Friday, July 21, 2017

The Cryptocurrency Rabbithole

Cryptocurrency Moth

Firstly, I am a political scientist, and historian, with very little knowledge of tech matters, and even less faith in this medium, in general. So, if something I say here is infuriating to you, or if anybody actually reads this, and it reveals a systemic ignorance of all things digital, forgive me...assuming anyone actually reads this.

And when the Emperor threw off his robes, the new clothes were not there, the old clothes were not there, in fact, he was absolutely naked! -from The Emperor's New Clothes

When BitCoin was created, it was the first time in history that an intellectual presumption was given a value, based on the designer's declaration, alone, which could then be traded for goods and services within the virtual marketplace. What made this unique as a currency is that it is a quantum leap into the reimagining of our most consistent and human practices revolving around representative currencies, and usages of them. 

We know that, for instance, the dollar bill is worth trading for a can of soda and some change. But that is the latest stop on the dollar's journey. It first represented one dollar's worth of gold, which Roosevelt changed to silver, and then one dollar's worth of silver, which Nixon then changed to represent, for the very first time in human endeavor, a conceptual value. On June 24, 1968, the US Silver Standard became no longer presentable on demand. On August 15, 1971, Nixon took the US off of redeemable currency, ending the Gold Standard, and the Silver Standard, for good. But, like FDR's moves, he thought it would be temporary. Nixon never knew that there would be no returning to the redeemable Gold Certificate. 

In the US dollar's case, it represents neither gold, nor silver: it represents international oil-market fluidity, as well as the military disasters, which the US, in essence, promises as consequences for interrupting that trade, or being Communist, or a terrorist, or so-inclined as to entertain these notions. 

Nowadays, the Communist part has sort of vanished, and there yet remain very serious doubts about the dollar, stemming from a varying chain of personalities, each of whom headed the US military as presidents, and each of whom have actually done harm to the US dollar. Yet it remains one of the stronger units of currency on earth.

So BitCoin is actually not the first currency which has no presentable upon demand measure of a valuable commodity, and the digitization of currency probably would never have been conceived had the dollar never been the first currency based upon its value as an intellectual presumption. 

When a cryptocurrency is exchanged, the process basically occurs within the closed-circuit network of the internet, and the nuts and bolts of how it operates basically solves the problem of interrupted transactions, fraudulent transactions, and the point in every transaction wherein the purchaser must exhibit belief in the seller, and vice-versa. Apparently, BitCoin, in particular, has done so with a high degree of success. It is a trusted form of aesthetic value and the very first created specifically for internet transactions. Electronic funds are similar, but they are based on the traditions of nation-state currency exchange...

What it is, in essence, is like a participation-based and static economy, meaning that there were only a finite amount of BitCoins created, 21 million dollars worth of it. When they eventually are all cashed for dollars, which Wall Street is raving about the sheer volume of possibilities on that end, then BitCoin will be no more....now that may happen today, tomorrow, or whenever. 

But the rise of other cryptocurrencies is mainly based upon this circumstance's inevitable arrival, and, appears as aesthetic as the concept driving cryptocurrencies, in general. 


Someday, the practices of usury, and the reality of accommodating a system which places conniving cowardice into the highest incomes, and views honesty is as a liability, will visit the participants as the illusion of power which they practice vanishes. Abstractions from reality can only avoid consequences for a short length of time. For instance, when one too many US military failures raises eyebrows, coupled with an international press corp advising other national leaders to investigate the US media's attempt at polishing these failures, then the US dollar's abstract value will be affected.

Like the dollar, though, speculation, and the absurdity of the tradition of the trade, and the presumptions that accompany it, also preserve it. Otherwise, for all intent and purposes, any currency based in gold, for example, will possess real value that the dollar doesn't have, and simply destroy the viability of what value a dollar has. 

Cryptocurrencies exploit the aspect of both abstract value, and by the engaging of trading in one, cryptocurrencies trigger a new, but tried and true participatory tradition which is quite esoteric, and definitely the basis of much debate, in terms of Wall Street exploitation. Cryptocurrencies may one day hold a place in futures commodities which, though unregulatable, acts in such a way as to arrive upon a new logic defining cooperative trade...but, I am not holding my breath.

Two scenarios often cited as the absolute only weaknesses appearing to possibly confront the paradigm, and to send cryptocurrencies out of the other end of the conflict as a defeated concept, are:
  1. There is a undetected security flaw and the value of the cryptocurrency fails, or
  2. BitCoin, for example, were to split into several other kinds of cryptocurrencies.
This is, of course, the tech-savvy crowd speaking. Greed will cause the second possibility to become the beginning of the end. What happens when banks or exchange services refuse to convert the bitcoin into hard cash? 

This is the type of paradigm-blinders mandatory to the participation of the cryptocurrency issue, in general. They are generally younger, they cannot remember the world where FDIC didn't yet exist, and, in 1929, when people went to get money from their accounts, there just wasn't any.

Another thing that puzzles me: how long before the recent theft of $37 million worth of Etherium cryptocurrency is attributed to BitCoin? BitCoin traded higher after the theft. Yet, in the real world, these clashes resolve themselves in world wars, and the wars between imagined turf versus imagined turf seems a bit Nintendo-ish, but undermining cryptocurrencies is simply a matter of creating a new one. In essence, there is no ability to counterfeit one that would be more lucrative by just making a new one. So, by stealing $37 million in Ether, the thieves reveal a little bit more about themselves in the effort this took. When they could've just made a new one more easily. This is one weakness unforeseen by the tech crowd. It would be perfectly naive, yet in standard issue for this crowd not only to not see this coming, but also, to attempt to get around the non-existence of value. Put Wall Street in it, and the most real money controls the cryptocurrency market, end-of-story. 

The concept would lose its viability, and be filed under, "now we know", reeling from thefts becoming the lethal corporate presences' injurious consequence, should they go from cryptocurrency to cryptocurrency buying all of them up...

The nation state at war with another nation state doesn't only fight for concepts, but for land, for dominion. When the currencies of the world become corporate, those absences will certainly sting, as the individuals of the world simply invent cryptocurrencies to buy what they need, which ultimately resolves itself in the conceptual flaws reducing its value to less than nothing. 

These are just a few reasons dismissing this concept, things that make me say, "no, uh uh..." besides the horrific things most often associated with the Dark Net, where cryptocurrencies feature almost exclusively.

2 comments:

  1. Yesyerday, August 2, 2017, Bitcoin split. Now, Etherium will presume the top dog status, but now you heard it straight from me who predicted this a coupla weeks ago: the cryptocurrenciy rabbit hole will evolve to be regulated by the same market forces that made the nation state currencies harder to come by. Plus, by regulate, I mean no more homespun cryptocurrencies will be tolerated without first agreeing to regulatory boards, etc.

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  2. Today, Sept 4, 2017: China bans new cryptocurrencies. I now believe that China may be respinsible for the Eterium theft. What specifically was banned was ICO, initial coin offerings. Meaning, the banks in China will not honor any new cryptocurrencies...thus,having a lot of one that cannot be replaced by a new cryptocurrency, would eventually make that stolen cryptocurrency, Etherium, extremely valuable.

    But, while Bitcoin and Etherium are down, Italy, for instance, should buy them all, rebuild the BTI, and the Lira, and tell EU whst the smallest violin in the world looks like.

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