The Bitcoin Scam Explained

To understand the scan nature of all crypto-currency scams – not just Bitcoin , all of them – you have to differentiate between the technology and the subject: the “thing” being handled.

The technology is great! It is called “block-chain”. It is 3-dimensional:

–> it takes data and raises it to a higher level with encryption.

–> it widens the data at hand through distribution to many sources.

–> The data is deepened by keeping a time history of all transaction back to the beginning.

The technology has vast potential. (That is undisiputable – when hackers rip off millions in crypto-currencies, they have done it by hacking the exchange themselves, not the block-chain.) The application to real estate ownership eases the disputes of conflicting claims & eases sales transactions. Applied to car ownership, it does the same. Now lets look at these “things”.

Lets say your house is worth 300K ($, €, whatever…) and your government body that manages ownership of houses decides to keep its records in block-chain technology, it is still worth only 300K. There is nothing that changes its intrinsic value. If your car is worth 20K and the Department of Motor Vehicles implements block-chain to keep its records, your car is still worth only 20K. Your car is not automatically an object of speculation and the “blue book” that quotes average prices will still say “20K”. Now let’s look at money units as the “thing” being tracked.

When you invest 1 unit (1USD, 1EUR, whatever) it really is worth only 1 unit. Until, that is, it is accepted by people as an object of speculation and speculators put money units into or take out of a specific implementation of crypto-currency (c-c) based on perceived value of the units in that implementation. There are now dozens of Bitcoin-wanna-bes. Why? What makes them different from Bitcoin? Maybe they offer more convenient exchanges; geared toward the local currency, have better support by stores & shops…..but all have speculation in common – basically bastardizing the original idea of Bitcoin: convenient, electronic, anonymous payment.

A new crypo-currency does nothing but put a lot of real money in the pockets of sometimes very questionable operators. But that is to be expected when you have an opportunity for easy money. The one money unit that was put into a c-c is absorbed. But the perceived “value”, the price being discussed is now relevant to a unit of c-c. When one takes money out, each individual unit of real money is the same as before (1USD,1EUR…), but whether you take more or less of these real units out than was put in has only to do with a perception of a c-c unit value. The c-c unit now is a pure speculative object based on emotion and -at best- an estimate of how many real money units are floating around.

The wonderful idea of convenient, electronic, anonymous payment has been subverted by greedy finance people to an object of speculation. Should the prices of c-c’s become too volatile, their usefulness as payment method will disappear also. The implementation of a dynamic technology to the xfer of payments has simply been monetized by a certain class of finance types. Most of society would look down on someone who sent their sister out to work the streets! These finance types would simply say “One was optimally monetizing their familial relationships.”

One thought on “The Bitcoin Scam Explained”

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