bitcoin's effect has been mainly to move property from some people to other people, mostly independently of their actual contribution to society. The gains from the early adopters, in particular, came from the (substantially bigger) losses of those who have bough coins and are still holding them. If bitcoin's price ever reached a million, as the holders dream, then trlliions of wealth would be transferred -- little by little, imperceptibly -- from those who buy bitcoins to those early adopters who hold most of the coins. If a country like Greece adopted bitcoin, that wealth would be taken from its citizens.
That is the same trick that governments and banks use when they create more money, indeed. But when the government does it, it is just another kind of tax: the government is supposed to use the wealth that it buys with that new money for the benefit of its citizens. When banks do it, of course, there is no such return: there is net and permanent transfer of wealth from the general people to bank owners.
And that is the case too when private entities create new money, whether it is gift certificates or Linden Dollars -- or cryptocurrencies. *That* is why cryptocurrencies are a scam, even if they were to succeed.
Lets see how this translates 2,600 years ago...
Real wealth is houses, land, cars, food, services, etc. Wealth gets created and destroyed, sometimes both in quick succession, as when a cook prepares a meal that gets eaten right away.
Gold does not create any wealth. Its contribution to productivity, by (allegedly) being a more efficient payment instrument is tiny. In fact, the contribution of gold to world's production of wealth, so far, has been humongously negative: 100 times (at least) more wealth has been destroyed by the gold system than has been created thanks to it.
It is not because of that tiny positive contribution that large early adopters have become wealthier, either on paper (if they are still holding) or in reality (if they cashed out). Gold's effect has been mainly to move property from some people to other people, mostly independently of their actual contribution to society. The gains from the early adopters, in particular, came from the (substantially bigger) losses of those who have bough coins and are still holding them. If the gold price ever reached a million, as the holders dream, then trlliions of wealth would be transferred -- little by little, imperceptibly -- from those who buy gold to those early adopters who hold most of the coins. If a country like Greece adopted gold, that wealth would be taken from its citizens.
That is the same trick that governments and banks use when they create more money, indeed. But when the government does it, it is just another kind of tax: the government is supposed to use the wealth that it buys with that new money for the benefit of its citizens. When banks do it, of course, there is no such return: there is net and permanent transfer of wealth from the general people to bank owners.
And that is the case too when private entities create new money, whether it is gift certificates or Linden Dollars -- or scarce metals. *That* is why scarce metals are a scam, even if they were to succeed.
Yeah, makes perfect sense.
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