Is Cryptocurrency More Than Just "Fake Internet Points"?
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Cryptocurrency, may just seem like the latest fad for throwing your money away. It is, at least, what one man would classify as (fake internet points). And to a degree, he’s right, isn’t he? Think about it. The internet age is a millennial specialty for our throw-away culture — like swiping right and most of the rules of grammar.
Proponents of cryptocurrency, sometimes called digital currency, like it for its more democratic ends based on the very fact that the currency belongs to no one entity. It’s decentralized from a banking system which means it remains in the public commons and is, in essence, unbound by traditional rules of economics.
That doesn’t mean that cryptocurrencies are without their struggle. Far from it. With volatile market fluctuations, cyber crime and hacking, cryptocurrencies have more than traditionally government-backed currency and regulations to contend with. They and consumers are navigating unforeseen obstacles everyday to see if they will become a major player in the future of finance or if they will become just another footnote in internet history alongside grumpy cat memes, duck lip selfies, Charlie Sheen and the mannequin challenge (shudder).
Despite the uphill battle, even the hardest of the hardcore crypto-haters out there will admit that in the face of major obstacles like record-breaking price-drops in value over the month of January 2018, cryptocurrencies like Bitcoin are unlikely to disappear altogether. Like it or not, we are tech-bound for the duration of our stay on Earth. Cryptocurrency is ipso facto, here to stay.
"Again... Fake internet points... For real money."
So, if you’re anything like me, you probably have one gnawing question:
(audio - what the fuck are we talking about?)
Yes. What is cryptocurrency?
Yeah, I’m going to need some help with this one. (I’m Ethan Braine with Majority Villain)
The drop in Bitcoin is actually $7915.01, as of the recording of this message, though days ago it was nearly $6000. The volatility is violent.
While many cryptocurrencies like Bitcoin allow access to a public ledger, the trails for these funds can be astoundingly complicated and drowned out in the process. Hackers may have numerous “wallets” where questionable transactions are mixed in with clean funds and then sold off at a later date when the money in question is digitally mixed enough through a process called “tumbling”. Think of it as the money laundering of the future!!!
There are plenty of reasons cryptocurrency is a good idea. The elimination of a central government - means no government or company can control the currency or directly manipulate interest rates. There are also no limits on how much money can be transferred so banks are a non-factor, and the fees are almost non-existent. Best yet, they can be used anywhere! So a Bitcoin in Bulgaria is a Bitcoin in Burkina Faso, and a Bitcoin in Belarus is a Bitcoin in Boston and a Bitcoin in Bolivia is a Bitcoin in Bangladesh and a Bitcoin in Bermuda is a Bitcoin in…
The Dark Web makes all kinds of things possible. It’s dark, because it is all the seediest activities humans aren’t typically willing to do in overwhelmingly public, well-lit areas. The following is a re-enactment of one type of seedy dark-web behavior. Listeners be warned as this audio clip contains adult content taken from a real-life dark web incident.
Man 1: Why hello there sir. How do you do?
Man 2: I do. And you?
Man 1: I do too. Thank you. Now, tell me my good man. Where might I purchase some drugs?
Man 2: Why why, my good man. I would be happy to accommodate your drug request by providing said drugs to you, hereby to be referred to simply as “drugs”.
Man 1: Bully! Naturally it would be poor form to simply hand you paper currency, hereby to be referred to as “cash money” for said “drugs”.
Man 2: Understandably so. Let us then conduct our cash money for drugs transaction via a cryptocurrency delivery to one web address, to then be split and muddled into multiple addresses, thereby disguising the cash money and drugs in question.
Man 1: Bully! In that case I will also acquire one unit of sex for more cash money.
Man 2: Bully! Consider the sexy sex for cash money delivered.
…And that’s how it happens. Just. Like. That.
The pain is real. The Mt. Gox hack resulted in the absolute ruin of some investor’s. Real people, real consequences.
From a reddit post in 2014, following the Mt. Gox bankruptcy:
— I ran into the withdrawal issue back in Dec and opened a support ticket in which I got the run around until they finally officially announced what the problem was. My stomach has been in knots all week :-(
— (originally I tried to withdraw $30,000.00, but Mt. Gox cancelled my withdraw and asked me to change to GBP. Funds never arrived. Mt.Gox admits in the e-mail funds are mine.)
— I have about 90 BTC in my Mt. Gox account, which I would very much like to receive back at some point. It's only just sinking in that it might all be gone.. I can't believe I waited so long before getting it out somewhere safe, but.. here we are.
— I have about 650 BTC in Gox. I haven't slept in days and haven't been able to tell my wife how much I've lost. I was an early adopter, just mining in my basement, and I can't imagine all of my time and work vanishing like this. Please contact me with what I need to do.
Think this all sounds crazy? Don’t. We do it everyday. Try eating a handful of dollar bills and tell me how full you feel, but that may sound stupid because that money is government-backed. However, there is one other type of financial speculation much more similar called a “future”. A future is a financial arrangement in which the thing being traded back and forth is not intrinsically for the item in question, but rather for the value that item has on the market at any given time. In other words, the Wall Street speculator that purchases 1000 future shares of cattle livestock doesn’t actually want 1000 shares of cattle livestock to show up to his office. That idea is so silly, we wouldn’t even know where to begin. But that doesn’t mean those future shares of that very livestock won’t change hands multiple times in one day as men in black suits with black ties yell back and forth on the trading floor to move those future shares. Imagine what the average rancher thinks of all this!
Bitcoin and other cryptocurrencies aren’t all that different. The value isn’t the weight of the bitcoin sitting in your hand. It’s about the value of these “fake internet points” the market places on it. This isn’t just an internet-age phenomenon either. 17th century Dutch saw entire fortunes won and lost on the exchange of exotic tulips. Yes, those tulips. As 1630s trades for tulips ramped up in the Netherlands, a 1000% market-value increase for one type of bulb in the span of a single month was not unheard of. A link to an article comparing the Dutch tulip craze and cryptocurrency on Focus Economics is located in the show notes.
You’ve been listening to the Majority Villain podcast. I’m your host, Gregory Haddock. A very special thanks today to the Villain’s newest, correspondent, Ethan Braine, who helped write much of today’s show. To redeem your villain points for this episode be sure to visit the website at majorityvillain.com and on Facebook and Twitter @majorityvillain. In signing out I would like to ask one very particular favor: please click on the iTunes link in the show notes and leave a review for Majority Villain. A five star review is single-handedly the most helpful action you can take to support the work we are doing. Thank you in advance for taking action.
In the meantime… Status quos are for suckers.
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Show image via Flickr by BTC Keychain. Additional photos by Sean MacEntee, Iman Mosaad and Goodegg0843.