Extraordinary Popular Delusions And The Madness of Crowds
The comments below are an edited and abridged synopsis of an article by Hugo Salinas Price
Technically, Bitcoin and other cryptocurrencies are a marvel of technology. But as far as humanity is concerned, they are nothing more than a delusion accepted by the madness of crowds.
Bitcoin et al have granted a monetary value to the possession of electronic digits, because that possession protects the owner of a Bitcoin, or of a tiny part of one Bitcoin, from theft.
So a Bitcoin worth, say, $50,000 is yours, only yours and cannot be stolen from you. And your Bitcoin may be worth even more in the future. What’s to object to about that?
The big question, which is never mentioned, is “What is the worth of what the Bitcoin is worth?”
Say Bitcoin is quoted at US$50,000. Salinas Price says: “Define a US dollar, or any other currency in the world today.”
The correct reply would be: “A US dollar is an electronic digit, created in the US, by an institution called the Federal Reserve.”
All other currencies are created in the same way. All money in the world today is nothing more than electronic digits.
Salinas Price can’t bring himself to value an electronic digit whose value does not relate to something tangible at all. Nor does the fact that millions of others do value an electronic digit and are willing to part with dollars (electronic digits) to ‘own’ such an impertinence as a digital bitcoin.
And what happens to the thousands of dollars that a Bitcoin is supposed to be worth on the day that the Fed goes belly up and ceases to exist? And further, when the dollar collapses (it will), all other currencies in the world denominated in Bitcoin will be worth exactly nothing, as the dollar is the currency that underpins all other currencies, with the exception perhaps of the ruble and the yuan.
Someday, a book will be published, entitled “The Greatest Popular Delusion and the Madness of Crowds Who Believed in The Bitcoin Myth.”