Bitcoin value waiting to be found
25 December, 2017
Bitcoin is value. What can you do with that? This much is the fact, at least at the moment (December 21, 2017). Who knows what tomorrow will bring?
Many dismiss it as a tech-geek fad, still others as a money-boy-ploy. There are some who say it’s the new gold, and others who reckon it just as any other payment mechanism. I submit that it is all these things and more – that it’s a worldwide social phenomenon which has the intended puropse of upending the dollar.
Bitcoin, and anything like it, is called ‘cryptocurrency’. That itself is a newly coined (ha ha) term, defined as meaning that it’s computer programmed to be an unbreakable secret code, and it’s posted (written down, in ‘accountingese’) on an electronic spreadsheet which is shared across all of the millions of computers (and handheld devices) which are logged into the blockchain. This, in itself, is a technological wonder, and financial institutions around the world have worked on adopting the blockchain for some purposes, and we’ll touch on that subject subsequently.
Part of the explanation of the popularity of bitcoin may be down to a rejection of the government-issued currencies which currently dominate the economic landscape, and the finances of every person and company in the world. Just the bare fact that most dominant currencies are completely disconnected from any traditional measure or store of value – such as gold – makes them suspect of massive manipulation. That’s why they are termed ‘fiat currencies’ – their value is based on some action that some powerful person/body of people did (an action performed is ‘a fiat’ in Latin, and in the learned language of highly educated people), and that’s all there is, there ain’t no more! Are you going to stand up to the powerful people and tell them that their actions have no importance to you? NO? That’s what they wanted.
In a world where somebody (or some people) just stood up and declared that thus-and-such piece of paper has some value because we – behind closed doors – said it would have that value, what’s to prevent someone *else* from saying – “Rubbish that, my piece of paper has such-and-such value too, because these people agreed on it.” Well, folks, that’s pretty much precisely what we have with cryptocurrencies. In a world where the standard operating procedures of many of our major institutions are undergoing sea-change level shifts, it might come as little surprise that the notions of monetary value and dominant currency are among the changes.
The powers that be have risen to the challenge, by moving forcefully to co-opt the Bitcoin – specifically, but not only – with the wrapper of ‘legitimacy’ that comes with trading it on the Chicago Mercantile Exchange. This has proven to be akin to wrapping an anchor around Bitcoin’s neck and casting it overboard: the value of Bitcoin sharply decreased rather quickly, throwing a damp squib on the speculative frenzy which had supported the original cryptocurrency.
The very notion that Bitcoin is important enough to be treated as a threat to the standing world order (in capitals, maybe?) could be seen to validate the notion that it, or at least its idea, has value. Granted, there are moves already afoot to dislodge the U.S. Dollar from its primacy as the world’s controlling currency, and those moves are substantial in nature, linked to real value, and carried out by some of the larger economies of the world. In the zero-sum ideological world of the ptb, there cannot be any sharing. They might be seen to have launched a defense against what they could, leaving the rest for another day.
The technology of the cryptocurrency blockchain may be its lasting legacy, as separate and distinct from the value store as it might be. Though the initial purpose of this record-keeping method was to democratize the information storage, there might yet be ways to lock the data in, and the public out, just like in ‘the old days’. It appears that blockchain is being experimented with for a number of uses, ranging from financial record keeping to self-piloted automobiles. Nothing about these extensions is sure, nor clear, but there’s talk, and that in itself is indicative of attention to the infrastructure which surmounts the original object.
As far as being a fad, that may prove to be, or have been, the case. However, even though something (at first) enjoys a huge initial wave of hither-to-unknown popularity, that demonstrably does NOT mean that it will only be popular for that initial time. Examples are tulips, the Beatles, the ideas of freedom of thought and speech, coffee, chocolate, Marxism, the use of silk, the idea that the Earth is round, and others. Yeah, Tulipmania is the poster-child of bubbles, but tulip sales are still huge in the world. Coffee was a new fad in the 1400s, reaching London in the early 1600s, at the same time as it was spreading across Europe. Today, coffee is the most valuable commodity in the world, only excepting the value of petroleum. So, will Bitcoin follow tulips and coffee into common ‘currency’, as it were? The only thing that’s clear is that we are at an interesting juncture of technology, commerce, politics and economics.
©2017 All rights reserved. David C.P. Leland