Cryptocurrency as cuck finance, or, promises made by Pokemon
September 19, 2016 § 35 Comments
This blog is syndicated into a few feeds here and there, and I sometimes read and very occasionally comment on other blog posts in those feeds. Here is a recent discussion involving bitcoin and cryptocurrencies which some of my own readers may find of interest. This post started as a comment in that thread.
Cryptocurrency hopefuls fail to grasp the fundamental fact that (unlike stock, bonds, demand deposits, fiat dollars, and the like) bitcoin is not a security: ownership of a bitcoin does not entitle the owner to anything at all other than possession of the bitcoin itself.
The basic suggestion is that ‘currencies’ in general (understood ambiguously), and therefore bitcoins in particular, represent a promise. But this raises the question of who in particular has promised what in particular to whom. An abstract ‘promise’ from nobody in particular, to nobody in particular, backed by no specified property at all, is no promise at all. If nobody will buy your bitcoins you don’t have anyone to accuse of breaking their promise; and there is no pool of property which you can reference, claiming entitement to a share in virtue of this ‘promise’.
Cryptocurrencies are only ‘promises’ when every day is opposite day. Bitcoins are a commodity not a security. They are not promises made by anyone in particular: they are simply themselves, that is, they are cryptologically authenticated records of wasted computation.
One of the sociological oddities of cryptocurrencies is that software people really ought to grasp the difference between references to objects and objects in themselves. Somehow when it comes to financial securities the intellectual capacity to do basic dereferencing goes out the window. With this sort of confusion it is no wonder that the ‘smart’ locks on my car seem actually rather stupid.
The conflation of references to property with actual property often serves the interests (no pun intended) of usurers and other financial hucksters, so it is no surprise that this conflation is fostered by ‘the powers that be’. Cryptocurrencies propose to ‘fight the power’, if you will, by reinforcing these same basic errors. I think the kids these days refer to this as being ‘cucked’.
That other people may or may not willingly trade for something – beads of necklaces and the like – does not make that something a security (whatever vocabulary we want to use for editorial purposes: ‘pointer’, to you software nerds, and you know who you are). Willingness to trade at this particular moment is not the same thing as title/entitlement to property. That someone is willing – at the moment – to trade for insulin or tulip bulbs is not the same thing as (for example) a bond which entitles you to regular payments backed by a pool of property recorded on a balance sheet. The latter is a pledge of property made by the owners of that property; the former may as well be a pledge made by a Pokemon. It is as real as that cartoon character you see in your smartphone.
Cryptocurrency cucks aren’t alone of course. Most modern economic theorists (Keynesians, Austrians, MMT, etc) labor under the shadow of metaphysically anti-realist error. That is just modern life in between the event horizon and the singularity.